The introduction of the One Person Corporation (OPC) under Republic Act No. 11232, otherwise known as the Revised Corporation Code of the Philippines (RCC), marked a significant shift in the Philippine business landscape. Historically, forming a corporation required at least five incorporators. The OPC removed this barrier, allowing individual entrepreneurs to enjoy the benefits of a corporate vehicle without the need for nominal shareholders.
1. Nature and Characteristics of an OPC
A One Person Corporation is a corporation with a single stockholder, who must be a natural person, trust, or an estate.
Key Features
- Single Stockholder: The lone shareholder is the sole director and president.
- Limited Liability: The OPC has a separate juridical personality. The personal assets of the stockholder are generally protected from the corporation's liabilities, provided the "piercing the corporate veil" doctrine does not apply.
- Perpetual Existence: Like standard corporations, an OPC enjoys perpetual life. In the event of the stockholder's death, the designated nominee takes over.
- No Minimum Capital Stock: Generally, no minimum authorized capital stock is required, unless specifically mandated by special laws.
2. Who Can (and Cannot) Form an OPC?
Eligible Entities
- Natural Persons: Must be of legal age.
- Trusts: An estate being managed by a trustee.
- Estates: Through the administrator or executor.
Excluded Entities
The following are expressly prohibited from incorporating as an OPC:
- Banks and quasi-banks.
- Pre-need, trust, and insurance companies.
- Public and publicly-listed companies.
- Non-chartered Government-Owned and Controlled Corporations (GOCCs).
- Natural persons who are licensed to exercise a profession (e.g., Lawyers, CPAs, Doctors) for the purpose of practicing said profession.
3. Mandatory Officers and Appointments
While there is only one stockholder, the law requires certain roles to be filled to ensure corporate accountability.
The President and Director
The single stockholder is automatically the sole Director and President.
Corporate Secretary
The stockholder must appoint a Corporate Secretary who is a Filipino citizen and resident of the Philippines. The single stockholder cannot be the Corporate Secretary.
Treasurer
The stockholder may appoint a Treasurer. Unlike the Secretary, the single stockholder can be the Treasurer, provided they post a surety bond with the Securities and Exchange Commission (SEC). The bond amount is based on the corporation's self-rated authorized capital stock and must be renewed annually.
Nominee and Alternate Nominee
The stockholder is required to designate a Nominee and an Alternate Nominee. These individuals will manage the corporation’s affairs in the event of the stockholder’s death or incapacity. Written consent from both must be attached to the application for incorporation.
4. The Incorporation Process
Registration is primarily handled through the SEC's Electronic Simplified Processing of Application for Registration of Company (eSPARC) system.
Step-by-Step Procedure
- Name Reservation: Verify and reserve the corporate name. It must contain the suffix "OPC" (e.g., Juan Dela Cruz Trading OPC).
- Submission of Articles of Incorporation (AOI): Submit the AOI detailing the primary purpose, principal office address, capital structure, and the names of the Nominee and Alternate Nominee.
- Payment of Fees: Pay the filing fees and the legal research fee.
- Issuance of Certificate of Registration: Once approved, the SEC issues the Certificate of Incorporation, signaling the commencement of corporate existence.
- Post-Registration Requirements: Obtain a Business Permit from the Local Government Unit (LGU), register with the Bureau of Internal Revenue (BIR) for a TIN and Authority to Print (ATP), and register with SSS, PhilHealth, and Pag-IBIG.
5. Corporate Records and Reporting
An OPC is not exempt from regulatory compliance. It must maintain a Corporate Minutes Book containing all resolutions and actions taken by the single stockholder.
Annual Requirements
The SEC requires the following filings:
- Audited Financial Statements (AFS): If total assets or total liabilities exceed $₱600,000$ (or as adjusted by the SEC). If below this threshold, a simplified Financial Statement under oath by the Treasurer is sufficient.
- General Information Sheet (GIS): Filed annually.
- Special Reports: Any changes in the Nominee or Alternate Nominee must be reported to the SEC.
6. Comparison: OPC vs. Sole Proprietorship
| Feature | Sole Proprietorship | One Person Corporation (OPC) |
|---|---|---|
| Legal Personality | No separate legal identity from the owner. | Separate and distinct juridical personality. |
| Liability | Unlimited personal liability for business debts. | Limited liability (assets are protected). |
| Taxation | Taxed as an individual. | Taxed as a corporation (Corporate Income Tax). |
| Succession | Business ends with the owner. | Perpetual existence; continues via Nominee. |
| Registration | Department of Trade and Industry (DTI). | Securities and Exchange Commission (SEC). |
7. Conversion of Corporations
The RCC allows for flexibility in corporate structure:
- Ordinary Corporation to OPC: When a single stockholder acquires all the shares of an ordinary corporation, they may apply for conversion to an OPC by submitting a verified application.
- OPC to Ordinary Corporation: An OPC may be converted into an ordinary stock corporation by filing a notice with the SEC and complying with the requirements for multiple incorporators.