In the Philippines, the common types of business according to ownership structure are sole proprietorship, partnership, and corporation. You may read our post about the different types of businesses in the Philippines here. If this is your first time to start a corporation, you can also read our post about the pros and cons of forming a corporation to think about it.
Philippine corporations are governed by the Corporation Code of the Philippines through the Securities and Exchange Commission (SEC) – the commission responsible for registration, regulation, investigation, and supervision of corporations in the country. Thus, you have to secure a certificate of registration and incorporation from SEC to incorporate your business. SEC requires the following basic requirements:
1. Name Verification Slip (secure online or from SEC Name Verification Unit)
2. Articles of Incorporation and By-laws
3. Treasurer’s Affidavit
4. Affidavit of incorporator or director undertaking to change corporate name (not required if Articles of Incorporation has provision on this commitment)
Please read our post titled “how to register a stock corporation with SEC” to learn more detailed information and instructions on incorporating a business. Take note that for special types of corporations, the SEC will ask additional requirements, such as endorsement from BSP for banking, pawnshops, and other financial intermediaries with quasi-banking functions.
To incorporate your business, you need to prepare for the costs of SEC filing and processing fees, the paid-up capital you need to deposit in your chosen bank, the documentary stamp tax you need to pay to the BIR on the issuance of original shares of stock, notarial costs, and professional fees if you will hire a corporate lawyer or other professionals to assist you in the incorporation process.
After all the processes with the SEC, the commission will issue a certificate of incorporation and registration for your business. However, this is only the first step in registering your corporate business in the Philippines. After SEC, you still need to comply with the registration requirements of BIR, local government unit (City or municipality), SSS, PhilHealth, Pag-ibig Fund, and other government agencies. To learn more, you may read our article on “how to register a business in the Philippines”.