In the Philippines, the establishment of a non-stock, non-profit (NSNP) educational institution is a rigorous process governed primarily by the Revised Corporation Code (Republic Act No. 11232) and the Education Act of 1982 (Batas Pambansa Blg. 232). Unlike for-profit corporations, these entities are organized for public benefit, where no part of the income is distributable as dividends to members, trustees, or officers.

The following is a comprehensive legal guide on the requirements and procedures for its creation.

I. Governance and Structural Requirements

Under Philippine law, educational institutions must generally be incorporated as a corporation. For NSNP entities, the following structural mandates apply:

Board of Trustees: The number of trustees must be in multiples of five (5), usually not less than five (5) nor more than fifteen (15).
Term Limits: Trustees serve staggered terms. One-fifth (1/5) of their number is elected annually for a term of five years.
Citizenship Requirements: While the Revised Corporation Code has relaxed some citizenship rules for general corporations, the 1987 Constitution (Article XIV, Section 4) dictates that educational institutions must be owned solely by citizens of the Philippines or corporations/associations at least 60% of the capital of which is owned by such citizens. However, schools established by religious groups and mission boards are generally exempt from this 60% rule.

II. Securities and Exchange Commission (SEC) Registration

The first legal step is the registration of the Articles of Incorporation (AOI) and Bylaws.

Name Reservation: The name must include the term "School," "College," "Institute," or "Academy" and must not be identical or deceptively similar to existing institutions.
Purpose Clause: The AOI must explicitly state that the institution is a non-stock, non-profit entity dedicated to educational purposes.
No Dividend Clause: A specific provision must state that no part of the corporation’s net income shall inure to the benefit of any private individual.
Dissolution Clause: It must stipulate that in case of dissolution, the remaining assets shall be transferred to another non-profit organization with a similar purpose or to the government.
Capitalization: While there is no "authorized capital stock," the institution must declare its Total Contribution, which must be sufficient to support its initial operations.

III. Department of Education (DepEd) or CHED Approval

Incorporation with the SEC does not grant the "Right to Operate." An institution must obtain a Permit to Operate or Recognition from the relevant government agency:

DepEd: For Kindergarten, Elementary, and Secondary (High School) levels.
Commission on Higher Education (CHED): For Tertiary (College) and Graduate levels.
TESDA: For technical-vocational courses.

Requirements for the Permit to Operate include:

Feasibility Study: An assessment of the need for the school in the locality.
Curriculum: Proof that the program of study aligns with national standards.
Faculty Qualifications: List of teaching staff meeting the minimum educational requirements (e.g., Master’s degrees for college instructors).
Library and Laboratories: Compliance with minimum holdings and equipment standards.

IV. Site and Facilities Requirements

The law imposes strict physical plant requirements to ensure a conducive learning environment:

Ownership of Land: The institution should ideally own the site. If leased, the lease contract must be registered and valid for at least ten (10) years.
Building Permits: Compliance with the National Building Code and Fire Code of the Philippines.
Zoning: A Certificate of Local Zoning Compliance from the local government unit (LGU).

V. Bureau of Internal Revenue (BIR) and Tax Exemption

One of the primary advantages of an NSNP educational institution is the tax privilege. Under Section 4(3), Article XIV of the 1987 Constitution, all revenues and assets of non-stock, non-profit educational institutions used actually, directly, and exclusively for educational purposes shall be exempt from taxes and duties.

To avail of this, the institution must:

Register with the BIR: Obtain a Tax Identification Number (TIN) and register books of accounts.
Apply for a Tax Exemption Ruling: This is not automatic. The institution must prove to the BIR that its earnings are plowed back into the school for improvements, scholarships, or operations.
Donor's Tax Exemption: Contributions to these institutions are often deductible from the donor's gross income and exempt from donor's tax, provided the institution is accredited by the Philippine Council for NGO Certification (PCNC).

VI. Local Government Requirements

Before beginning actual operations, the institution must secure:

Barangay Clearance.
Mayor’s Business Permit (Note: While the school may be tax-exempt on income, it is still subject to local regulatory fees).
Sanitary Permit.
Occupancy Permit.

VII. Summary Checklist Table

Category	Key Requirement
Corporate	SEC Registration, Articles of Incorporation, Bylaws.
Ownership	At least 60% Filipino ownership (except for religious schools).
Academic	DepEd/CHED/TESDA Permit to Operate and Recognition.
Governance	Board of Trustees (multiples of 5).
Facilities	Minimum land area, library, labs, and safety clearances.
Fiscal	BIR Certificate of Registration and Tax Exemption Ruling.