Establishing a business entity in the Philippines requires navigating a multi-layered regulatory framework. The primary legislation governing this process is Republic Act No. 11232, otherwise known as the Revised Corporation Code of the Philippines (RCC).
The following is a comprehensive guide to the legal and administrative steps required to register and incorporate a company in the Philippine jurisdiction.
I. Determination of Business Structure
Before initiating registration, the incorporators must decide on the legal form of the entity. Under the RCC, the most common structures are:
- Domestic Stock Corporation: A corporation where capital is divided into shares and dividends are distributed to stockholders. It requires at least one (1) but not more than fifteen (15) incorporators (who can now be natural persons, partnerships, or corporations).
- One Person Corporation (OPC): A corporation with a single stockholder who also serves as the sole Director and President.
- Non-Stock Corporation: Formed for charitable, religious, educational, or professional purposes where no part of the income is distributable as dividends.
II. Step-by-Step Registration Process
1. SEC Name Reservation
The first step is securing a unique corporate name through the Securities and Exchange Commission (SEC) via the Electronic Simplified Processing of Application for Registration of Company (eSPARC) system.
- The name must not be "identical, deceptively or confusingly similar" to existing registered names.
- It must contain the suffix "Corporation," "Corp.," "Incorporated," or "Inc." (or "OPC" for One Person Corporations).
2. Preparation of Constitutional Documents
The incorporators must draft and execute the following:
- Articles of Incorporation (AOI): This document defines the corporation's purpose, principal office address, term of existence (now perpetual by default), and details of the incorporators and directors.
- Bylaws: These are the internal rules of the corporation, governing meetings, duties of officers, and stock transfers.
- Treasurer’s Affidavit: A sworn statement by the elected Treasurer certifying the amount of capital subscribed and paid.
Note on Capitalization: Under the RCC, there is no longer a minimum authorized capital stock requirement for domestic corporations, unless specifically required by special laws (e.g., banks, insurance companies, or recruitment agencies).
3. Filing and Payment of Fees
Documents are submitted through the eSPARC portal. Once the SEC reviews and provides pre-approval, the filing fees must be paid. Fees are generally calculated as a percentage of the authorized capital stock plus legal research fees.
4. Issuance of Certificate of Incorporation
Upon approval, the SEC issues the Certificate of Incorporation. This marks the commencement of the corporation’s juridical personality, meaning it can now legally enter into contracts, sue, and be sued.
III. Post-Incorporation Requirements (LGU and National)
Registration with the SEC does not grant the authority to commence operations. The following secondary permits are mandatory:
5. Local Government Unit (LGU) Permits
- Barangay Clearance: Obtained from the specific local district where the office is located.
- Mayor’s Business Permit: Obtained from the City or Municipal Hall. This involves inspections by the Bureau of Fire Protection (BFP), Sanitary Office, and Zoning Office.
6. Bureau of Internal Revenue (BIR) Registration
Every corporation must register with the BIR District Office having jurisdiction over its principal office to:
- Secure a Taxpayer Identification Number (TIN).
- Pay the Annual Registration Fee.
- Register Books of Accounts.
- Secure the Authority to Print (ATP) for official receipts and invoices.
7. Statutory Employer Registration
To comply with Philippine labor laws, the corporation must register as an employer with the following agencies:
- Social Security System (SSS): For social insurance.
- Philippine Health Insurance Corporation (PhilHealth): For health insurance.
- Home Development Mutual Fund (Pag-IBIG): For housing and savings.
IV. Summary of Documentary Requirements
| Document | Purpose | Agency |
|---|---|---|
| Articles of Incorporation | Define corporate structure | SEC |
| Bylaws | Internal governance rules | SEC |
| Lease Contract | Proof of business address | LGU / BIR |
| Certificate of Registration | Tax compliance | BIR |
| Mayor's Permit | Authority to operate locally | City Hall |
V. Annual Compliance and Maintenance
Incorporation is not a one-time event but requires continuous compliance to maintain "Good Standing."
- General Information Sheet (GIS): Must be filed with the SEC within thirty (30) days from the date of the annual stockholders' meeting. It summarizes the current ownership and directorship.
- Audited Financial Statements (AFS): Must be filed annually with both the SEC and the BIR.
- Minutes of Meetings: The corporation must maintain a Minutes Book recording all proceedings of stockholders and directors.
Failure to comply with these post-incorporation requirements may result in the corporation being placed under "delinquent status," which carries significant monetary penalties and may lead to the revocation of the Certificate of Incorporation.