By James A. Loyola
The Securities and Exchange Commission (SEC) is asking for comments from stakeholders regarding its draft guidelines for organizing a one-person corporation (OPC).
The SEC has just released the draft Guidelines on the Establishment of a One-Person Corporation (OPC) and Guidelines on the Conversion of an Ordinary Stock Corporations into a One-Person Corporation (OPC).
The concept of a corporation with a single stockholder was introduced by Republic Act No. 11232, otherwise known as the Revised Corporation Code of the Philippines, which took effect on February 23.
Section 10 of the Revised Corporation Code paves the way for the creation of an OPC by removing the minimum number of incorporators that may organize a corporation. It further defined an OPC in Chapter III.
“The provision for a one-person corporation should encourage the formation of more businesses in the country by making it easier for entrepreneurs to start a limited liability company,” SEC Chairperson Emilio B. Aquino said.
He added that, “this is especially beneficial in an economy where micro, small and medium enterprises comprise more than 99 percent of business establishments and generate around 63 percent of jobs.”
The draft guidelines on the establishment of an OPC reiterates that only a natural person of legal age, a trust or an estate may form an OPC.
The “trust” does not refer to a trust entity but a subject being managed by a trustee. If the single stockholder is a trustee, administrator, executor, guardian, conservator, custodian or other person exercising fiduciary duties, proof of authority to act on behalf of the trust or estate must be submitted at the time of incorporation.
The draft guidelines also notes that non-bank financial institutions may not incorporate as OPC aside from banks, quasi-banks, preneed, trust and insurance companies, public and publicly listed companies, and non-chartered government-owned and/or -controlled corporations.
Meanwhile, a foreign natural person may put up an OPC, subject to the applicable constitutional and statutory restrictions on foreign participation in certain investment areas or activities.
To incorporate, an OPC only needs to submit its Articles of Incorporation setting forth its primary purpose; principal office address; term of existence; names and details of the single stockholder; the nominee and alternate nominee; and the authorized, subscribed and paid-up capital, among others.
Under the draft guidelines, only a domestic stock corporation may be converted into an OPC and the single stockholder may only apply for conversion after acquiring all outstanding capital stock of the corporation.