Corporations are ideal for business owners aiming to scale and attract investors while shielding themselves from personal liability. However, learning how to register a corporation in the Philippines is far more complex than for other business structures, like sole proprietorships and partnerships. We’ll explain everything you need to know about registering a corporation to help make this process easy to understand.
What is a Corporation
A corporation is a legal entity separate from its owners. Governed by the SEC under the Revised Corporation Code of 2019, it can own assets, incur liabilities, and enter contracts independently of its shareholders. Its primary advantage is limited liability, meaning shareholders’ personal assets are protected, and their financial risk is restricted to just their investment. Corporations are often seen as more credible can raise capital by issuing shares, attracting investors to fuel expansion.
Step 1: Choose a Unique Business Name
Choose a name and use the SEC’s online Company Name Verification System to check if it’s available. Keep in mind the following:
- Select a distinct name that includes “Corporation,” “Corp.,” or “Incorporated.”
- Don’t use terms implying government affiliation without approval
- Avoid terms implying restricted industries without approval
Reserve your name via the eSPARC portal, valid for 30 days. This process typically takes 1–3 days.
Step 2: Prepare Required Documents
Gather these key documents for your business’s SEC registration:
- Articles of Incorporation: Outlines the corporation’s purpose, structure, and capital stock, signed by at least five incorporators, each holding one share (2–5 days).
- Bylaws: Defines internal governance, such as board and officer roles (2–4 days).
- Treasurer’s Affidavit: Certifies that 25% of authorized capital is subscribed and 25% of that is paid (1–2 days).
- Name Reservation Certificate: Proof of approved name (1–3 days).
- Bank Certificate: Verifies paid-in capital deposit (2–5 days).
- Other Requirements: You’ll need other documents depending on your type of corporation. You can find a list on the SEC’s primary registration page.
Foreign investors may need additional documents, like a Certificate of Inward Remittance. Errors in these documents can lead to resubmission, extra fees, and delays of 1–2 weeks, so consider hiring a professional business registration service to ensure accuracy.
Step 3: Define Corporate Structure
A corporation requires 5–15 incorporators (shareholders, natural persons). Domestic corporations need at least 60% Filipino ownership, though some sectors allow full foreign ownership. Appoint a board of directors (minimum five) and officers, including a president, treasurer, and a Filipino citizen/resident corporate secretary.
This step takes 2-5 days, depending on the incorporators’ coordination.
Step 4: File with the SEC
Submit documents via the eSPARC Portal or in person at an SEC office. Filing fees, based on authorized capital stock, plus a legal research fee. SEC approval, typically taking 3–7 days, results in a Certificate of Incorporation. The entire process, including document preparation, takes about 2–3 weeks, though errors may extend depending on document errors and the length of evaluation.
Step 5: Secure Post-Registration Permits
Obtain these licenses and permits:
- Barangay Clearance: From the local barangay. Typically takes 1-3 days to and the following documents.
- DTI or SEC registration certificate
- Proof of address (e.g., lease contract)
- Completed application form
- Pay a small fee (varies based on your location)
- Mayor’s Permit (also called Business Permit): Issued by the local government unit’s Business Permits and Licensing Office. Processing time is normally 1-2 weeks. Submit the following.
- DTI or SEC registration
- Barangay Clearance
- Lease contract or proof of office ownership
- Community Tax Certificate (Cedula), available from the barangay or municipal hall
- Additional permits (e.g., Sanitary Permit, Fire Safety Inspection Certificate) for commercial offices
- Fees: Depends on location.
The Mayor’s Permit ensures compliance and boosts credibility with clients and developers.
- BIR Registration: Secure a Tax Identification Number and register books of accounts. This usually takes 3-7 days.
- DTI or SEC registration certificate
- Mayor’s Permit (Business Permit)
- Lease contract or proof of office address
- Valid ID
- Pay a small fee plus costs for official receipts and books of accounts
- SSS, PhilHealth, Pag-IBIG: Register as an employer if you have employees (3–5 days). Check the respective government agency’s website or office for the requirements.
- Other Licenses and Permits: Obtain other permits that you may require for your industry and business operations. Check the respective government agency’s website or office for the requirements. Consult a business registration service to ensure complete compliance.
Step 6: Open a Corporate Bank Account
With your SEC Certificate and permits, open a corporate bank account to deposit paid-in capital. Banks require the Articles of Incorporation, Bylaws, and SEC registration proof. This takes 2–5 days.
A professional business registration service can help you pick a bank with favorable deals for corporate bank accounts.
Summary
Corporations have several advantages that make them a lucrative option for aspiring entrepreneurs. However, the process of registering a corporation in the Philippines can be overwhelming. From document preparation to SEC approval and securing post-registration permits, the process typically around a month, but can be longer if there are errors in your submission. To avoid costly delays and penalties, it’s highly recommended to seek assistance from a professional business registration service.
First Time Registering a Business? Here’s Where to Find Help
Registering a business in the Philippines can be a complex and challenging process. With numerous permits and licenses required by the government, it’s easy to miss a document or forget to renew it. Unfortunately, this can lead to costly fines or even force your operations to shut down.
Thankfully, the Business Registration Philippines team provides comprehensive support for your business registration, so you don’t have to stress over the paperwork.
We’ll handle the permits and renewals so you can focus on what matters most—running your business and achieving financial success.
Contact us today to schedule an initial consultation with one of our experts:
- Contact Us Here
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- Call us at +63 (02) 8540-9623