How to Register a Corporation with SEC Philippines (Stock Corporation)

Feb 2, 2011 by at Business, Business Startup, Incorporation, Registration

How to Register a Corporation with SEC Philippines (Stock Corporation)

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).

 

Basic Requirements

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).

 

Additional Requirements

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.

Victorino Abrugar is a retired CPA practitioner, a blogger, speaker, and an entrepreneur. He's the CEO of Optixor, Inc., a digital marketing company based in the Philippines. Follow him on Twitter at @viclogic.

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29 Comments

  1. Julius Bernabe

    Hi Sir Vic,

    Just wanna ask for penalty for Non Filing of Audited FS and G.I.S. (our office is only representative office)

    Thanks in advanced and more power

  2. JOJO ORTEGA

    hi!

    I would like to inquire on how to incorporate a REALTY COMPANY. The subscribers have real properties in their own names which they plan to invest in a new realty company they will put up in exchange for shares of stock.

    My questions are as follows:
    1. is it possible that the 25% paid-up capital in a proposed new company is partly CASH and partly REAL PROPERTY?

    2. are these real properties invested in a new company as paid up capital subject to CAPITAL GAIN TAX?

    3. what are the things that we should know in putting up real properties in a company in exchange for a capital stock?

    We hope you can enlighten us on this matter?

    Thanks

    • Hi Jojo! Please find hereunder my view on your concerns.

      1. is it possible that the 25% paid-up capital in a proposed new company is partly CASH and partly REAL PROPERTY?

      Ans. Yes, it is possible because property is allowed as a consideration for the issuance of shares of stocks.

      2. are these real properties invested in a new company as paid up capital subject to CAPITAL GAIN TAX?

      Ans. Yes they are subject to capital gains tax (CGT) as a regular sale with shares as consideration. Alternatively, you may opt to undergo the tax-free transfer such property to legally minimize taxes on the transfer of such property.

      3. what are the things that we should know in putting up real properties in a company in exchange for a capital stock?

      Ans. In addition to the above, the following maybe material:
      a. Certificate Authorizing Registration (CAR) for the property after he transfer;
      b. At least 60% Filipino equity;
      c. Fair market values of such properties;
      d. Taxes on the shares and real properties; and,
      e. More…

      Hope the above helps.

      • Vic

        @ Jojo

        If subscription is paid through real properties (Land and/ Building/Condominium Unit), the following are the documents that may be submitted to SEC:

        -Detailed schedule of the property showing its registered owner, location, area, TCT No., tax declaration number and the basis of the transfer value (market value/assessed value/ zonal value or appraised value )

        -Copy of TCT/CCT and tax declaration sheet, certified by the Register of Deeds and the Assessor’s Office, respectively

        -If transfer value is based on zonal value: Latest zonal valuation certified by the Bureau of Internal Revenue (BIR)

        -If transfer value is based on appraised value: Appraisal report by a licensed real estate appraiser (not more than six [6] months old)

        -Deed of assignment with primary entry by the Register of Deeds

        -If property is mortgaged: Mortgagee/creditor’s certification on the outstanding loan balance and his consent to the transfer of property

        -For assignment of a building where the assignor is not the owner of the land: Lease contract on the land and consent of the land owner to the transfer

        -Affidavit of the transferor that the building/condominium unit is existing and in good condition

        -Affidavit of undertaking by any incorporator or director to submit the proof of transfer of the property within the prescribed period

      • JOJO ORTEGA

        Ghar,

        Many thanks for your advice.

        But I just want to be enlightened more of that so-called “tax-free transfer” of property in exchange for shares of stock, in order to minimize taxes. What are the mechanics involved, especially if it is intended as paid up capital for a proposed new corporation? Should we need clearance from BIR before filing the incorporation papers with SEC?

        The proposed new corporation is a family-owned realty entity. If some of the properties are already in the names of the children, and some in the names of the father, and these said children had executed a “Waiver of Ownership” in favor of the father, are these waivers valid for purposes of exchange of property for shares of stock in a new corporation to be set up?

        If the waivers if not valid, what should be the proper document we have to prepare to legalize the transfer of ownership of property from the children to the proposed new corporation? How about those children who have no property in their names? Can they still get equal shares together with the other favored children in a new corporation?

        The above query is a hard stuff to us. May you enlighten us again on how to proceed on this matter.

        Thank you Ghar.

        • Hi Jojo. Your oncerns below is very common to family corporations in relation to estate planning. There could be many ways to implement your objective to distribute and assign proportionate shares to te children while safeguarding the ownership interest of the parents. We could sit down with you to discuss more on your concerns. Please contact us for related concerns. Thanks

  3. Doroteo A. Navea

    To whom it may concern:

    Please kindly resolved my problem about my business name ” DORWIL BUILDERS CO.” which is already have an article of dissolution applied last 2006 and yet was found already dissolved from sec registration on that year but now was found appearing back in sec registration and It so sad I can never renew my business name “DORWIL BUILDERS” as sole proprietor in DTI this year.

    I hope for your immediate action regarding this matter.

    Thank you very much…..

  4. bona

    hi! i would like to ask about putting up a business with a foreigner. i have a friend and we might use my name in order to operate. is it possible that i would just contribute less and my service? we are thinking about importing gadgets’ parts and we would be like the distributors… what should i do? im a first timer and i dont know a lot about legal matters.. please help.. thank you in advance..^^ i badly need help…

    • Hi Bona,

      I suggest you Incorporate your Business giving at most 40% share to the foreigner and at least 60% for you. To minimize the business risk considering you’ll have to go through importation and remittances.

  5. carla

    Hi, how does an individual earn in a corporation — say, my sole prop business converted to Corporation.

    I know through stocks but how? Are the stocks paid monthly to stockholders? how do we ‘withdraw’ funds for other use (i.e. personal or otherwise) which is easier in a sole prop business.

    Thanks for your help.

    • ian

      Shareholders earn from a corporation earning profits, which increases stock value, or through dividends that are distributed to stockholders by a business when it earns profits.

  6. carla

    Sorry, one more, can a husband and wife be both incorporators / stockholders in the same corp business?

  7. Ranex

    I want to solicit idea how to register a hospital name to the SEC? SEC requires endorsement from DOH while DOH requires name of the hospital approved by SEC.

    • Hmmm. That’s confusing. Maybe what the DOH means is that you obtain a reserved name from SEC that is approved as available. You can go to SEC and reserve an available name for your corporation. You may also inquire further details at the commission.

  8. sharlynne malate

    Good day!

    Hi, I some questions regarding registering a business with SEC. We are planning to open a business to be registered in SEC, I would to ask if the investment capital is always 1M? As reflected in the requirements for non-stock corporation. I dont really understand the paid-up capital for the stock corporation. The business that we plan to register is a lending business. I like to know if there’s a lower investment capital than 1M, or if there’s any possiblity to register a business with SEC with lower investment capital of 1M? I hope you can help me.

    Thanks’

  9. Riza S. Alon

    Good Day Sir / Madam,

    Would you kindly educate me regarding SEC!? My parent is in transportation business
    and is interested to register her 2 unit of buses, would that be possible?

    • Mrs Virginia O. Javier

      I have a problem regarding the name of our school. I registered it as Good Shepherd Developmental School. I am still using its former name Good Shepherd School (the name before it was registered). I would like to use its registered name as the name of the corporation, but I would like to use Good Shepherd School as its trade name. What will I do?

  10. dhebie

    hi sir,

    can u help what is the first process for corporation and requirements that i need.

    thanks,
    dhebs

  11. Jean

    Hi i just wanna ask hmm…. What is the effect if the corporation failed to file its by-laws within one month after filing of the articles of incorporation as required by law?
    thank you

  12. Francis Chan

    Vic,
    On the Additional requirements on Business Name registration, what is the basis of that “endorsement/clearance from any government agencies”? I mean, is it a republic act, A.O., D.O., D.M., etc. thanks Francis

    • I assume what you mean is a certificate/license from other government agencies which are required by special laws. For example, pawnshops, lending companies, and other financing companies need to obtain registration from the BSP.

  13. marc

    can anyone help me register an importing/trading company?

    how much is the minimum authorized capital stock for a business with importing of general construction and building merchandise? will it be possible for me to import other goods not related to construction? like garments textiles

    thanks guys!

  14. Alex

    Darling, boss!

    I plan to open the Internet of a casino (E-casino/online casino) on Philippines.
    I will need your help on registration of all formalities. Report the price of your services.
    Clients of a casino will be from other countries. The Internet of a casino will work for 100 % outside of Philippines.
    What known banks which are on Philippines, work about casino online?
    Banks should represent – special service of bank for business casino online: “pay2pay” it means input of money from a bank card into the account of a casino and a conclusion to the card in case of a prize .

    Yours faithfully, Alex

  15. Hi ,I need your help po,our professor is asking forthis.
    Show by way of the example steps in computing the amount of
    filing of a stock corporation.

    Thanks

  16. William

    Hi Sir, do I need to register a fish pond business in BFAR? If so, how much is the fee? Thanks po Sir! :)

  17. Laarni

    What it is really? I’m very confused with the law in the Philippines pertaining to owning a real property in the Philippines?

    How come it is written everywhere that in a condominium, not more that 40% interest must be sold to foreigners, for example 100 units, 40 can be foreign owners & 60% Filipino. But when I make some research, most of the owners in the condo units are owned by foreigners, in short, they have a greater % in the total interests in the whole project? What does this mean? Let’s say a developer, a corporation who originally owns the land (with 60/40 foreign equity) is only responsible for construction and development alone, then in the master deed, land title will be transferred to “condominium corporation” if the foreign % interest is higher than the Filipino owners, how does the Philippine law reacts to this?

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