One Person Corporation Under the Revised Corporation Code
Under the Revised Corporation Code, a single stockholder may now form a corporation. Said corporation is called a One Person Corporation (“OPC”). The single stockholder in an OPC should be a natural person, trustee or estate.
Banks and quasi-banks, preneed, trust, insurance, public and publicly listed companies, and non chartered government owned and controlled corporations may not incorporate as an OPC. A natural person who is licensed to exercise a profession may not organize as an OPC for the purpose of exercising such profession except as otherwise provided under special laws.
No minimum capital stock is required for an OPC except as provided under special laws. The OPC is still required to submit an Articles of Incorporation, but it is not required to submit By Laws.
An OPC shall indicate the letters “OPC” either below or at the end of its corporate name.
The single stockholder shall be the sole director and president of the OPC.
The single stockholder shall appoint a treasurer, corporate secretary and other officers as he may deem necessary. He may not be appointed as the corporate secretary. If he appoints himself as treasurer, he shall be required to submit a bond with the Securities and Exchange Commission (SEC).
The single stockholder shall also appoint a nominee and alternate nominee who shall take his place as director and manage the corporation’s affairs in case of his death or incapacity. The details of the nominee and alternate nominee shall be stated in the Articles of Incorporation. If the nominee and/or alternate nominee will be changed, the single stockholder shall give the names of the new nominees and their consent to the SEC.
A sole shareholder claiming limited liability has the burden of affirmatively showing that the corporation was adequately financed. Where the single stockholder cannot prove that the property of the OPC is independent of the stockholder's personal property, the stockholder shall be jointly and severally liable for the debts and other liabilities of the OPC. However, the principle of piercing the corporate veil still applies to OPCs.
Ordinary corporations may convert to OPCs and OPCs may also convert to ordinary corporations upon compliance with Philippine law and rules of the SEC.
The SEC has started accepting applications for the incorporation of OPCs last May 6, 2019.
This article does not constitute and is not intended to be legal advice. If you have any question or need any assistance in forming a One Person Corporation, please feel free to send us an email at roselle.jean@nonatolaw.com.
