2 Feb 18 (1)

To establish corporations and partnerships in the Philippines, investors or business-owners first need to have their business registered with the Securities and Exchange Commission (SEC).  It is one way of legitimizing your business in order for you to legally engage in trading shares of stocks and financial assets.

There are four types of corporations, as defined by the SEC that can establish a business in the Philippines.  These are:

  • Stock Corporations – those with authorized capital stock dividends into shares of stock either with or without par value.  A stock corporation is engaged in income-generating activities and is authorized to declare dividends.

Examples: Domestic Corporations, Resident Foreign Corporations (branch offices, representative offices, Regional Headquarters, Regional Operating Headquarters).

  • Non-stock Corporations – those that do not have authorized capital stock.  It is organized for charitable, religious, educational, professional, cultural, fraternal, literary, scientific, social civil service, or similar purposes, like trade, industry, agricultural, and like chambers, or any combinations thereof.

Examples: Non-governmental organizations (NGOs), Foundations, Associations, Religious Organizations.

  • Foreign Corporations – an entity formed, organized, or existing under any laws other than those of the Philippines and whose laws allow Filipino citizens and corporations to conduct business in its country or state of origin.
  • Partnership – exists when two or more individuals’ combine their capital, property, skill or labor, or all of these, for the transaction of a lawful business for gain, upon an understanding that profits or losses shall be shared or borne by them in certain proportions.

Examples: general partnership, a limited partnership.

In this blog series, we are going to share the list of requirements and a step-by-step process on how to register each type of corporation with the SEC.

Let’s start with Stock Corporations.

  1. CASH PAYMENT FOR SUBSCRIPTION

Documentary Requirements

Basic Requirements:

  • Name verification Slip (may be secured online or at SEC Name Verification Unit)
  • Articles of Incorporation (AI) and By-laws (BL)
  • Treasurer’s Affidavit
  • Joint Affidavit of two incorporators to change the corporate name (not required if already stated in AI).

Additional Requirements:

  • Endorsement/clearance from other government agencies, if applicable.
  • Clearance from other Department of the Commission
  • For Corporations with more than 40% foreign equity: Application form for registration under the Foreign Investments Act of 1991 (R.A. 7042, as amended).
  • Endorsement/clearance from: (a) Philippine Economic Zone Authority (PEZA) for an applicant under R.A. 7916, (b) Subic Bay Metropolitan Authority (SBMA) or Clark Development Corporation (CDC) for an applicant under R.A. 7227 and (c) Cagayan Economic Zone Authority (CEZA) for an applicant under R.A. 7922.

Schedule of Availability of Service

Mondays to Fridays, 8:00am to 5:00pm without noon break.

Who may avail of the service?

All applicant corporations thru their representatives.

What are the basic requirements?

  1. Cover Sheet
  2. Reservation Payment Confirmation
  3. Articles of Incorporation (AI)
  4. By-laws (BL)
  5. Treasurer’s Affidavit (for the stock)
  6. Joint Undertaking to Change Name

 How to avail of the service?

Step & Duration Applicant/Client Service Provider Fees
Step 1 – 10 minutes Verify or reserve a proposed business name. If the proposed name is allowed by the system, the reservation and confirmation notices are printed and given to the applicant. Php 100.00/reservation for 30 days.
Step 2 – 10 to 20 minutes Present Articles of Incorporation and By-Laws. Check the document presented. If complete, advise the registrant to pay the filing fee.  If not, advise the applicant to comply with the requirements. The filing fee for the stock corporation:

1/5 of 1% of the authorized capital stock but not less than P2,000.00 plus 1% of the amount as legal research fee;

The registration fee for the By-Laws of a stock corporation is P1,010.00.

Step 3 – 5 minutes Pay filing fee at the Cashier. After receipt of the application, CPRD staff generates the Certificate of Incorporation bearing applicant’s SEC registration number and Unified Registration Report (URR) None
Step 4 – 5 minutes Present Official Receipt to the Releasing Unit and get the Certificate of Incorporation. Assistant Director reviews the application and forwards it for approval of CRMD Director. None
  1. Non-cash Payment for Subscription

Documentary Requirements:

Basic Requirements:

  1. Name Verification Slip (may be secured online or at SEC Name Verification Unit)
  2. Articles of Incorporation (AI) and By-laws (BL).
  3. Treasurer’s Affidavit
  4. Joint Affidavit of two incorporators to change the corporate name (not required if already stated in AI).

Additional Requirements

  1. Endorsement/clearance from other government agencies, if applicable.
  2. Clearance from other Department of the Commission.
  3. For Corporations with more than 40% foreign equity: Application Form for registration under the Foreign Investments Act of 1991 (R.A. 7042, as amended).
  4. Endorsement/clearance from:
    • Philippine Economic Zone Authority (PEZA) for applicant under R.A. 7916
    • Subic Bay Metropolitan Authority (SBMA) or Clark Development Corporation (CDC) for applicant under R.A. 7227 and
    • Cagayan Economic Zone Authority (CEZA) for applicant under R.A. 7922.

How to avail of the service?

Step & Duration Applicant/Client Service Provider Fees
Step 1 – 10 minutes Verify or reserve the proposed name. If the proposed name is allowed by the system, the reservation and confirmation notices are printed and given to the applicant. Php 100.00 per reservation for 30 days.
Step 2 – 10 to 20 minutes Present Articles of Incorporation and By-laws at the Corporate and Partnership Registration Division. Check the document presented. If complete, advise the registrant to pay the filing fee.  If not, advise the applicant to comply with the requirements. The filing fee for a stock corporation:

1/5 of 1% of the authorized capital stock but not less than P2,000.00 plus 1% of the amount as legal research fee;

The registration fee for the By-laws of a stock corporation is P1,010.00.

Step 3 – 5 minutes Pay filing fee at the cashier and file the application at the receiving unit. After receipt of the application, CPRD staff generates the Certificate of Incorporation bearing applicant’s SEC registration number and Unified Registration Report (URR). None
Step 4 – 5 minutes Present Official Receipt to releasing unit. Assistant Director reviews the application and forwards it for approval of CRMD Director. None

Guidelines when submitting documentary requirements for registration of corporations and partnerships:

  • All applications and supporting documents must be in four (4) copies and in A4 size bond paper with a cover sheet.
  • Documents signed abroad must be authenticated by the Philippine Embassy or Consulate in the country where signed.
  • Audited Financial Statements and Special Audit Reports must be certified by an independent Certified Public Accountant (CPA), with Statement of Representation filed with the SEC. Said statement must indicate the CPA Cert. No. PRC/BOA No. and the PTR No. of the CPA and SEC accreditation of External Auditor if applicable.
  • All applications must indicate the Tax Identification Number (TIN) of the incorporators, directors/trustees, stockholders/members for corporations, and partners for partnerships.
  • Foreign investors are allowed to indicate passport number in lieu of TIN for registration of a corporation/partnership.

Tomorrow we will feature the step-by-step process for registering Non-stock corporations.

Source: www.sec.gov.ph