Guidelines on the Establishment of a One Person Corporation (OPC) - Securities and Exchange Commission

The Securities and Exchange Commission has finally issued the guidelines on the establishment of a "One Person Corporation" (OPC) pursuant to the Republic Act No. 11232, otherwise known as the Revised Corporation Code of the Philippines, through SEC Memorandum Circular No. 7, series of 2019.

The following guidelines, rules and regulations in the establishment of a One Person Corporation (OPC) are hereby adopted:

Section 1. Definition

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.

Section 2. Term of Existence

The term of existence of the OPC shall be perpetual. However, in case of the trust or estate, its term of existence shall be co-terminous with the existence of the trust or estate. The OPC under the name of the estate may be dissolved upon proof of Partition, such as Order of Partition issued by the Court in case of Judicial Settlement, and Deed of Extra-Judicial Settlement in case of summary settlement of the estate. The OPC under  the  name  of the Trustee may be dissolved  upon  proof of termination  of the trust.

Section 3. Corporate Name

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

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

Section 5. Designation of Nominee and Alternate Nominee

The 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.

Section 6. Only Articles of Incorporation Needed

The OPC shall file its Articles of Incorporation  (AI) in accordance  with the requirements of Section 14 of the Revised Corporation Code of the Philippines. The AI must set forth  its primary  purpose,  principal office address, term of existence,  names  and  details  of the single  stockholder,  the  nominee  and alternate nominee  and  the authorized, subscribed and  paid-up  capital and such other  matters consistent with law and which may be deemed  necessary and convenient.

Section 7. By-Laws

The OPC is not required  to submit and file its Bylaws.

Section 8. Minimum  Capital Stock  Not Required

The OPC is not required to have a minimum authorized  capital stock except as otherwise provided by special law. Further,  unless  otherwise required   by applicable  laws  or  regulations,  no portion of the authorized  capital is required to be paid-up at the time of incorporation.

Section 9. Officers

Within fifteen (15) days From the issuance of its Certificate of Incorporation, the OPC shall appoint a Treasurer, Corporate Secretary, and other officers and notify the SEC thereof  within five (5)  days from appointment using the Appointment Form as may be prescribed by the SEC. The single stockholder shall not be appointed as Corporate Secretary but may assume the role of a Treasurer.

Section 10. Bond Requirement for the Self-Appointed Treasurer

The single stockholder who assumes the position of the Treasurer shall post a surety  bond to be computed based on the authorized capital stock (ACS) of the OPC as shown in the Table below:

ACS	Surety Bond Coverage*
1.00 to 1,000,000.00	1,000,000.00
1,000,001.00 to 2.000.000.00	2,000,000.00
2,000,001.00 to 3,000,000.00	3,000,000.00
3,000,001.00 to 4,000,000.00	4,000,000.00
4,000,001.00 to 5,000,000.00	5,000,000.00
P 5,000,001.00 and above = Amount of surety bond coverage shall be equal to the OPC's ACS

* subject to renewal every two (2) years or as may be required, upon review of the annual submission of the Audited Financial Statements/Financial Statements certified under oath by the company's President and Treasurer.

* The bond is a continuing requirement for so long as the single stockholder is the self-appointed Treasurer of the OPC.

* The bond may be cancelled upon proof of appointment of another person as the Treasurer and Filing of Amended Form for Appointment of Officers.

Section 11. Change of Nominee or Alternate Nominee

The single stockholder may, at any time, change its nominee and alternate nominee by submitting to the Commission the names of the new nominees and their corresponding  written  consent.  The Articles of Incorporation need not be amended.

Section 12. Incapacity or Death of the Single Stockholder

In case the single stockholder becomes incapacitated, the nominee can take over the management of the OPC as director and president. At the end of the incapacity, the single stockholder can resume the management of the OPC. In case of death or permanent incapacity of the single stockholder, the nominee will take over the management of the OPC until the legal heirs of the single stockholder have been lawfully determined and the heirs have agreed among themselves who will take the place of the deceased.

Section 13. Reportorial Requirements

The OPC must submit the following documents within the period required by the SEC:

a)  annual audited  financial statements within 120 days from the end of its fiscal year as indicated in its Articles of Incorporation; Provided, that if the total assets or total liabilities of the corporation  are less than six hundred thousand  pesos (P600,000.00). the financial statements shall be certified under oath by the corporation's treasurer;

b) a report  on all explanations or comments  by the president  on the qualification, reservation or adverse  remarks  made by the auditor  in the financial statements;

c)  a disclosure of all self-dealings and related party transactions entered into between the OPC and the single stockholder; and

d) other reports as the SEC may require. 

Section 14.  Who are  Not Allowed to Form OPCs

Banks, non-bank financial institutions, quasi-banks, pre-need, trust, insurance, public and publicly listed companies, non-chartered government-owned and controlled  corporations (GOCCs) cannot incorporate as 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.

Section 15. Foreign National

A foreign natural person may put up an OPC, subject to the applicable capital requirement and  constitutional  and statutory restrictions on foreign participation in certain investment areas or activities.