Corporate
Rule on Incorporators Made More Flexible under the Revised Corporation Code
The SEC has slowly been rolling out its guidelines in implementing the reforms introduced by the Revised Corporation Code (R. A. No. 11232), and one of the latest guidelines is SEC Memorandum Circular No. 16 (Series of 2019) issued on 30 July 2019.
Incorporators are those stockholders who originally form a corporation, and whose signatures appear in the Articles of Incorporation. Each incorporator must own at least 1 share of the capital stock.
In an effort to make forming domestic corporations more flexible for investors, the limitations on the number and qualifications of incorporators have been relaxed under the new law. To implement this change, the new SEC Memo Circular issued the Guidelines on the Number and Qualifications of Incorporators.
HOW MANY?
The minimum number of incorporators has been cut down from 5 to 2. The maximum number is still 15. Only a One Person Corporation (OPC) may have a single stockholder and a sole director.
WHO?
Now, any person, partnership, association or corporation may form a corporation, lifting the restriction under the old law which allowed only natural persons to be an incorporator. The incorporators may be composed of any combination of the following, subject to the submission of the appropriate requirements:
INCORPORATOR | SEC DOCUMENTARY REQUIREMENT |
Natural persons | None |
SEC-registered partnership | Partners’ Affidavit |
SEC-registered domestic corporation or association | Directors’ Certificate |
Foreign corporation | Board Resolution or Directors’/Secretary’s Certificate or its equivalent authorizing the investment and designating the signatory, with an apostille affixed thereto or authenticated by a Philippine Consulate, if applicable |
The Taxpayer Identification Number (TIN) of the principal and signatory (or passport number in case of foreign investors) must be indicated in the Articles of Incorporation. After incorporation, all foreign investors, natural or juridical, must secure a TIN, which must be indicated in the General Information Sheet filed with the SEC.
The inclusion of foreign incorporators shall remain subject to the applicable constitutional, statutory and regulatory restrictions.
Investors looking into forming a new corporation in the Philippines are thus best advised to consider this new change when planning their corporate structure.
Click here to read the entire text of SEC MC No. 16 series of 2019.
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