By: Patricia C. Tuason
One of the main highlights of the Revised Corporation Code (RCC) is the introduction of the One Person Corporation (OPC). The RCC now permits the forming of corporations with only one (1) stockholder instead of the required minimum of five (5) stockholders under the old Corporation Code. This new feature undoubtedly intends paves an easier path for entrepreneurs.
1. What is a One Person Corporation?
A One Person Corporation (OPC) is a corporation with a single stockholder. It shall indicate the letters “OPC” either below or at the end of its corporate name.
2. Who may form an OPC?
The following may form an OPC:
• Natural person; • Trust; or • Estate
3. Who may not incorporate as an OPC?
The following may not form an OPC:
• Banks and quasi-banks;
• Pre-need and insurance companies; • Trust, the subject being managed by a trustee; • Public and publicly-listed companies; • Non-chartered government-owned and -controlled corporations;
• Natural person licensed to exercise a profession for the purpose of exercising such profession, except as otherwise provided under special laws.
4. May a foreign natural person put up an OPC?
A foreign natural person may put up an OPC, subject to the applicable capital requirements and/or constitutional and statutory restrictions on foreign participation in certain investment areas or activities.
5. What is the required minimum authorized capital stock?
An OPC shall not be required to have a minimum authorized capital stock, except as otherwise provided by special law.
6. Is an OPC required to file its articles of incorporation? If yes, what are the contents?
An OPC shall file its articles of incorporation which shall contain substantially the following matters:
• Name of the OPC; • Primary and secondary purpose for which the OPC is being formed; • Principal office address; • Corporate term; • Name, nationality and residence address of the single incorporator/director/president; • Amount of its authorized capital stock, number of shares into which it is divided, the par value of each, names, nationalities, and residence address of the original subscriber, amount subscribed and paid by each on the subscription, and a statement that some or all of the shares are without par value, if applicable; • Such other matters consistent with law and which the incorporator may deem necessary and convenient • Arbitration agreement, if any; • If the single stockholder is a trust or an estate, the name, nationality, and residence of the trustee, administrator, executor, guardian, conservator, custodian, or other person exercising fiduciary duties together with the proof of such authority to act on behalf of the trust or estate; and • Name, nationality, residence of the nominee and alternate nominee, and the extent, coverage and limitation of the authority.
7. Is an OPC required to file its bylaws? If yes, what are the contents?
The OPC is not required to submit and file its corporate bylaws.
8. Who are the directors and officer(s) of an OPC?
The single stockholder shall be the Sole Director and President of the OPC.
Within fifteen (15) days from the issuance of its Certificate of Incorporation, the OPC shall appoint a Treasurer, Corporate Secretary, and other officers, and notify the SEC thereof within five (5) days from appointment, using the Appointment Form as may be prescribed by the SEC.
The single stockholder may not be appointed as the Corporate Secretary, but may be the self-appointed Treasurer.
9. What are the additional duties of the Treasurer?
The single stockholder who assumes the position of the Treasurer shall give a bond to the SEC in such a sum as shown in the table below, and shall undertake in writing to faithfully administer the OPC’s funds to be received as Treasurer, and to disburse and invest the same according to the articles of incorporation as approved by the SEC. The bond shall be subject to renewal every two (2) years or as may be required, upon review of the annual submission of the Audited Financial Statements/Financial Statements certified under oath by the OPC’s President and Treasurer.
Surety Bond Coverage
1.00 to 1,000,000.00
1,000,001.00 to 2,000,000.00
2,000,001.00 to 3,000,000.00
3,000,001.00 to 4,000,000.00
4,000,001.00 to 5,000,000.00
P5,000,001.00 and above = Amount of surety bond coverage shall be equal to the OPC’s ACS
10. What are the additional duties of the Corporate Secretary?
The Corporate Secretary shall:
• Maintain the minutes book and/or records of the OPC; • Notify the nominee or alternate nominee of the death or incapacity of the single stockholder, which notice shall be given no later than five (5) days from such occurrence; • Notify the SEC of the death of the single stockholder within five (5) days from such occurrence and stating in such notice the names, residence, addresses, and contact details of all known legal heirs; and • Call the nominee or alternate nominee and the known legal heirs to a meeting and advise the legal heirs with regard to, among others, the election of a new director, amendment of the articles of incorporation, and other ancillary and/or consequential matters.
11. What is the term of existence of an OPC?
The term of existence of the OPC shall be perpetual. However, in case of the trust or estate, its term of existence shall be co-terminous with the existence of the trust or estate.
The OPC under the name of an estate may be dissolved upon proof of Partition, such as Order of Partition issued by the Court in case of Judicial Settlement and Deed of Extrajudicial Settlement in case of summary settlement of the estate.
The OPC under the name of a Trustee may be dissolved upon proof of termination of the trust.
12. What is the effect of the death or permanent incapacity of the single stockholder to the OPC?
The designated nominee and alternate nominee in the articles of incorporation, whose written consent is attached to the application for incorporation, shall take the place of the single stockholder as director and shall manage the OPC’s affairs until the legal heirs of the single stockholder have been lawfully determined, and the heirs have designated one of them or have agreed that the estate shall be the single stockholder of the OPC.
13. What is the effect of the temporary incapacity of the single stockholder to the OPC?
When the incapacity of the single stockholder is temporary, the nominee shall sit as director and manage the affairs of the OPC until the stockholder, by self-determination, regains the capacity to assume such duties.
14. What are the reportorial requirements?
The OPC shall submit the following within such period as the SEC may prescribe:
• Annual financial statements audited by an independent certified public accountant: Provided, That if the total assets or total liabilities of the corporation are less than Six hundred thousand pesos (P600,000.00), the financial statements shall be certified under oath by the OPC’s Treasurer and President; • A report containing explanations or comments by the President on every qualification, reservation, or adverse remark or disclaimer made by the auditor in the latter’s report; • A disclosure of all self-dealings and related party transactions entered into between the OPC and the single stockholder; and • Other reports as the SEC may require.
15. Can the single stockholder be held jointly and severally liable for the debts and other liabilities of the OPC?
The single stockholder claiming limited liability has the burden of affirmatively showing that the corporation was adequately financed. Where the single stockholder cannot prove that the property of the OPC is independent of the stockholder’s personal property, the stockholder shall be jointly and severally liable for the debts and other liabilities of the OPC.
• Republic Act No. 11232, also known as the Revised Corporation Code • SEC Memorandum Circular No. 007 series of 2019, Guidelines on the Establishment of a One Person Corporation
Planning on setting up a One Person Corporation? Let us know if you have any questions or if we can be of any help.