A non-stock corporation is a juridical entity organized under Philippine law for purposes other than profit. It does not issue shares of stock and has no stockholders. Instead, it operates through members and is governed by a board of trustees. Its net income and assets cannot be distributed as dividends or benefits to members, trustees, or officers. Upon dissolution, remaining assets must be transferred to another non-stock corporation with similar purposes or to the Philippine government or any of its agencies or political subdivisions.

Non-stock corporations are the standard legal vehicle for charitable, religious, educational, scientific, literary, cultural, professional, civic, social welfare, and similar non-profit activities, as well as foundations, associations, clubs, institutes, and federations. They possess separate legal personality, perpetual succession (unless a limited term is stated), the capacity to own property, enter into contracts, sue and be sued, and enjoy limited liability for members and trustees, subject to fiduciary duties and exceptions for fraud or bad faith.

Legal Framework

The primary governing law is the Revised Corporation Code of the Philippines (Republic Act No. 11232), which took effect on 23 February 2019 and modernized the former Corporation Code (Batas Pambansa Blg. 68). Title VI of the Revised Corporation Code contains specific provisions on non-stock corporations. Supplementary rules include Securities and Exchange Commission (SEC) memorandum circulars and forms, the National Internal Revenue Code (particularly Section 30 on tax exemption for qualified non-stock, non-profit entities), and special regulations from other agencies when the corporation’s purpose falls under their jurisdiction (for example, DepEd or CHED for educational institutions, DOH for health-related activities, or DSWD for social welfare programs).

A non-stock corporation acquires juridical personality upon the issuance of its Certificate of Incorporation by the SEC.

Key Characteristics and Distinctions from Stock Corporations

No authorized capital stock and no shares of any class.
Membership-based rather than stock-based; members generally have one vote each unless the by-laws provide otherwise.
Governed by a Board of Trustees (minimum five, maximum fifteen) rather than a Board of Directors.
Strict non-distribution constraint: no dividends or private inurement of income or assets to members, trustees, or officers.
Purposes must be lawful and non-profit in nature; incidental profit-making activities must be related to the primary purpose.
Asset distribution on dissolution follows the non-profit purpose (cy-près principle).
Trustees and officers owe fiduciary duties of care, loyalty, and obedience; personal liability may arise for gross negligence, bad faith, or self-dealing.
Members have inspection rights over corporate books and records kept at the principal office.

These features distinguish non-stock corporations from stock corporations, partnerships, and sole proprietorships while providing the advantages of limited liability, perpetual existence, and organizational credibility for grants, donations, and public trust.

Eligibility and Minimum Requirements

Non-stock corporations are organized by natural persons of legal age with capacity to contract. The general practice and standard requirement is at least five incorporators. The Board of Trustees must consist of not less than five and not more than fifteen trustees. Incorporators and trustees may be of any nationality, although foreign participation may trigger nationality restrictions if the corporation will own land or engage in partially nationalized activities.

There is no minimum paid-in capital or authorized capital stock required for SEC registration. However, when the corporation intends to use the word “Foundation” in its name, the SEC requires proof of an initial endowment or net assets meeting the threshold prescribed in applicable SEC memorandum circulars (commonly starting at One Million Pesos in cash, property, or securities). The corporation must have sufficient resources to pursue its stated purposes.

Step 1: Name Verification and Reservation

Select a proposed corporate name that is unique, not deceptively similar to any existing registered name or trademark, and not contrary to law or public policy. The name should indicate the non-profit character of the entity by including words such as “Association,” “Foundation,” “Society,” “Club,” “Institute,” “Organization,” “Federation,” or “Incorporated/Inc.”

Verify availability through the SEC’s online name verification facility. If available, file a name reservation request. The reservation is typically valid for thirty days and may be renewed upon payment of the prescribed fee. Prepare alternative names in case the primary choice is rejected or already taken.

Step 2: Preparation of the Articles of Incorporation

The Articles of Incorporation is the primary constitutive document. It must follow the form prescribed by the SEC and comply with Section 14 and the non-stock provisions of the Revised Corporation Code.

Required contents include:

Corporate name.
Specific primary purpose or purposes (and any secondary purposes), all of which must be lawful and non-profit in character.
Complete address of the principal office within the Philippines (including unit/floor, building, street, barangay, city/municipality, province, and ZIP code).
Term of existence (perpetual unless a specific term is stated).
Names, nationalities, and residence addresses of at least five incorporators.
Statement that the corporation is a non-stock corporation and that no part of its net income or assets shall inure to the benefit of any member, trustee, or officer.
Number of trustees (five to fifteen) and the names and residence addresses of the initial trustees, who shall serve until their successors are elected and qualified.
Provision on dissolution directing remaining assets to one or more non-stock corporations with similar purposes or to the government.
Any other lawful provisions the incorporators deem necessary for internal regulation.

The Articles must be signed by all incorporators. Electronic submission is permitted under current SEC rules; notarization requirements depend on the filing mode.

Step 3: Preparation of the By-Laws

The By-Laws set out the internal governance rules and must be consistent with the Articles of Incorporation and the Revised Corporation Code.

Essential provisions cover:

Qualifications, admission, classes (if any), rights, obligations, fees or dues, resignation, suspension, and expulsion of members.
Time, place, notice, quorum, and voting procedures for meetings of members and trustees (including authorization for remote participation via videoconference or other means when permitted by the by-laws or board resolution).
Number, qualifications, election, terms, powers, duties, and compensation (if any) of trustees and officers.
Creation and powers of committees.
Fiscal year.
Procedure for amending the by-laws.
Rules on conflicts of interest and fiduciary conduct.
Asset distribution on dissolution consistent with the Articles.

By-laws are adopted by the affirmative vote of a majority of the members and a majority of the trustees (or as otherwise provided). For initial filing, incorporators or initial trustees may adopt provisional by-laws subject to ratification at the organizational meeting.

Step 4: Supporting Documents and Pre-Filing Clearances

Prepare the following:

Valid government-issued IDs of all incorporators and initial trustees. Foreign nationals must submit passports and proof of lawful stay (ACR I-Card or visa).
For foundations or use of “Foundation” in the name: proof of initial endowment or assets meeting SEC-prescribed minimums (bank certificate, deed of donation, or appraisal).
Endorsements or permits from relevant government agencies when the purpose requires prior approval (DepEd/CHED/TESDA for schools, DOH for health facilities, DSWD for certain social welfare activities, etc.).
Secretary’s certificate or cover letter attesting to the documents submitted.

Step 5: Filing with the Securities and Exchange Commission

File the application electronically through the SEC’s designated online registration platform. Upload the Articles of Incorporation, By-laws, and all supporting documents in searchable PDF format. Pay the applicable filing and processing fees, which for non-stock corporations are generally fixed amounts (covering processing, legal research, and related charges) rather than a percentage of capital stock.

The SEC reviews the application for completeness and substantive compliance. Complete applications are typically processed within one to five working days. Deficiencies result in a notice to comply within a stated period. Upon approval, the SEC issues the Certificate of Incorporation, which constitutes the birth of the corporation’s juridical personality.

Step 6: Organizational Meeting and Internal Structuring

Within a reasonable time after incorporation, convene the organizational meeting of the incorporators and initial members (or the Board of Trustees). Typical agenda items include:

Ratification of the acts of the incorporators and adoption or ratification of the By-laws.
Election of the regular Board of Trustees and corporate officers (at minimum a President/Chairperson, Secretary, and Treasurer; one person may hold compatible positions unless the by-laws provide otherwise).
Authorization to open bank accounts, designate signatories, adopt accounting systems, and enter into initial contracts.
Approval of initial plans, budgets, or policies.

Prepare and sign detailed minutes of the organizational meeting. These minutes, together with the membership register and other corporate records, must be maintained at the principal office.

Step 7: Bureau of Internal Revenue Registration and Tax Matters

Register the corporation with the Revenue District Office having jurisdiction over the principal office. Obtain the corporation’s Taxpayer Identification Number and BIR Certificate of Registration. Register all books of accounts (manual or computerized) with the BIR before use.

Qualified non-stock corporations may apply for income tax exemption under Section 30 of the National Internal Revenue Code by filing an application with complete supporting documents, including the SEC Certificate of Incorporation, Articles, By-laws, sworn statement of activities, and any required agency certifications. If approved, the BIR issues a Certificate of Tax Exemption (usually valid for three years and renewable). Even with exemption, unrelated business income remains taxable, and the corporation must file required returns and comply with withholding obligations.

Step 8: Local Government and Other Agency Registrations

Secure a barangay clearance for the principal office location. Apply for a mayor’s or business permit from the city or municipality (many LGUs require this even for non-profit entities, though fees may be reduced or exempted). If employees will be hired, register as an employer with SSS, PhilHealth, and Pag-IBIG and remit contributions. Obtain sector-specific licenses or recognitions (DepEd, CHED, DOH, DSWD, etc.) as required by the corporation’s activities. Consider PCNC accreditation if the corporation will receive donations intended to be tax-deductible for donors.

Step 9: Banking and Financial Infrastructure

Open one or more corporate bank accounts in the exact name appearing on the SEC Certificate of Incorporation. Banks typically require the SEC Certificate, certified true copies of the Articles and By-laws, board resolution authorizing the account and signatories, valid IDs of signatories, and the corporation’s TIN. Implement internal controls such as dual signatories for disbursements above a threshold, regular board financial reporting, and segregation of duties to protect the non-profit character of the entity.

Step 10: Ongoing Compliance, Governance, and Reporting

Corporate Governance

The Board of Trustees must meet at least as frequently as required by the by-laws (commonly quarterly) with a quorum of a majority of trustees. Members must hold an annual meeting for the election of trustees (unless the by-laws establish staggered terms or a self-perpetuating board) and to receive reports. Trustees and officers must observe fiduciary duties and avoid conflicts of interest. Maintain at the principal office a membership register, minute books, and complete financial records open to inspection by members during reasonable hours.

Reportorial Requirements to the SEC

File the annual General Information Sheet (GIS) within thirty days from the annual members’ meeting (or from incorporation in the first year). Corporations with total assets of at least Six Hundred Thousand Pesos (₱600,000.00) must submit Audited Financial Statements prepared by an independent Certified Public Accountant. Foundations are subject to additional SEC reporting and governance standards under applicable memorandum circulars.

Amendments

Amendments to the Articles of Incorporation require approval by at least two-thirds of the members (or such higher percentage as provided) and subsequent SEC approval. By-law amendments generally require majority vote of members and trustees and filing with the SEC when they affect fundamental matters.

Dissolution

Voluntary Dissolution

Adopt a resolution of dissolution by at least two-thirds of the members (or higher percentage if required by the articles or by-laws). File a verified petition or notice with the SEC together with a plan of dissolution. Notify creditors, settle all liabilities, and distribute remaining assets to one or more non-stock corporations with similar purposes or to the government. Upon SEC approval, a Certificate of Dissolution is issued.

Involuntary Dissolution

The SEC may revoke or suspend the Certificate of Incorporation for serious violations such as prolonged failure to file reports, operation for illegal purposes, or fraudulent acts. Creditors or other parties may seek court-ordered dissolution on grounds such as insolvency.

Proper dissolution ensures that non-profit assets continue to serve their intended charitable or public purposes.

Non-stock corporations provide a stable, credible, and legally protected structure for advancing non-profit objectives in the Philippines. Strict adherence to the Revised Corporation Code, SEC regulations, tax laws, and sector-specific rules from the moment of conceptualization through ongoing operations preserves the corporation’s juridical personality, tax status, and public trust.