Finally, after about four decades, B.P. 68, the Corporation Code of the Philippines, has been replaced by Republic Act No. 11232, the Revised Corporation Code of the Philippines (RCCP).
One of the most notable innovations under the RCCP is the introduction of One Person Corporation (OPC).
What is a One Person Corporation?
A One Person Corporation is a corporation with a single stockholder, who can only be a natural person, trust or estate.
Who may be an incorporator of a One Person Corporation?
The following may be an incorporator of a One Person Corporation:
1. A natural person;
2. A trust; or
3. An estate
SEC Memorandum Circular NO. 7-2019 clarifies that the “trust” as used by the law does not refer to a trust entity, but the 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.
May a partnership, association or corporation incorporate a One Person Corporation?
No.
While partnerships, associations, and corporations are allowed under the RCCP to organize a corporation, these entities cannot form a One Person Corporation. It goes without saying that these entities may only organize an ordinary corporation.
May a foreign national be an incorporator of a One Person Corporation?
Yes.
Subject to the applicable capital requirement and constitutional and statutory restrictions on foreign participation in certain investment areas or activities, a foreign natural person may put up a One Person Corporation.
Is there a minimum capital requirement for a One Person Corporation?
No, there is none.
Unless required under a special law, the OPC is not required to have a minimum authorized capital stock and no portion of the authorized capital stock is required to be paid-up at the time of incorporation.
Are there entities which cannot be incorporated as a One Person Corporation?
Yes.
The following entities cannot be incorporated as One Person Corporation:
- Banks
- Non-bank financial institutions
- Quasi-banks
- Pre-need companies
- Trust companies
- Insurance companies
- Public and publicly-listed companies
- Non-chartered government- owned and -controlled corporations
There’s no need to mention that a non-stock corporation cannot be organized as a One Person Corporation.
Moreover, a natural person who is licensed to exercise a profession may not organize as a One Person Corporation for the purpose of exercising such profession except as otherwise provided under special laws.
Does a One Person Corporation have a Board of Directors?
No.
Considering that a director is required to be a stockholder of the corporation and a One Person Corporation has a lone stockholder, the OPC does not have a Board of Directors. The law, instead, provides that the single stockholder shall be the sole director of the OPC.
Is the OPC required to have a set of corporate officers?
Yes.
The law provides that the single stockholder shall be the President of the OPC.
In addition, the OPC is required to appoint a treasurer, a corporate secretary, and other officers as it may deem necessary, within fifteen (15) days from the issuance of its certificate of incorporation.
In other words, the OPC is required to have the following officers:
- President;
- Treaurer; and
- Secretary
As to other officers, their appointment is left to the discretion of the OPC.
May the single stockholder also assume the position of the treasurer?
Yes.
The single stockholder may appoint himself as the treasurer of the OPC. In such a case, he is required to post a surety bond to the Commission. The amount of the bond is computed based on the authorized capital stock of the OPC.
Moreover, the stockholder/treasurer must make a written undertaking to faithfully administer the One Person Corporation’s funds to be received as treasurer, and to disburse and invest the same according to the articles of incorporation as approved by the Commission.
The bond shall be renewed every two (2) years or as often as may be required. It is a continuing requirement so long as the single stockholder remains as the Treasurer of the OPC.
The bond is subject to cancellation upon proof of appointment of another person as the Treasurer and filing of amended form for appointment of officers.
May the single treasurer be the secretary also of the OPC?
No.
The law expressly prohibits the self-appointment of the single stockholder as the corporate secretary.
To be continued…
