A corporation can be a stock or a non-stock corporation. As their names suggest, stock corporations issue shares of stock, while non-stock corporations don’t. A stock corporation is a for-profit corporation which the ownership of the corporation is expressed by shares of stock. The owner of the shares of a corporation is called stockholder or shareholder. Now, if you’re on your way to incorporate your business as a stock corporation, the following are steps and guides on how to register it with the Philippines Securities and Exchange Commission (SEC).
1. Name Verification Slip (secure online or from SEC Name Verification Unit)
You can visit the SEC i-Register, the web-based Company Registration System of Philippines SEC, to verify and register online. SEC i-Register is a quick, affordable, and user friendly service that is available to the public 24 hours a day, 7 days a week. To use their online services, you need to sign-up to create an account. Once you’ve created an account, you can already verify and reserve your proposed company name and file application for company registration. Alternatively, you can visit the SEC Verification Unit, located at the SEC Building, EDSA, Greenhills, Mandaluyong City to secure your Name Verification Slip at the counter. If you’re residing near Cebu City, you can register your business or company at SEC Cebu located at V. Rama Avenue, Guadalupe Cebu City.
2. Articles of Incorporation and By-laws
You can ask for blank forms from the Company Registration and Monitoring Department (CRMD). For the preparation and drafting of Articles of Incorporation, By-laws and other requirements, you can consult a corporate lawyer to get assistance. If you have time and want to save from expensive professional fees, you may also draft the documents on your own, especially if you’re already familiar with them. You can just visit a lawyer for notaries.
Click here to download a sample / blank forms of Articles of Incorporation and By Laws, with a Treasurer’s Affidavit from SEC Website.
3. Treasurer’s Affidavit
The Treasurer’s Affidavit also authorizes the Securities and Exchange Commission and Bangko Sentral ng Pilipinas to examine and verify the deposited amount in the bank, which is in the name of the treasurer in trust for the corporation, representing the paid up capital of the corporation on the process. The bank certificate of deposit is one of the documents that must be submitted with the SEC. Hence, you must obtain it from the bank.
4. Affidavit of incorporator or director undertaking to change corporate name (not required if Articles of Incorporation has provision on this commitment).
1. Endorsement/clearance from the following government agencies, if applicable.
a. Civil Aeronautics Board (CAB) – for Air Transport
b. Bangko Sentral ng Pilipinas – for banking, pawnshops & other financial intermediaries with quasi-banking functions.
c. Games and Amusement Board (GAB) – for Professional boxing
d. Philippine Charity Sweeptakes Office (PCSO) – for operation of games of chance (e.g. lotto)
e. Department of Education (DepEd) – for educational institution – elementary to high school
f. Commission on Higher Education (CHED) – for educational institution – college or tertiary course
g. Technical Skills Development Authority (TESDA) – for educational institution – technical or vocational course
h. Department of Energy (DOE) – for electric power plants
i. Department of Health (DOH) – for hospitals
j. Insurance Commission (IC) – for insurance
k. Land Transportation Franchise Regulatory Board (LTFRB) – for land transport
l. Maritime Industry Authority (MARINA) – for water transport, construction and building of vessels
m. National Telecommunications Commission (NTC) – for operation of radio, television and telephone
n. Philippine Overseas Employment Administration (POEA) – for recruitment of overseas employment
2. For corporations with foreign equity: Proof of remittance by non-resident aliens and foreign corporate subscribers who want to register their investment with the Bangko Sentral ng Pilipinas (BSP)
3. For corporations with more than 40% foreign equity: SEC Form No. F- 100
4. For corporations with Philippine Economic Zone Authority (PEZA), Subic Bay Metropolitan Authority (SBMA) or other economic zones application: Certificate of Authority or endorsement from said government agencies
5. Additional requirements based on kind of payment of subscription. If paid by cash below are the additional requirements.
a. Bank Certificate of deposit of paid up capital notarized in place where signed (as stated in no.3 Treasurer’s Affidavit)
b. For corporations with foreign subscribers who want to register their investments with the BSP: Proof of inward remittance or bank certificate
If paid other than cash (i.e., properties, inventories, shares of stock, etc.,), please see the complete requirement on this link page from the Philippines SEC.
Things to remember
1. Incorporators are required to be not less than five (5) but not more than fifteen (15). Incorporators are the original stockholders included in the application for registration. Stockholders can increase after incorporation.
2. Majority of the incorporators are required to be residents of the Philippines.
3. All incorporators must be natural persons and must be of legal age. A Corporation or a partnership can become a stockholder by acquiring shares of stock after the corporation has been duly incorporated.
4. All incorporators must subscribe to at least one (1) share of stock of the corporation being organized.
5. Minimum subscription: The law requires that the total capital stock to be subscribed at the time of incorporation should at least be twenty five percent [25%] of the authorized capital stock of the corporation being organized.
6. Minimum paid-up capital: The paid-up capital of a Philippine corporation must not be less than PhP5,000.00. Thus, it is required that at least twenty five percent [25%] of the subscribed capital stock should be fully paid up but the amount of which should not be less than said PhP5,000.00. Certain types of companies, such as financing and insurance companies are required to have different minimum paid-up capital based on their industry. To see the different minimum paid-up capital requirements published by SEC please click here.
7. Don’t forget to pay the documentary stamp tax on the original issuance of shares of stock. It must be filed and paid with the Bureau of Internal Revenue (BIR) or Authorized Agent Bank (AAB). Section 174 of the National Internal Code (as amended), requires a payment at the rate of Php1 on each Php200 or a fractional part thereof of the par value of the shares of stock. Payment must be made on or before the 5th of the month following the date of issuance of the registration certificate or issuance of shares. The documentary stamp tax return or BIR form 2000 is one of the document required to be submitted with the Bureau of Internal Revenue (BIR) when you register your corporation with them.
The SEC website has published a citizen’s manual on the registration of corporation and partnerships with the SEC. The pdf file can be downloaded here, you can save it in your computer and print it for your guide.