One Person Corporation under the Revised Corporation Code

The One Person Corporation (OPC) has been by far the biggest innovation under the Revised Corporation Code in the Philippines. It has generated a lot of interest, both locally and abroad.

Recently, the Securities and Exchange Commission (SEC) released a memorandum circular to the public for their guidance. Let us share with you some of the salient points under the SEC Memorandum Circular No. 7 Series of 2019.

Section 1. Definition of an OPC and incorporator

“A one person corporation (OPC) is a corporation with a single stockholder, who can only be a natural person, trust or estate.

The incorporator of an OPC being a natural person must be of legal age.

As an incorporator, the “trust” as used by the law does not refer to a trust entity, but the 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 incorporation.”

In the past, an OPC was limited to being a natural person aged at least 18 years old, the legal age as defined in the Philippines.

Based on the above definition however, it seems that this limitation has been removed so now even a trust or estate can be the single shareholder in an OPC. That is, provided that the person (single stockholder) representing the trust or estate as a trustee, administrator, executor, guardian, etc. can show proof of authority to act on behalf of the trustee or estate and submit it at the time of the incorporation of the OPC.

Section 2. Term of Existence of the OPC

The term of existence of the OPC shall be perpetual. However, in the case of a trust or estate being a shareholder of an OPC, its term of existence shall be co-terminous with the existence of the trust or estate.

The OPC under the name of an estate may be dissolved upon proof of Partition such as an Order of Partition issued by the Court in case of Judicial Settlement, or a Deed of Extrajudicial Settlement in case of a summary settlement of an estate.

The OPC under the name of a trustee may be dissolved upon providing proof of termination of the trust.

Section 3. Corporate Name Requirements

“The suffix “OPC” should be indicated by the one person corporation either below or at the end of its corporate name.”

Section 4. Single Stockholder as Director and Officer

A single stockholder shall be the sole director and president of the OPC.

As the term of existence of an OPC is perpetual, an OPC will undoubtedly surpass the lifespan of the incorporator. Continuity should not be a cause of concern as the SEC Circular has already provided safeguards.

Section 5: Single Stockholders Required to Designate Nominee and Alternate Nominee

A single stockholder is required to designate a nominee and an alternate nominee named in the Articles of Incorporation who shall replace the single stockholder in the event of the latter’s death and/or incapacity. The written consent of both the nominee and alternate nominee shall be attached to the application for incorporation.

If you wish to discuss/share your proposal with us, please do not hesitate to leave your enquiry at contact@orbis-alliance.com. We will get back to you very shortly.