Amendments to the Corporation Code of the Philippines

With the introduction of the One Person Corporation (OPC) in the Amended Corporation Code of the Philippines, we have received a lot of enthusiastic inquiries from locals and foreigners alike.  However, at this point we would have to recommend holding your horses and wait for the dust to settle down, so to speak as the implementing rules have yet to be drafted and released to the public, although there are published draft guidelines for comments available in the Securities and Exchange Commission (SEC) Website.  With that said, we are sharing here today some of the provisions in the draft guidelines.  Let us start by mentioning that, by implication, the Amended Corporation Code has now allowed less than five incorporators to register a corporation.

According to the guidelines:

« Section 10 of the Revised Corporation Code paves the way for the creation of the OPC by removing the minimum number of the incorporators that may organize a corporation.  It further defines an OPC in Chapter III. »

« The Provision for one person corporation should encourage the formation of more businesses in the country by making it easier for entrepreneurs to start a limited liability company, Chairperson Emilio B. Aquino said. »

Furthermore, the guidelines define and clarify the meaning of the word « trust » as used in Section 116.

« The « trust » does not refer to a trust entity but a subject being managed by a trustee.  If the single stockholder is a trustee, administrator, executor, guardian, conservator, custodian or other person exercising fiduciary duties, proof of authority to act on behalf of the trust or estate must be submitted at the time of the incorporation. »

The guidelines also provide that a foreign natural person is allowed to put up an OPC, however subject to the constitutional and statutory restrictions on foreign participation or ownership in certain investment areas or activities, which we assume, refers to the Financial Investment Negative List (FINL).

With these developments, we hope that the SEC will soon release the official guidelines or implement rules and regulations so that the investing public will have a clearer understanding of the new provisions of the Amended Corporation Code of the Philippines.

Should you be interested in our services, please feel free to contact us at contact@orbis-alliance.com.