THE Securities and Exchange Commission (SEC) recently approved the registration of the first one person corporation (OPC) organized under Republic Act 11232, or the Revised Corporation Code of the Philippines.
Smart Transportation and Solutions received its certificate of incorporation on May 7, becoming the country’s first corporation with a single stockholder. It was organized primarily to establish, operate and manage transportation services, including vehicle rental/leasing, taxi or shuttle services, and transportation of goods or persons for any person.
“I had wanted to start a one-person corporation since I read about the initiative of the SEC to introduce such business structure in the Philippines,” said Arnulfo Divina, who also registered an OPC offering business consultancy or management services.
“With the provision on one person corporations, putting up a business has become easier. Entrepreneurs like me would not have to convince four other people to contribute or serve as incorporators, as previously required. It also allows for faster decision-making and affords greater protection to entrepreneurs.”
Under the Revised Corporation Code, a natural person, trust or estate may establish an OPC. A foreign natural person may put up such corporation, subject to the applicable constitutional and statutory restrictions on foreign participation in certain investment areas or activities.
Banks, non-bank financial institutions, quasi-banks, preneed, trust and insurance companies, public and publicly listed companies, and non-chartered government-owned and/or -controlled corporations cannot incorporate as an OPC. A natural person licensed to exercise a profession may also not organize an OPC for the purpose of exercising such profession unless provided under special laws.
“The successful incorporation of Smart Transportation and Solutions illustrates how the progressive provisions of the Revised Corporation Code could improve ease of doing business in the country and, thereby, encourage the formation of new businesses,” SEC Chairman Emilio B. Aquino said.
Under the old corporation code, a minimum of five incorporators are required to start a corporation. In many cases, one of the incorporators invests 99 percent of the capital while the rest only subscribe to a share each for compliance. Alternatively, an entrepreneur would settle for a sole proprietorship and forgo the benefit of limited liability that a corporation enjoys.
Prior to the Revised Corporation Code, the SEC also required incorporators, when applicable, to seek endorsement from other government agencies, such as the Land Transportation Franchising and Regulatory Board in the case of a transport business.
The Commission is banking on the progressive provisions of the Revised Corporation Code to unlock the potential of more than a million inactive corporations and partnerships registered with the SEC, along with the 2.5 million active business names registered with the Department of Trade and Industry.
The SEC started accepting applications for registration of OPCs on May 6, following the approval of the guidelines through Memorandum Circular 7, Series of 2019, on April 25.
Initially, applications must be filed manually with the SEC Company Registration and Monitoring Department (CRMD) at the ground floor of the Secretariat Building in the Philippine International Convention Center in Pasay City, Metro Manila. (PR)