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What is a Corporation?
1.
A juridical person created by operation of law and registered with the Securities and
Exchange Commission.
A corporation with authorized capital stock dividend 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.
A corporation is deemed imbued with juridical personality from the time the
Certificate of Incorporation is issued by the Securities and Exchange Commission.
A. Stock Corporation
B. Non-Stock Corporation
C. Foreign Corporation
The proposed corporate or partnership name can be verified online via Iregister
system of SEC; or thru Name Verification Unit at G/F Secretariat Building, PICC
Complex, Roxas Boulevard Pasay City; or thru Satellite Offices and SEC Extension
Offices.
7. If the proposed name is verified and reserved online, does this still need confirmation
from Name Verification Unit or SEC Satellite/Extension Offices?
Company names reserved online must be confirmed at the Name Reservation Unit,
G/F Secretariat Building, PICC Complex, Roxas Boulevard Pasay City or at any of the
SEC Satellite Offices within four (4) calendar days from date of online reservation.
Non-confirmation of reservation within the specified period will forfeit the online
reservation. Confirmation is required because the Corporation Code of the
Philippines, Sec. 18 provides that No corporate name may be allowed by the
Securities and Exchange Commission if the proposed name is identical or deceptively
or confusingly similar to that of any existing corporation or to any other name
already protected by law or is patently deceptive, confusing or contrary to existing
laws. Compliance therewith compels us to personally determine if reserve names are
not deceptively or confusingly similar or patently deceptive or confusing to other
registered entities. After confirmation, applicant must secure a Reservation Payment
Confirmation. A mere Reservation Notice is not sufficient for the acceptance of any
application for registration, or change of name of a corporation or partnership. Once
the Reservation Payment Confirmation has been issued, the reservation fee must be
paid at the Cashier, SEC Main Office or at any of the designated Landbank branches.
8. If the proposed name has been allowed for use, would there be fees required to
reserve and where shall the payment be made?
Yes.To reserve a name the SEC collects P100.00 as reservation fee for thirty days. The
payment can be thru SEC Cashier or thru on collection systems of Landbank.
A. Stock Corporation
B. Non-Stock Corporation
C. Foreign Corporation
11. Is there a rule on the approval of the corporate and partnership names?
Yes. The Corporation Code of the Philippines provides in Section 18 that no corporate
name may be allowed by the SEC if the proposed name is identical or deceptively or
confusingly similar to that of any existing corporation or to any other name already
protected by law or is patently deceptive, confusing or contrary to existing laws.
12. Does SEC have guidelines on the approval of corporate and partnership names?
Are the individual persons originally forming the corporation and are the signatories
in the Articles of Incorporation.
All incorporators must be natural persons, of legal age, their number must be at least
five (5) and not more than fifteen (15), every incorporator is subscriber of at least
one share, and majority of the incorporators are residents of the Philippines.
15. Are foreigners allowed as incorporators?
Yes provided that all requirements for incorporators are complied with and provided
further that the business activity of the corporation is not fully reserved for Filipino
ownership.
Yes. Provided that all the requirements for incorporators under the Corporation Code
are complied with and this is true for registration under the Foreign Investment Act
of 1991 as amended by RA 8179.
For a stock corporation, the number of directors must be at least five (5) but not
more than fifteen (15). For a non-stock corporation, the number of trustees must be
at least five (5) and could be more than fifteen. For religious societies, the number of
trustees must be at least five (5) but not more than fifteen (15). For non-stock
educational corporation, the number of trustees must be at least five (5) but not
more than fifteen (15) and the number of trustees must be in multiples of five (5).
And, for a corporation sole, the trustee is only one (1).
21. Is there any limit on the number of seat for foreigners in the board?
Yes. If the business activity is partly nationalized, the number of seat for foreigners in
the board of directors is in proportion of their present foreign equity to the number
of directors as stated in the Articles of Incorporation. Also, the number of their seats
should not exceed the proportion of the allowable foreign equity to the number of
the directors in the AI in accordance with Anti-Dummy Law.
22. If the corporation is registered under the Foreign Investment Act, can foreigners be
all the directors?
24. Is there any requirement of the Corporation Code on primary purpose and secondary
purposes to be indicated in the Articles of Incorporation?
Yes. Under Sec. 15 of the Code it states that if there is more than one purpose,
indicate primary and secondary purpose.
None. As many secondary purposes a corporation would like to engage except if the
business activities in the primary and secondary are prohibited by existing laws to be
in the Articles of Incorporation of one and the same corporate entity.
26. What are business activities not allowed to be in the primary and secondary purposes
at the same time?
Yes. These business activities are fully reserved to Filipino citizens as follow:
a)Mass Media
b)Practice of professions
c)Retail trade enterprises with paid-up capital of less than US$2,500,000
d)Private Security Agencies
e)Small scale mining
f)Utilization of marine resources in archipelagic waters, territorial sea, and exclusive
eonomic zone as well as small-scale utilization of natural resources in rivers, lakes,
bays and lagoons
g)Ownership, operation and management of cockpits
h)Manufacture of firecrackers and other pryrotechnic devices.
28. Are there business activities wherein up to twenty five percent (25%) foreigners
ownership is allowed?
29. Are there business activities wherein up to thirty percent foreigner's ownership is
allowed?
30. Are there business activities wherein up to forty percent of foreigner's owenship is
allowed?
31. Are there business activities wherein foreigner's ownership could be more than forty
(40) percent up to one hundred percent?
Yes.
a)Export enterprises and
b)Domestic market enterprises with paid-in equity capital of at least the equivalent
of US$200,000
c)Domestic market enterprises, which involved advanced technology or employ at
least fifty direct employees with paid-in equity capital of at least the equivalent of
US$100,000
The general rule is NO. However, there are practices of professions allowed now in
corporate form as follow
a)Practice of architecture
b)Practice of interior design
c)Practice of real estate services
d)Practice of customs brokerage
Yes. Under the Corporation Code, at least 25% of the amount subscribed must be
paid-up.
Yes. Under the Corporation Code, at least 25% of the amount subscribed must be
paid-up and in no case be less than Five Thousand (P5,000.00) Pesos. The foregoing
amount however shall not apply, if there is a law, rule or regulation of other
regulatory agencies requiring a higher minimum paid-up capital.
It refers to the amount paid by subcribers over and above the par value of shares or
the issue value in no-par value shares.
Under Sec. 62 of the Corporation Code, stocks shall not be issued for a consideration
less than the par or issued price thereof. Consideration for the issuance of stock may
be any or a combination of any two or more of the following:
(1)Actual cash paid to the corporation;
(2)Property, tangible or intangible, actually received by the corporation and
necessary or convenient for its use and lawful purposes at a fair valuation equal to
the par or issued value of the stock issued;
(3)Labor performed for or services actually rendered to the corporation;
(4)Previously incurred indebtedness of the corporation;
(5)Amounts transferred from unrestricted retained earnings to stated capital; and
(6)Outstanding shares exchanged for stocks in the event of reclassification or
conversion. Where the consideration is other than actual cash, or consists of
intangible property such as patents or copyrights, the valuation thereof: shall intially
be determined by the incorporators or the board of directors, subject to the approval
by the Securities and Exchange Commission.
Any amount will suffice as a general rule. However, in the case of registration of a
"foundation", the minimum contributed capital is P1,000,000.00. The amount is
required to be deposited in the bank in the name of the treasurer-in-trust. For
registration, a bank certificate of deposit is required for the P1,000,000.00.
42. If the payment is other than cash for shares, what are the additional requirements
for each and every consideration for the issuance of shares?
1. Detailed schedule of the property showing the registered owner, location area,
TCT/CC No., tax declaration No., and the basis of transfer value (appraised/market
value/assessed value/zonal value) certified by the treasurer
2. Copy of TCT/CCT and tax declaration sheet certified by Register of Deeds and
Assessor's Office, respectively
3. Latest zonal value certfied by BIR, if transfer value is based on zonal value
5. Deed of assignment
7. For assignment of building where assignsor is nor owner of the land, submit lease
contract on land and consent of landowner to the transfer
8. Affidavit of Undertaking by an incorporator of the corporation to submit the proof
of transfer to the corporation within the prescribed period
a.Untitled Lands
1. Certification of the Barangay Chairman where the property is located, and at least
two (2) adjoinining property owners or possessors, attesting that the subject land
had been in the possessor's open, peaceful, continuous and uninterrupted exclusive
possession in the concept of an owner for at least thirty (30) years and the possessor
had been introduced improvements thereof, if any
8. Under oath undertaking of the tranferor/subscriber to answer for any liability that
the corporation might incur by virtue of the acceptance of said property as paid-up
capital
10. Blue print Survey of the Plan as approved by the Bureau of Lands
11. Detailed schedule of the property showing its registered owner, location, area,
tax declaration number and the basis of tranfers value (market value/assessed
value/zonal value or appraised value)
12. Latest zonal valuation certified by BIR, if transfer value is based on zonal value
15. Affidavit of undertaking to submit certified true copy of the original certificate of
title in the name of tranferee-corporation within one (1) year from the date of
receipt of the approval of the application
c.Inventories/Furniture/Personal Properties
1. Detailed schedule of the properties showing the description and the transfer value
certified by the treasurer
2. Deed of assignment
1. Detailed schedule of the property showing the description and transfer value
certified by the treasurer
2. Appraisal report by authorized appraiser (not more than 6 month old). If the
property is imported, valuation-report with description of the property by the
Bangko Sentral ng Pilipinas.
3. Deed of assignment
e.Shares of Stock
1. Detailed schedule of the shares of stock showing the name of stockholder, stock
certificate number, number of shares and the basis of transfer value whether market
or book value certified by the treasurer
2. Audited financial statements of the investee company as of the last fiscal year
stamped received by BIR and SEC
3. Deed of Assignment
4. Certification by the Corporate Secretary of the investee company that the shares
of stock are outstanding in the name of assignor
f.Motor Vehicle
1. Detailed schedule of the motor vehicle showing the registered owner,
make/model, plate number, chassis number, motor number, certificate of
registration number and market value certified by the treasurer
3. Appraisal report by authorized appraiser (not more than six month old)
4. Deed of assignment
g.Sea Vessel/Aircraft
5. Deed of assignment
h.Intangible
4. Deed of Assignment
4. List of creditors showing the amount due to each creditor as of date of the AFS
certified by the auditor or certified under oath by the company accountant and
written consent of creditors
7. Copy of TCT/CCT and tax declaration sheets certified by the Register of Deeds and
Assessor's Office, respectively
The shares of stock may be classified as common, founders, preferred, par or no-par
value shares, voting or non-voting shares and redeemable shares.
Common shares must always be voting shares. Common shares can be par value
shares or no-par shares.
Preferred shares must always be par value shares. Preferred shares can be voting or
non-voting shares. The preferred shareholders may be given preference in the
distribution of the assets of the corporation in case of liquidation and in distribution
of dividends, or such other preferences as may be stated in the articles of
incorporation.
Shares of capital stock issued without par value shall be deemed fully paid and non-
assessable and the holder of such shares shall not be liable to the corporation or to
its creditors in respect thereto. Shares without par value may not be issued for a
consideration less than the value of Five (5.00) pesos per share. The entire
consideration received by the corporation for its no-par value shares shall not be
available for distribution as dividends.
49. Are there corporate entities not allowed to issue no-par value shares?
Yes. They are banks, trust companies, insurance companies, public utilities, and
building and loan associations.
Yes. The registration will be under the Foreign Investment Act of 1991 (FIA), as
amended by R.A. 8179. The Foreign Investment Negative List will serve as guide to
allow registration. The corporation may be registered as export or as domestic
market enterprise.
The term "domestic market enterprise" shall mean an enterprise, which produces
goods for sale, or renders services to the domestic market entirely or if exporting
portion of its output fails to consistency export at least sixty percent (60%) thereof.
The annual meeting date should be a specific date (i.e. January 28).