We provide end to end business registration for companies trying to set up a company in the Philippines.
What is a Corporation?
- A corporation is a legal entity that is separate and distinct from its owner or incorporators.
- It has legal rights and obligations similar to an individual.
- It can enter into contracts, loan, hire employees, pay taxes, etc.
- It is formed by at least two (2) individual called incorporators.
- The ownership of a corporation is divided into shares of stock.
- A corporation issues the stock to individuals or other businesses, who then become owners or stockholders, of the corporation.
Advantages of a Corporation
- The risk and liability is limited only to the corporation. Owners are not personally liable.
- It is easy to increase capital through issuance of stocks to investors
- It can be pass on to different owners
- It can exist indefinitely
- It has the capacity to act independently similar to individual
- The management or decision making is shared by the board of directors, not sole individual.
Disadvantages of a Corporation
- More costly to set-up than a sole proprietor
- It is mandated by more government reportorial requirements and laws
- Higher capital requirement and operating cost
- Higher tax rates
Different CORPORATE set-up in the Philippines
One Person Corporation
Stock Corporation (at least 2 Incorporation)
ONE PERSON CORPORATION
A One Person Corporation is a corporation with a single stockholder: Provided, That only a natural person, trust, or an estate may form a One Person Corporation.
Stock Corporation-at least 2 Incorporators
Each incorporator of a stock corporation must own, or be a subscriber to, at least one (1) share of the capital stock. The incorporators may be composed of any combination of natural person/s, SEC-registered partnership/s, SEC registered domestic corporation/s or association/s in good standing, as well as foreign corporation/s. Incorporators who are natural persons must be of legal age, and must personally sign the Articles of Incorporation/ Bylaws. Two (2) or more persons, but not more than fifteen (15), may organize themselves and form a corporation.
Each incorporator of a nonstock corporation must be a member of the corporation. The amount of its capital contribution must be stated in the Articles of Incorporation.
A Branch Office is an extension of a foreign corporation that carries out the business activities of its head office from abroad into the Philippines.
A Representative Office is a foreign corporation organized and existing under foreign laws, but physically located in the Philippines. It does not derive income from the host country and is fully subsidized by its head office.