Company formation in the Philippines (One Person Corporation)

In other jurisdictions, a single individual could establish a corporation but in the Philippines, this was only allowed in 2019 when the Corporation Code was repealed by RA No. 11232. Under the previous Code, a minimum of five incorporators were needed to form a corporation. Hence, an investor had to find other investors to join the corporation or resort to using dummy stockholders.

Essentially, an OPC grants the stockholder full control over his corporation, but limits his liability just like any stockholder of a corporation.  This is different from a single proprietorship where all of the assets of the proprietor is liable for the obligations of the business.  Also, it is taxed just like any ordinary corporation. No minimum authorized capital stock is required generally, unless required by law.  Also, there is no need to open an ITF account to deposit the paid-up capital.  This vehicle is certainly useful for foreigners who want to do business in the Philippines (in areas where foreign investment is allowed) without the need to engage other personalities into the corporation.

Should there be a need to scale up, there is no need to close the OPC, as it can be converted into a domestic corporation. It is well to form an OPC if you engage in business, as there are tax benefits that can be derived from it.  A corporation is not only a tool for the rich.  With it, you can get rich.

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