The One Person Corporation (OPC) is a progressive corporate structure in the Philippines designed specifically for individual entrepreneurs seeking the benefits of a corporation with the simplicity of sole proprietorship. This business entity allows a single stockholder to form a corporation, combining limited liability protection with streamlined management and fewer corporate formalities. For many small business owners, freelancers, and professionals, the OPC represents a flexible and efficient vehicle for growing their enterprise while minimizing risks.
This article offers a detailed, practical guide on what the OPC is, its unique advantages, recent regulatory updates, and a step-by-step approach to registering an OPC in the Philippines. It aims to empower entrepreneurs to make informed decisions with a clear understanding of the registration process and compliance expectations.
Understanding the One Person Corporation: Definition and Features
Introduced under the Revised Corporation Code of the Philippines (Republic Act No. 11232) effective 2019, the OPC allows a single incorporator to establish a corporation, which was previously impossible under the traditional law that required at least five incorporators.
Key characteristics of an OPC include:
- Single Stockholder Ownership: The corporation is solely owned by one individual, trust, or estate, who serves as the president and sole director.
- Separate Legal Entity: The OPC exists separately from its owner, protecting personal assets against business liabilities.
- Perpetual Existence: The company continues to operate beyond changes in ownership or the death/incapacity of the sole stockholder, subject to nominee arrangements.
- No Minimum Capital Mandate: Unlike other corporations, OPCs typically have no minimum paid-up capital except those engaged in regulated industries requiring compliance.
- Nominee and Alternate Nominee: The sole shareholder must designate a nominee who will assume ownership if the stockholder becomes incapacitated or deceased, ensuring business continuity.
Why Choose an OPC? Advantages Over Other Business Forms
The OPC offers several advantages, making it an attractive choice for entrepreneurs and professionals who want legal protection and corporate formality without complicating management:
- Limited Liability Protection: The OPC limits the owner’s liability to the company’s assets, safeguarding personal wealth from business debts, lawsuits, or obligations. This “corporate veil” is one of the most important protections unavailable to sole proprietors.
- Simplified Governance: With only one stockholder, there is no need for a board of directors or multiple shareholders. The sole owner can make decisions quickly, hold meetings alone, and avoid the bureaucratic requirements tied to traditional corporations.
- Business Continuity: Through the nominee provision, the OPC can continue operations smoothly if the sole stockholder is incapacitated or passes away, unlike a sole proprietorship, which may dissolve.
- Flexibility and Control: The single stockholder enjoys full control over the company without needing approval from other shareholders or directors, suitable for entrepreneurs who want decisiveness and autonomy.
- No Minimum Capital Requirement: For most sectors, OPCs do not require minimum capital, lowering barriers to corporate registration.
- Foreign Investor Inclusion: Foreign nationals can establish OPCs in permitted industries, subject to foreign investment rules, and may need to comply with paid-in capital requirements (USD 200,000 generally).
Regulatory and Operational Considerations for OPCs
While OPCs simplify incorporation, entrepreneurs should carefully consider compliance and limitations:
- Mandatory Officer Appointments: Within 15 calendar days post-registration, the sole stockholder must appoint corporate officers, including a corporate secretary and treasurer, who must meet residency and citizenship criteria.
- Tax Treatment: OPCs are taxed as corporations at standard rates (currently 25-30%). This arrangement differs from sole proprietorships that may enjoy preferential tax schemes.
- Industry Restrictions: Certain sectors, such as banking, insurance, non-chartered government corporations, and professional services requiring licenses, cannot form an OPC.
- Reporting Compliance: Annual General Information Sheets, financial statement submissions, and tax filings remain obligatory.
- Use of a Nominee: Required to name a nominee and an alternate nominee for continuity. This is a key feature unique to OPCs and critical to maintain uninterrupted business.
Step-by-Step Guide to Registering a One Person Corporation in the Philippines
- Choose and Reserve a Company Name
Begin by verifying the uniqueness and availability of your proposed company name via the Securities and Exchange Commission’s (SEC) eSPARC system or in person at the SEC. Name reservations cost ₱100 per name and are valid for 30 days.
- Prepare Incorporation Documents
You need to prepare and notarize the following essential documents:
- Articles of Incorporation (using the prescribed SEC form), signed by the sole incorporator.
- Nominee and Alternate Nominee Letter of Consent, duly notarized.
- Cover Letter addressed to the SEC.
- For foreign incorporators, submit a Foreign Investments Act (FIA) Application if applicable.
- Attach proof of authority if incorporating on behalf of a trust or estate.
- Submit Documents for Preprocessing
File all prepared documents online through the SEC’s eSPARC facility or manually at the SEC office for pre-evaluation.
- Pay Filing and Other Registration Fees
Pay the required SEC fees, which typically include:
- Name Reservation Fee – ₱100
- Filing Fee – 0.5% of the authorized capital stock (with a minimum fee of ₱2,000)
- Legal Research Fee – 1% of filing fee
- Documentary Stamp Tax – ₱30
- FIA Registration Fee – ₱3,000 (for foreign incorporators)
- Submit Hard Copies
After initial approval, submit signed, notarized hard copies of your documents along with proof of payment to finalize the registration process.
- Receive Certificate of Registration
Once approved, the SEC issues a Certificate of Registration, confirming the legal existence of your OPC.
- Post-Registration: Appoint Corporate Officers
The lone stockholder must appoint the corporate secretary, treasurer, and other necessary officers within 15 days and notify the SEC within 5 days of these appointments.
- Secure Other Registrations
Register your OPC with other government agencies:
- Obtain a Business Permit from your local government unit.
- Register with the Bureau of Internal Revenue for issuance of Tax Identification Number (TIN) and other tax-related requirements.
Converting a Sole Proprietorship to a One Person Corporation
Entrepreneurs currently operating under a sole proprietorship may choose to convert to an OPC for increased flexibility and protection. The process involves:
- Name reservation for the new corporation.
- Preparation and filing of incorporation documents as above.
- Deregistration or cessation of the sole proprietorship with the BIR.
- Registration of a new Certificate of Registration for the OPC with the BIR and the local government.
Final Thoughts
The One Person Corporation is a compelling option for Philippine entrepreneurs who want the benefits of a corporate structure without the complexity of multiple shareholders and directors. Its key advantages—limited liability, perpetual existence, simplified governance, and flexibility—make it suitable for small business owners, freelancers, and startups looking to establish a credible presence with legal protection.
While the registration process is simplified compared to traditional corporations, compliance with SEC and tax regulations remains essential. Engaging expert service providers familiar with the mechanics of OPC incorporation can significantly reduce the administrative burden and avoid costly errors.
Is Assistance Available?
BusinessRegistrationPhilippines.com offers specialized consulting and full-service support for OPC registration and compliance. Our team will guide you through every step: document preparation, SEC submission, fee payment, and post-registration compliance. By entrusting us with your registration, you save time and ensure your OPC is set up correctly from the start. For tailored assistance, contact BusinessRegistrationPhilippines.com:
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