Introduction

In the Philippines, religious organizations and churches seeking formal legal recognition as non-stock, non-profit entities must comply with the provisions of the Revised Corporation Code of the Philippines (Republic Act No. 11232, enacted in 2019), which repealed the old Corporation Code (Batas Pambansa Blg. 68). This law governs the formation, operation, and dissolution of corporations, including non-stock corporations dedicated to religious purposes. Registering as a non-stock, non-profit religious corporation provides legal personality, allowing the entity to own property, enter contracts, sue and be sued, and enjoy certain tax benefits under Philippine laws.

Religious corporations fall under the category of non-stock corporations, where no part of the income is distributed as dividends to members, trustees, or officers. Instead, all revenues must be used exclusively for religious, charitable, or educational purposes. This guide outlines the entire process, from pre-registration requirements to post-registration compliance, based on Philippine legal frameworks. It is essential to note that while this article provides a thorough overview, consulting a licensed attorney or the Securities and Exchange Commission (SEC) is recommended for case-specific advice, as regulations may evolve through administrative issuances.

Legal Basis and Classification

The primary law is the Revised Corporation Code (RCC), particularly Sections 102 to 116, which address non-stock corporations. Religious corporations are explicitly recognized under Section 109 of the RCC, which allows for the formation of corporations for religious purposes. These entities are distinct from for-profit corporations and are exempt from certain requirements applicable to stock corporations.

Key characteristics of a non-stock, non-profit religious organization:

Non-Stock Nature: No capital stock is issued, and membership is not based on shareholdings but on adherence to the organization's rules.
Non-Profit Purpose: As per Section 87 of the RCC, the corporation must operate without profit motive, with all assets and income devoted to religious activities, such as worship, evangelism, community service, or spiritual education.
Religious Focus: The Articles of Incorporation must specify religious objectives, such as propagating faith, maintaining places of worship, or conducting missionary work.

Churches may also qualify as "religious societies" or "religious corporations sole" under Section 110 of the RCC. A corporation sole is a special type where a single natural person (e.g., a bishop or head of the church) holds the corporate powers, suitable for hierarchical religious structures like the Roman Catholic Church. However, for broader organizations involving multiple members, a standard non-stock corporation is more common.

Eligibility and Pre-Registration Requirements

Any group of at least five (5) natural persons, who are of legal age (18 years or older) and residents of the Philippines (though foreigners may participate if not restricted by the organization's by-laws), can form a non-stock religious corporation. Artificial persons (e.g., other corporations) cannot be incorporators but may become members post-registration.

Before proceeding:

Purpose Alignment: Ensure the organization's objectives are purely religious and non-profit. Mixing commercial activities could disqualify it from non-stock status.
Name Reservation: The corporate name must be unique, not misleading, and indicative of its religious nature (e.g., "Philippine Evangelical Church Foundation, Inc."). It cannot use terms like "bank," "trust," or "insurance" without special approval.
Minimum Capital: No minimum paid-up capital is required for non-stock corporations under the RCC, unlike stock corporations which need at least PHP 5,000.
Tax Considerations: While registration with the SEC grants legal personality, tax exemptions (e.g., from income tax under Section 30(E) of the National Internal Revenue Code, as amended by the TRAIN Law and CREATE Act) require separate accreditation from the Bureau of Internal Revenue (BIR).

Step-by-Step Registration Process

The registration is handled exclusively by the Securities and Exchange Commission (SEC), with applications submitted online via the SEC's Electronic Simplified Processing of Application for Registration of Corporation (eSPARC) system or in person at SEC offices.

Step 1: Name Verification and Reservation

Access the SEC's online portal (www.sec.gov.ph) and use the Company Name Verification System.
Reserve the name for 30, 60, or 90 days by paying a fee (PHP 100 for 30 days).
Ensure the name includes "Inc." or "Incorporated" and reflects the religious purpose.

Step 2: Preparation of Incorporation Documents

The core documents are the Articles of Incorporation (AOI) and By-Laws (BL), which must be notarized.

Articles of Incorporation (AOI):
- Must include:
  - Corporate name.
  - Purpose clause: Explicitly state religious objectives (e.g., "To establish and maintain churches for Christian worship and to propagate the Gospel").
  - Principal office address in the Philippines.
  - Term of existence (perpetual under the RCC unless specified otherwise).
  - Names, nationalities, and residences of at least five incorporators.
  - Number of trustees (at least 5, up to 15).
  - Amount of contributions or endowments, if any.
  - A clause stating that no part of income inures to private benefit.
  - Provisions for dissolution and asset distribution (assets must go to similar non-profit entities).
- For religious corporations sole: Specify the single incorporator and succession rules.
By-Laws (BL):
- Detail internal governance, including:
  - Membership qualifications and rights.
  - Meetings (annual, special) and quorum.
  - Trustee elections, powers, and duties.
  - Officer roles (e.g., president as spiritual leader).
  - Fiscal year and financial management.
  - Amendment procedures.
- Must align with the RCC and not contradict the AOI.

Additional documents:

Cover sheet.
Treasurer's Affidavit certifying contributions (if applicable).
Endorsement from relevant government agencies if the organization engages in regulated activities (e.g., Department of Education for schools attached to the church).
For foreign involvement: Proof of reciprocity if foreigners hold key positions.

Step 3: Submission and Payment

Submit via eSPARC or at SEC Extension Offices (e.g., in Manila, Cebu, Davao).
Pay filing fees: Basic fee is PHP 2,020 plus 1% of the value of contributions (if over PHP 1 million), documentary stamp tax (PHP 30), and other surcharges. Total often ranges from PHP 3,000 to PHP 10,000 for small organizations.
The SEC reviews for compliance within 3-5 working days under the Ease of Doing Business Act.

Step 4: Approval and Issuance

If approved, the SEC issues a Certificate of Incorporation, granting legal personality.
Rejected applications can be appealed or amended.

For corporations sole, the process is simplified, requiring only the AOI signed by the sole incorporator and verified by affidavits from religious authorities.

Post-Registration Obligations

Once registered:

SEC Compliance:
- File annual General Information Sheet (GIS) and Audited Financial Statements (AFS) within specified deadlines.
- Report changes in trustees or address via amended AOI/BL.
- Maintain books of accounts and minutes.
BIR Registration:
- Obtain a Taxpayer Identification Number (TIN) via BIR Form 1903.
- Apply for tax exemption certificate under Revenue Regulations No. 13-98, submitting proof of non-profit status, AOI, and financial reports.
- Exempt from income tax on religious activities but subject to VAT or percentage tax on unrelated business income.
Other Registrations:
- Barangay Clearance, Mayor's Permit, and Sanitary Permit for the physical church premises.
- If employing staff, register with SSS, PhilHealth, and Pag-IBIG.
- For charitable arms, accredit with the Philippine Council for NGO Certification (PCNC) for donee institution status.
Governance and Operations:
- Trustees manage affairs, but members vote on key matters unless by-laws provide otherwise.
- Prohibited from political partisanship under the Omnibus Election Code.
- Assets are held in trust; upon dissolution, they revert to similar religious entities (Section 94, RCC).

Advantages and Challenges

Advantages:

Legal protection against personal liability for trustees.
Eligibility for donations with tax incentives for donors.
Perpetual succession, ensuring continuity beyond founders.
Access to government grants for social programs.

Challenges:

Strict reporting requirements to maintain non-profit status.
Potential audits by BIR for tax compliance.
Disputes over property ownership, as seen in cases like the Iglesia ni Cristo schisms, resolved via courts under the RCC.
Foreign funding must comply with Anti-Money Laundering laws.

Special Considerations for Churches

Freedom of Religion: Protected by Article III, Section 5 of the 1987 Constitution, registration is voluntary but recommended for legal benefits.
Historical Context: Many established churches (e.g., Catholic dioceses) operate as corporations sole since Spanish colonial times, updated under the RCC.
Dispute Resolution: Internal conflicts are handled via by-laws; courts intervene only if civil rights are violated (e.g., Supreme Court rulings in religious property disputes).
Online and Modern Adaptations: With digital evangelism, ensure compliance with Data Privacy Act (RA 10173) for member data.

Conclusion

Registering a non-stock, non-profit religious organization or church in the Philippines formalizes its mission, ensuring sustainability and legal safeguards. The process, while bureaucratic, is streamlined under the RCC to promote ease of business. Adherence to ongoing compliance is crucial to retain benefits and avoid penalties, such as fines up to PHP 1 million for non-filing. Aspiring founders should prioritize ethical governance to uphold the spiritual integrity of their institution. For updates, refer to SEC Memorandum Circulars and BIR Revenue Memoranda.