Steps to Register a 100% Filipino-Owned Corporation

Below is a comprehensive overview of how to register a 100% Filipino-owned corporation in the Philippines, from legal foundations to post-registration requirements. Please note that this information is for general guidance only and does not constitute legal advice. Always consult with a qualified lawyer or relevant government agency for up-to-date and situation-specific information.

1. Legal Framework

1.1. Revised Corporation Code of the Philippines

  • The primary law governing corporations in the Philippines is Republic Act No. 11232, known as the Revised Corporation Code of the Philippines (enacted in 2019).
  • It governs the formation, organization, and regulation of both stock and non-stock corporations.

1.2. Constitutional and Statutory Restrictions

  • Under the Philippine Constitution, certain industries may require a specific percentage of Filipino ownership. However, for a 100% Filipino-owned corporation operating in a generally unrestricted industry, there are no foreign equity limitations.

1.3. Types of Corporations

  • Stock Corporation: Has authorized capital stock divided into shares, which are distributed among the shareholders. Primarily engaged in profit-making activities.
  • Non-Stock Corporation: Organized primarily for charitable, educational, cultural, or social purposes, and does not issue shares.

Most people looking to form a “100% Filipino-owned corporation” in a commercial sense will form a stock corporation.

2. Preliminary Considerations

2.1. Name Verification

Before drafting documents, you should ensure your proposed corporate name is available and not deceptively or confusingly similar to any existing entity. This is done through the Securities and Exchange Commission (SEC) Name Verification System.

2.2. Determining Incorporators and Directors

  • A Philippine corporation requires at least 2 incorporators (the old rule of at least 5 incorporators has been removed by the Revised Corporation Code; however, some still prefer having more for practical governance reasons).
  • Each incorporator must hold at least one share of stock.
  • The corporation must have a board of directors consisting of at least 2 but not more than 15 members, each of whom must own at least one share in the corporation.
  • For a 100% Filipino-owned corporation, all incorporators and directors must be Filipino citizens.

2.3. Minimum Capital Requirements

  • The Revised Corporation Code itself generally does not impose a mandatory minimum capital stock.
  • However, specific laws and regulations might impose minimum capital requirements for certain industries (e.g., banking, securities brokerage).
  • If your business does not fall under any special industry regulation, you can set your own authorized capital, subject to the subscription and payment requirements.

3. Step-by-Step Registration Process

Below is the standard procedure as required by the Securities and Exchange Commission (SEC) and other government agencies. The steps may vary slightly depending on location or any updates to SEC rules, but this provides a thorough guide.

Step 1: Verify and Reserve Proposed Name

  1. Online Name Reservation: Use the SEC’s online system (if available) or visit the SEC office. Provide your proposed corporate name and possible alternatives.
  2. Validity: Once the name is approved, the SEC typically provides a reservation period (e.g., 30–90 days). You must proceed with registration within this timeframe or renew the reservation.

Step 2: Prepare Articles of Incorporation and By-Laws

You must draft the following foundational documents:

  1. Articles of Incorporation

    • Name of the Corporation
    • Purpose/Primary Purpose: A clear and specific business purpose.
    • Principal Office Address: Must be in the Philippines.
    • Term of Existence: Corporations can now exist perpetually (unless a shorter term is indicated).
    • Incorporators: Names, citizenship, and residences of at least two incorporators.
    • Capital Structure: Authorized capital stock, number of shares, par value, and subscription details.
    • Other Provisions: Additional clauses on corporate governance or disclaimers as needed.

  2. By-Laws

    • Details on board meetings, officers, committees, and voting procedures.
    • Procedures for amending the by-laws, issuing shares, and other governance matters.

Note: Some incorporators choose to adopt the SEC’s standard templates. Others create tailor-made documents, especially for complex corporate structures.

Step 3: Fill Out SEC Application Forms

The SEC typically provides standard forms for corporation registration. Required information often includes:

  • Corporate Name and Proposed Business Activities
  • Principal Office Address
  • Name, Nationality, and Residential Address of the Incorporators
  • Subscriber’s Information (for the capital stock)

You will also need to attach a Cover Sheet for filing, which is available on the SEC website or at SEC offices.

Step 4: Pay Filing Fees and Submit Documents to the SEC

  1. Assessment of Fees

    • SEC staff (or the online system) will assess the registration fees based on authorized capital stock and other charges.
    • Typical fees include the Filing Fee, Legal Research Fee, and Name Reservation Fee.

  2. Submission of Documents

    • Original signed copies of the Articles of Incorporation and By-Laws.
    • Treasurer’s Affidavit or Notarized Subscription Documents indicating that the required portion of the capital stock has been subscribed and partially paid (as required by law).
    • Affidavit of incorporators stating compliance with the Revised Corporation Code.
    • Other documents the SEC may require depending on your industry.

  3. Issuance of Certificate of Incorporation

    • If the SEC finds everything in order, it will issue a Certificate of Incorporation, officially recognizing the corporation’s legal existence.

4. Post-Incorporation Registrations

After obtaining the Certificate of Incorporation, the corporation must register with various government agencies and secure local business permits.

4.1. Register with the Bureau of Internal Revenue (BIR)

  1. Obtain Tax Identification Number (TIN): If not already issued to the corporation.
  2. Apply for Authority to Print (ATP) Receipts/Invoices: Your official receipts/invoices must be BIR-registered.
  3. Register Books of Accounts: This includes journals, ledgers, and other accounting records.
  4. Pay Annual Registration Fee: An annual fee is due every January 31 or upon commencement of business.

Tip: Ensure timely compliance with BIR filings, including monthly, quarterly, and annual tax returns.

4.2. Secure Business Permit from the Local Government Unit (LGU)

Each city or municipality in the Philippines requires businesses to obtain a Mayor’s Permit or Business Permit. Requirements typically include:

  • Certificate of Incorporation (from SEC)
  • BIR Registration Documents (e.g., TIN, ATP, receipts)
  • Barangay Clearance
  • Lease Contract or Land Title (showing right to use premises)
  • Fire Safety Inspection Certificate (from the local fire department)

The LGU will issue a Mayor’s Permit and/or Business License upon satisfying all local requirements.

4.3. Register with Social Security System (SSS), PhilHealth, and Pag-IBIG

If the corporation will hire employees, it must:

  1. Register as an Employer at the SSS, PhilHealth, and Pag-IBIG (Home Development Mutual Fund) offices.
  2. Enroll Employees so that mandatory contributions can be deducted and remitted.

4.4. Department of Labor and Employment (DOLE) Registration

  • Corporations employing 5 or more workers are generally required to register with the Department of Labor and Employment.
  • DOLE registration helps monitor compliance with labor regulations (e.g., wages, benefits, safety standards).

5. Ongoing Compliance Requirements

Being legally incorporated is only the first step. Staying compliant involves meeting several recurring obligations:

  1. Annual General Meeting (AGM): Stock corporations must hold an annual stockholders’ meeting to discuss corporate affairs and elect the board of directors.
  2. Submission of General Information Sheet (GIS): Must be submitted to the SEC within 30 calendar days from the date of the annual stockholders’ meeting. Any subsequent changes (e.g., change in the corporate secretary) must be updated accordingly.
  3. Submission of Annual Financial Statements (AFS): Must be audited by an independent certified public accountant (CPA) and filed with the SEC.
  4. Corporate Secretary and Stock Transfer Book: Maintain updated records of stock issuances and transfers.
  5. Tax Compliance: File monthly, quarterly, and annual tax returns and pay correct taxes to the BIR.
  6. Local Renewals: Renew local business permits (Mayor’s Permit, Barangay Clearance) annually, typically at the beginning of the year.

6. Special Considerations

  1. Single Stockholder Corporation (One Person Corporation)

    • The Revised Corporation Code introduced the One Person Corporation (OPC), which can be 100% Filipino-owned. This option streamlines the process if you prefer to have only one shareholder. However, certain corporate governance formalities still apply.

  2. Industry-Specific Licenses

    • Depending on your business activities (e.g., lending, financing, educational institution, etc.), you may need special licenses from agencies such as the Bangko Sentral ng Pilipinas, Department of Education, or others.

  3. Foreign Ownership Restrictions

    • For a 100% Filipino-owned corporation, this is typically not an issue. However, if you eventually accept foreign investors, be aware of constitutional and statutory limits on foreign equity in certain sectors (e.g., land ownership, media, public utilities).

  4. Legal and Accounting Support

    • Engaging a law firm or corporate lawyer is recommended to ensure correctness of documents and continuous compliance.
    • Hiring a licensed accountant or a well-versed bookkeeper helps with BIR obligations and financial statements.

7. Timeline and Costs

  • Timeline: Registration with the SEC can take anywhere from a few days to a few weeks, depending on the completeness of documents, name approval, and the SEC’s processing times. Post-incorporation registrations with the BIR and LGU typically take an additional few weeks.
  • Costs: Include SEC filing fees, notarial fees, documentary stamp taxes (on shares), legal consultations (if any), and subsequent registration fees with the BIR and local government. Costs vary widely depending on factors like the authorized capital stock and the complexity of the business.

8. Practical Tips for a Smooth Registration

  1. Check Name Availability Early: Avoid redoing documents by ensuring your chosen name is available before preparing final versions of the Articles of Incorporation.
  2. Draft Clear, Specific Purpose Clauses: The SEC prefers clear, specific business purposes over overly broad language.
  3. Organize Documents: Maintain a checklist for all SEC and post-registration forms.
  4. Stay Updated: Registration rules and fees can change, so consult official SEC memoranda or reputable professional services for recent updates.
  5. Retain Professionals: The time and potential headaches saved by having knowledgeable counsel and accountants often outweigh the professional fees.

Conclusion

Forming a 100% Filipino-owned corporation in the Philippines involves careful planning, proper documentation, and timely filings. By understanding the requirements under the Revised Corporation Code and securing the necessary registrations from the Securities and Exchange Commission, Bureau of Internal Revenue, Local Government Units, and other agencies, you can ensure your corporation is legally compliant and well-structured for growth.

Because regulations and procedures can change, it is always wise to seek professional assistance from a lawyer or business consultant familiar with current Philippine corporate laws. This ensures accuracy and efficiency in the registration process and avoids potential penalties or delays.

Disclaimer: The information provided here is for general reference and educational purposes only and should not be construed as legal advice. For specific cases or questions, consult a qualified attorney or the appropriate government agency.

Disclaimer: This content is not legal advice and may involve AI assistance. Information may be inaccurate.

Privacy Policy

Terms of Use

Lawyer Login

 
 
Privacy Policy         Terms of Use         Lawyer Login