FAQ – Part 3
How long is the corporate term of a One Person Corporation?
The term of existence of a One Person Corporation depends on whether its single stockholder/incorporator is a natural person, a trust, or an estate.
Where the incorporator is a natural person, the term of existence of the OPC by default is perpetual.
Where the incorporator is a trust or an estate, the term of existence is coterminous with the existence of the trust or the estate.
The OPC under the name of the 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 the Trustee may be dissolved upon proof of termination of the trust.
What makes an OPC identifiable and distinguishable from an ordinary corporation?
The OPC is made identifiable and distinguishable from an ordinary corporation by the suffix “OPC” which is required to be indicated either below or at the end of its corporate name.
Is t he OPC required to file its Articles of Incorporation?
Like an ordinary corporation, a One Person Corporation is also required to file with the Securities and Exchange Commission (SEC) its Articles of Incorporation.
What are the matters required to be stated in the Articles of Incorporation of the OPC?
The Articles of Incorporation of the OPC must state, among others, the following details:
- The primary purpose of the OPC;
- Its principal office address;
- Its term of existence
- The name and details of the single stockholder;
- The nominee and the alternate nominee; and
- The authorized, subscribed and paid-up capital.
Is the OPC required to file its by-laws?
Considering that there is only one stockholder who is also the sole director, a set of corporate by-laws does not serve any purpose.
Considering that meetings cannot be conducted by the single stockholder who is also the sole director, how are corporate matters acted upon?
When action is needed on any matter, it shall be sufficient to prepare a written resolution, signed and dated by the single stockholder, and recorded in the minutes book of the One Person Corporation. The date of recording in the minutes book shall be deemed to be the date of the meeting for all purposes under this Code.
What is the Minutes Book?
The minutes book is a corporate book which is required to be maintained by a One Person Corporation. It shall contain all actions, decisions, and resolutions taken by the One Person Corporation.
Does the OPC have a juridical personality distinct and separate from that of the single stockholder?
The OPC, like an ordinary corporation, is a juridical entity with personality separate and distinct from that of the single stockholder.
Does the single stockholder enjoy the limited liability enjoyed by a stockholder in an ordinary corporation?
Yes, subject to certain conditions.
While the law treats the OPC as a separate juridical entity, in order for the single stockholder to successfully claim limited liability, the single stockholder is charged with the burden of showing the following:
- The corporation was adequately financed;
- The property of the One Person Corporation is independent of the stockholder’s personal property; and
- There is no ground to apply the doctrine of piercing the corporate veil.
In case the the stockholder fails to discharge the aforementioned burden, the single stockholder shall be jointly and severally liable for the debts and other liabilities of the One Person Corporation.