1) What “incorporation” means in Philippine practice

In the Philippines, a corporation is a juridical person created by operation of law upon registration with the Securities and Exchange Commission (SEC). Once registered, it generally has a legal personality separate from its shareholders, the ability to own property, enter contracts, sue and be sued, and continue despite changes in ownership—subject to compliance with the Revised Corporation Code of the Philippines (RCC) and SEC rules.

Incorporation (SEC registration) is distinct from:

Business name registration (typically for sole proprietors),
Local permits and licenses (city/municipal business permit, barangay clearance, etc.),
Tax registration (BIR), and
Employer registrations (SSS, PhilHealth, Pag-IBIG).

This article focuses on SEC registration for Philippine corporations (and the SEC licensing framework for foreign corporations).

2) The governing law and why it matters

The primary statute is the Revised Corporation Code (RCC), which modernized incorporation rules, introduced the One Person Corporation (OPC), allowed perpetual corporate term by default, enabled remote meetings and electronic notices (subject to conditions), and reinforced compliance requirements.

The SEC implements the RCC through SEC Memorandum Circulars, forms, and procedural requirements. In practice, SEC requirements can be a mix of:

Documents mandated by the RCC (e.g., Articles of Incorporation, By-Laws),
Identity and eligibility proofs (e.g., IDs, affidavits), and
Policy-driven filings (e.g., beneficial ownership disclosures, depending on SEC issuances).

3) Choosing the right entity before SEC registration

A. Domestic corporation (incorporated in the Philippines)

Most Philippine companies that want limited liability and corporate structure incorporate as a stock corporation (with shareholders) or nonstock corporation (membership-based, typically for non-profit purposes).

Common domestic corporation types:

Stock corporation (for profit; ownership via shares)
Nonstock corporation (non-profit or purpose-driven; ownership via members)
One Person Corporation (OPC) (single stockholder; special rules)
Close corporation (limited number of shareholders; special restrictions—less common in modern practice)

B. Foreign corporation (incorporated abroad) doing business in the Philippines

A foreign corporation does not “incorporate” locally; instead, it typically registers for:

A License to Do Business (e.g., branch office), or
A SEC registration as a representative/liaison type arrangement where allowed.

Whether a foreign entity is “doing business” is a legal question with consequences—unlicensed doing business may prevent suing in Philippine courts and can trigger penalties.

4) Core legal concepts you must get right

A. Separate juridical personality and limited liability

Shareholders are generally liable only up to their investment, but liability can extend in exceptional cases (e.g., fraud, piercing the corporate veil, personal guarantees, specific statutory liabilities).

B. Capital structure and “subscribed” vs “paid”

For stock corporations:

Authorized capital stock (ACS): maximum shares the corporation can issue (if you state it).
Subscribed capital: shares committed by subscribers.
Paid-up capital: portion actually paid.

Under the RCC, many corporations can be formed without rigid paid-up minimums as a general rule, but sector regulators, special laws, bank requirements, and foreign ownership rules can effectively impose minimum capital, deposit proofs, or financial thresholds.

C. Perpetual term by default

Unless the Articles provide otherwise, the corporation has perpetual existence.

D. Corporate governance basics

You will need:

A Board of Directors (stock) or Board of Trustees (nonstock),
Required corporate officers (typically President, Treasurer, Corporate Secretary, and others as needed),
Meetings, minutes, and recurring SEC filings.

5) Key decisions and eligibility checks before you file

A. Corporate name rules (availability and compliance)

The SEC applies naming rules—names must be distinguishable, not misleading, and not infringe protected names/marks. Certain terms may be restricted or require prior clearance (e.g., “bank,” “insurance,” “foundation,” “cooperative,” regulated professions, or government-related terms).

Practical takeaway: do a name availability check and be ready with alternatives.

B. Purpose clause and regulated activities

Your primary and secondary purposes matter. If your business falls under a regulated sector (e.g., financing companies, lending, insurance, banks, pawnshops, schools, utilities, hospitals, securities-related activities), you may need endorsements from the relevant government agency before the SEC accepts registration or before you can operate.

C. Foreign ownership and nationality restrictions

Philippine law restricts foreign ownership in certain industries and imposes conditions in others. Even when 100% foreign-owned is permitted, there may be capital requirements and registration obligations under other agencies.

Before filing, confirm:

Whether your activity is partly/fully reserved for Filipinos,
Whether you must structure with Filipino ownership (and how much),
Whether you need special registrations (e.g., for export enterprises, incentives, etc.).

D. Number and qualifications of incorporators, directors/trustees, and officers

Regular stock corporation: typically requires multiple incorporators and a board.
OPC: single stockholder; no board in the conventional sense; special officer structure.
Directors/trustees must meet eligibility standards under the RCC and must not be disqualified.

E. Principal office address

You must declare a principal office in the Philippines. This is not just a mailing address; it anchors jurisdiction, notices, and many compliance obligations.

6) The “SEC registration set”: documents you typically need

The exact set varies by corporation type, but the backbone is consistent.

A. Articles of Incorporation (AOI)

The AOI is the corporation’s charter. It typically contains:

Corporate name
Specific purpose(s)
Principal office address
Corporate term (often “perpetual” by default)
Names, nationalities, and addresses of incorporators
Number of directors/trustees and their details
For stock corporations: capital structure (share classes, par value/no par, ACS if stated), subscribers, and subscription details
Other lawful provisions (e.g., restrictions on share transfers, arbitration clauses if desired and allowed, governance provisions)

Common pitfalls:

Purpose clause too broad or mismatched with licensing requirements
Incomplete capital details (share classes/par values inconsistent)
Wrong officer/director details or signatory capacity issues
Address mismatch with proof of occupancy/lease (if later required)

B. By-Laws

By-laws set internal rules: meetings, voting, quorum, officer duties, issuance/transfer of shares, committees, dispute procedures, etc.

Under modern practice, by-laws are often filed with the AOI (or within the period allowed by law/rules, depending on the type and SEC procedure). Best practice is to prepare them carefully at the start to avoid governance gaps.

C. Treasurer-related proof (for stock corporations)

Historically, SEC practice often required affidavits or declarations related to subscription and paid-up capital and custody of funds. Today, the SEC may still require treasurer undertakings/affidavits and, in some circumstances, proof of capital or bank certifications—especially for regulated industries or where other agencies require it.

D. Identification and signatory documents

Commonly required in some form:

Government-issued IDs of incorporators, directors/trustees, and officers
Tax identification details where applicable
Specimen signatures and consents/acceptances of appointment

E. Beneficial ownership and related disclosures

The SEC has pushed for transparency on beneficial ownership (the natural persons who ultimately own/control the entity). You should be prepared to disclose beneficial owners and update changes as required.

F. Special documents for nonstock corporations

In addition to the AOI and by-laws, nonstock entities may need:

List of members (initial membership structure)
More detailed purpose and non-profit distribution restrictions
Additional proofs for “foundation” or similar terms if used

G. OPC-specific requirements

For an OPC, the single stockholder typically acts as:

Sole director (conceptually, corporate powers reside in the single stockholder),
Often the President, but rules restrict who can be Corporate Secretary (commonly must be a resident and cannot always be the single stockholder depending on SEC rules/OPC structure), and
OPCs require a nominee and alternate nominee (to manage affairs upon the single stockholder’s death or incapacity, subject to legal conditions).

H. Foreign corporation licensing requirements (overview)

For a foreign corporation seeking a license to do business, SEC typically requires:

Authenticated/apostilled corporate documents from home jurisdiction (e.g., Articles/Charter, proof of existence/good standing)
Board resolution authorizing Philippine registration and appointing a resident agent
Proof of inward remittance/capital (depending on branch type and applicable rules)
Address and contact details in the Philippines
Undertaking to submit periodic reports and comply with Philippine law

7) The SEC registration process: practical flow

While SEC filing mechanics evolve (often via online portals and electronic submissions), the legal sequence is generally:

Name verification/reservation (if applicable)
Preparation of AOI and By-Laws (plus required affidavits/consents/disclosures)
Execution of documents (signatures, notarization/apostille where applicable)
Submission to SEC with payment of filing fees
SEC review (may issue comments/deficiencies)
Issuance of Certificate of Incorporation (or Certificate of Filing, depending on entity type)
Post-incorporation registrations and setup (not SEC-only, but essential)

Handling SEC comments/deficiencies

The SEC may require corrections such as:

Clarifying purposes,
Correcting capital structure entries,
Replacing disqualified names or restricted terms,
Submitting missing IDs, consents, or disclosures.

Plan for at least one revision cycle in your timeline.

8) Fees and taxes tied to SEC incorporation (high-level)

SEC charges filing fees that are often influenced by:

Declared capital (for stock corporations),
Type of corporation,
Legal research fee and other assessments.

Beyond the SEC, you should budget for:

Notarization/authentication,
Local permits,
BIR registration costs and invoicing compliance,
Professional fees (if any),
Bank account setup requirements.

9) Immediate post-incorporation essentials (still “SEC-relevant”)

Incorporation is the beginning. A corporation that fails ongoing compliance can be penalized, suspended, or even revoked.

A. Organizational meeting and internal setup

Typically done right after incorporation:

Adopt by-laws (if not yet adopted)
Elect directors/trustees (if not yet fixed) and appoint officers
Approve issuance of shares (stock corporations) and share certificates
Open corporate bank account
Adopt key policies (signatories, accounting year, principal contracts)

B. Corporate books and records

Maintain:

Minutes books (board and shareholders/members)
Stock and transfer book (for stock corporations)
Accounting records and audited financial statements where required
General information filings and disclosures as required by SEC

C. General Information Sheet (GIS)

Corporations are typically required to file a GIS periodically (commonly annually), reflecting:

Officers, directors/trustees
Shareholding or membership structure
Other reportable information required by SEC

Non-filing is a frequent cause of penalties.

D. Audited Financial Statements (AFS) and other SEC reportorial requirements

Many corporations must submit AFS annually, depending on size/type and SEC coverage rules. Deadlines, formats, and required attachments are strictly implemented.

10) Common “key requirements” explained in plain terms

A. Minimum number of people involved

Regular corporation: requires a board and multiple natural persons/juridical entities as incorporators (depending on SEC rules and structure).
OPC: one natural person, trust, or estate can incorporate (subject to legal limitations), but must still satisfy officer/nominee rules.

B. Resident and address requirements

Domestic corporation: principal office must be in the Philippines.
Foreign corporation: must appoint a resident agent and maintain a Philippine office/address for service of process.

C. Capital and banking realities

Even when the law does not impose a universal minimum paid-up capital, practical barriers include:

Bank KYC requirements,
Landlord/lessor requirements (lease deposits, registrations),
Industry regulation,
Foreign investment thresholds and documentary expectations.

D. Beneficial ownership transparency

Expect that the SEC may require identification of individuals who ultimately control or own the corporation, especially where layered ownership exists.

E. Use of nominees, dummies, and anti-circumvention risk

Using “nominee” shareholders to bypass foreign ownership limits can trigger civil, criminal, and regulatory consequences. Structure ownership honestly and document it properly.

11) Special situations that change the SEC requirements

A. Regulated industries

If the business involves finance, insurance, securities, lending, education, healthcare, utilities, and other regulated fields, expect:

Endorsements/clearances,
Higher capital requirements,
Fit-and-proper standards for directors/officers,
Additional SEC and non-SEC reporting.

B. Corporations with foreign equity

You may need to consider:

Special registration steps under foreign investment rules,
Proof of remittance,
Compliance with nationality caps and control tests,
Enhanced beneficial ownership scrutiny.

C. Nonstock entities, foundations, and NGOs

Nonstock corporations must align:

Purpose clauses,
Non-distribution constraints,
Member governance,
Specialized reporting if also registered with other agencies or receiving certain funds.

D. Corporate restructurings

If you are not starting from scratch (e.g., converting from partnership/sole proprietorship, merging entities, or spinning off assets), SEC filings shift from incorporation to:

Amendments to AOI,
Increase/decrease of capital,
Merger/consolidation approvals,
Dissolution and liquidation processes.

12) Typical errors that delay SEC approval

Name issues (confusingly similar, restricted words, misleading terms)
Purpose clause conflicts (regulated activity without endorsement; overly broad or inconsistent)
Capital structure inconsistencies (par value math errors; share class confusion)
Signatory defects (wrong signatories, missing attestations, improper notarization)
Address and identity mismatches (IDs not matching details in AOI/GIS)
Incomplete disclosures (beneficial ownership, officer acceptance, consents)
OPC mistakes (missing nominee/alternate nominee; improper officer assignment)

13) Compliance and enforcement: what happens if you ignore SEC obligations

The SEC can impose:

Monetary penalties for late/non-filing of reportorial requirements,
Suspension or revocation of certificate of incorporation in serious or prolonged noncompliance,
Disqualification of directors/officers in certain circumstances,
Referral for prosecution where fraud or serious violations are involved.

A corporation that is technically incorporated but chronically non-compliant can become commercially unusable (banks, investors, and counterparties often require up-to-date SEC filings).

14) Practical checklist (domestic stock corporation)

Pre-filing

Confirm business activity is not restricted/regulated (or get endorsements)
Confirm foreign ownership rules (if any foreign equity)
Choose corporate name alternatives
Decide capital structure (share classes, par value/no-par, subscriptions)
Confirm principal office address and documentation for occupancy/lease

Core SEC documents

Articles of Incorporation
By-Laws
Treasurer-related affidavits/undertakings (as required)
Director/officer consents and acceptance
IDs and required disclosures (including beneficial ownership, as applicable)

Post-approval

Organizational meeting; adopt by-laws; appoint officers; issue shares
Maintain corporate books
Prepare for GIS and AFS deadlines and formats

15) Practical checklist (OPC)

Corporate name and purpose
Articles tailored for OPC
Appoint a qualified Corporate Secretary (and other officers as required)
Designate nominee and alternate nominee
Prepare beneficial ownership disclosures and IDs
Set up books and reportorial calendar immediately after registration

16) Practical checklist (foreign corporation branch/license)

Authenticated/apostilled home-jurisdiction documents
Board resolution authorizing Philippine registration
Appoint resident agent
Provide Philippine address and contact details
Prepare capital remittance proofs if required by the chosen presence type
Establish compliance process for periodic SEC filings

17) A short caution on “templates” and why customization matters

Articles and by-laws are not mere forms; they shape:

Who can bind the corporation,
How disputes are handled,
How ownership transfers occur,
How investors assess governance,
Whether you can pivot into new activities without amendments.

Even small drafting errors can force amendments later (which cost time and fees), or create internal governance problems that surface when raising capital, opening bank accounts, or entering major contracts.

18) Disclaimer

This article is for general informational purposes and is not legal advice.