Legal Requirements for Freelancers to Form a One Person Corporation (OPC) in the Philippines
Fast take‑away Any Filipino freelancer may now incorporate alone under the 2019 Revised Corporation Code (RCC). You register online with the SEC, submit an Articles‑of‑Incorporation form that names a nominee and alternate nominee, pay modest fees, and thereafter observe the same annual reporting and tax duties that ordinary corporations follow—minus the need for by‑laws or a board of directors.
1. Statutory Basis
Republic Act No. 11232 – Revised Corporation Code of 2019
- Title XIV (Secs. 116–132) created the One Person Corporation.
- Supersedes the requirement of five incorporators under the old Code.
2. Who May (and May Not) Incorporate
| Eligible | Ineligible |
|---|---|
| • Natural person of legal age (18 +)—e.g., a freelance graphic designer, writer, developer, influencer | • Banks, quasi‑banks, pre‑need, insurance, trust, and publicly‑listed companies (Secs. 116 & 22) |
| • Trust estate or estate of a deceased person (through a fiduciary) | • Professionals when the OPC will practice a regulated profession (Law, Medicine, etc.) unless a special law allows it |
| • Foreign individual (subject to Foreign Investments Act equity caps and minimum capital—see § 8) |
Tip: A freelancer who renders professional services (e.g., architect) may still form an OPC for related but non‑practice activities—say, selling architectural software. Seek PRC / SEC clearance to be sure.
3. Minimum Capitalization
General rule: ₱ 0 minimum paid‑up.
Exceptions:
- Industries with special laws (e.g., financing companies: ₱ 10 million).
- Treasurer‑in‑trust surety bond: If paid‑up capital > ₱ 1 million and the single stockholder also acts as treasurer, the SEC requires a surety bond equal to the amount of the authorized capital.
4. Required Officers
| Post | Who may serve | Key duties |
|---|---|---|
| Single stockholder | Always acts as Sole Director & President | Day‑to‑day management |
| Treasurer | May be the stockholder OR another resident; must post bond if also the stockholder | Custody of funds & quarterly report on fund disbursement |
| Corporate Secretary | Different from the stockholder; must be a Filipino citizen and resident | Keeps minutes & stock ledger |
| Nominee & Alternate Nominee | Any natural person; disclosed in AOI | Take over upon death, incapacity, or temporary inability of the stockholder |
Good practice: Have your nominee/alternate sign written consents with specimen signatures; file them together with the AOI.
5. Drafting the Articles of Incorporation (AOI)
The SEC supplies an OPC fill‑in‑the‑blanks template (Annex C of SEC Memorandum Circular No. 7‑2019). Mandatory contents:
- Corporate name + “OPC” suffix.
- Primary purpose (e.g., “to provide freelance web‑design services”).
- Principal office (must specify city/municipality).
- Term: perpetual unless otherwise stated.
- Authorized Capital Stock (ACS): amount & par value.
- Name, address, citizenship of the single stockholder.
- Name, address, citizenship of nominee & alternate nominee, with written consents.
- Statement that by‑laws are not required.
No by‑laws: OPCs are exempt (Sec. 132), simplifying start‑up.
6. SEC Registration Procedure (2025‑streamlined)
Name Reservation – through SEC CRS or eFAST; good for 30 days (₱ 100).
Upload:
- Cover Sheet
- Signed AOI (PDF)
- Nominee & Alternate Nominee Consents
- Treasurer’s Bond or Affidavit (if stockholder is treasurer)
- Valid IDs (stockholder & officers)
Pay filing fees:
- Filing fee: 1⁄2 % of ACS or ₱ 2,000, whichever higher
- Legal Research Fee: 1 % of filing fee
Receive Digital Certificate of Incorporation within 1–3 working days.
Post‑Incorporation:
- Buy SEC‑stamped AOI printout.
- Register with BIR within 30 days (Form 1903), pay ₱ 500 & loose‑leaf books.
- Secure Mayor’s/Business Permit in LGU.
- Register employer accounts with SSS, PhilHealth, Pag‑IBIG once you hire staff.
7. Annual & Periodic Compliance
| Report | Deadline | Notes |
|---|---|---|
| General Information Sheet (GIS) | Within 30 days of the anniversary of incorporation | Show updated officers, capital, nominee status |
| Audited Financial Statements (AFS) | Within 120 days after fiscal year‑end if total assets or liabilities > ₱ 600 k | Otherwise, unaudited FS may suffice |
| Treasurer’s Affidavit (if stockholder is treasurer) | 30 days after FY‑end | Certifies accuracy of FS |
| Income Tax Return (ITR) | April 15 (calendar year) or 15th day of 4th month after FY‑end | 25 % corporate rate on net income ≤ ₱ 5 million & assets ≤₱ 100 million (under CREATE) |
| Quarterly VAT / Percentage Tax | 25 days after each quarter | Freelancers under VAT threshold (₱ 3 million) may opt for 3 % percentage tax |
| Minutes of meetings / Resolutions | Keep internally; no filing | Needed if transferring shares or changing nominees |
Failure to file the GIS or AFS for three consecutive years causes the OPC to be automatically delinquent and subject to revocation.
8. Special Rules for Foreign Single Stockholders
Must fall outside the Foreign Investment Negative List.
Minimum paid‑up capital:
- US$ 200,000 (approx. ₱ 11 million) general rule.
- Reduced to US$ 100,000 if (a) exports ≥ 60 % of output or (b) employs at least 50 Filipino employees (Sec. 23, FIA).
Treasurer must be a Philippine resident.
9. Conversion & Exit
9.1 From Sole Proprietorship to OPC
- File Application for Conversion with SEC + BIR clearance of proprietorship.
- Assets & liabilities transfer via Deed of Assignment subject to documentary stamp tax.
9.2 From OPC to Ordinary Stock Corporation
- Amend AOI to increase number of incorporators (≥ 2) & directors (≥ 2).
- Attach written consent of incoming shareholders & new by‑laws.
9.3 Dissolution
- Voluntary—file Articles of Dissolution (simpler than a regular corporation).
- Automatic—upon withdrawal of the nominee & alternate without replacement within 15 days.
10. Liability & Governance Highlights
Limited liability: Personal assets shielded from business debts, except when:
- Stockholder personally guarantees obligations.
- Funds/property are commingled (piercing the corporate veil).
- Fraud or bad‑faith acts (Sec. 31).
Fiduciary duties of a director (even if only one): diligence of a “good father of a family”.
Trust fund doctrine applies—capital stock is a trust fund for creditors.
11. Pros and Cons for Freelancers
| Advantages | Cautions |
|---|---|
| • Asset protection vs. client lawsuits | • Higher compliance costs than sole prop (audit, GIS) |
| • Easier to scale—investors can later come in | • Need to keep strict books, and SEC can fine ₱ 10k+ per late report |
| • Corporate name permanence & branding (“Jane Doe Creatives OPC”) | • Must separate personal & corporate bank accounts |
| • Perpetual existence (good for estate planning) | • Cannot directly practice a regulated profession without express statutory basis |
12. Practical Start‑up Checklist (2025 Edition)
- Reserve name – 15 min.
- Prepare AOI & consents – 1 day.
- Online SEC filing & payment – 1–3 days.
- Open corporate bank account (bring SEC Certificate & IDs).
- BIR registration (Form 1903, 0605, 2000‑OT).
- Mayor’s Permit (DTI/SEC, lease/contract of space—even home office).
- Print Official Receipts & Books (loose‑leaf is common for freelancers).
- Optional: Register trade name/logo with IPOPHL.
13. Common Mistakes to Avoid
- Using “OPC” in branding before SEC approval—risk of name conflict.
- Ignoring the nominee & alternate nominee forms or failing to update them when a nominee migrates abroad.
- Mixing freelance personal PayPal/GCash with corporate funds (grounds for veil‑piercing).
- Missing the Treasurer’s surety bond when paid‑up capital exceeds ₱ 1 million.
14. Frequently Asked Questions
Can an OPC hire employees? Yes. Once you hire, register with SSS, PhilHealth, Pag‑IBIG, and DOLE.
Do I need an accountant? Not legally—but you must keep books under Philippine Financial Reporting Standards for Small Entities (PFRS‑SE). Most freelancers outsource accounting.
What if my nominee refuses to serve? File an amendment to change the nominee; otherwise, the OPC dissolves upon the stockholder’s death/incapacity.
Can I simultaneously run multiple OPCs? Yes, the RCC places no limit, but you must keep separate records and avoid conflict of interest.
15. Bottom Line
The One Person Corporation is tailor‑made for Filipino freelancers who want the protection and credibility of a corporation without the hassle of finding co‑incorporators or drafting by‑laws. By following the statutory checklist—reserve a unique “OPC” name, lodge the streamlined Articles of Incorporation with nominee consents, appoint the required officers, and comply with annual reporting—you can enjoy limited liability and an easier path to scaling your freelance enterprise.
Disclaimer: This article is for general information only and not a substitute for individualized legal, tax, or accounting advice. Consult the SEC, BIR, or a Philippine corporate lawyer for specific guidance.