Tips on Incorporating under Philippine Laws

When forming a domestic corporation in the Philippines, bear in mind that the Securities and Exchange Commission (SEC) is the government agency tasked with the implementation of registration requirements for domestic corporations. Accordingly, allow me to share you some tips in forming a domestic corporation:

a) Choose your corporate name beforehand. Please bear in mind that you cannot use a corporate name which is similar or confusingly similar from other corporations that are already existing and registered at the SEC. In thinking of a company name, the words "Inc.", "Incorporated," "Corp.", and "Corporation" are phrases that must be attached or included to your proposed corporate name. In addition, you must be ready for at least 6 choices of corporate names so that you will not have a difficult time falling in line when reserving your corporate business name for purposes of registration.

b) The following are the documentation requirements for purposes of registration as of this posting:

 Reservation of Corporate Name Confirmation;
 Articles of Incorporation with undertaking by the incorporators to change the corporate name immediately upon receipt of notice or directive from the SEC that another corporation, partnership or person has acquired a prior right to the use of that name, or that name has been declared misleading, deceptive, confusingly similar to a registered name, or contrary to morals, good customs or public policy;
 By-laws;
 Treasurer’s Affidavit;
 Certificate of Bank Deposit of the paid-up capital of the corporation.

c) In devising the articles of incorporation, please be reminded that of the authorized capital stock to be declared, 25% of the authorized capital stock must be subscribed by the incorporators and 25% of the subscribed capital stock must be paid, in which case, the total paid-up capital must not be less than P5,000.00.

d) The following are the prescribed contents of the articles of incorporation as mandated by the Corporation Code and as per directive of the Securities and Exchange Commission:

 Primary purpose of the corporation;
 Place where the principal office of the corporation is to be located;
 Name, nationality, Tax Identification number and residence of the incorporators. Under the Corporation Code, the incorporators must consist of at least five but not more than 15 natural persons, of legal age, and majority of whom must be residents of the Philippines as stated in the articles of incorporation;
 The number of shares subscribed by each incorporator. It is a legal requirement that each incorporator must have a subscribed share of the capital stock of the corporation, not necessarily paid;
 The total amount of paid up capital from the subscribed capital stock;
 The designated Treasurer of the Corporation.

e) In devising the By-laws of the corporation, the same must be executed at the principal office where the corporation is to be located.

f) The treasurer's affidavit signifies a sworn statement by the designated Treasurer of the Corporation that: (i) he or she has been elected by the subscribers as the treasurer of the corporation, and shall act as such until a successor has been duly elected and qualified in accordance with the by-laws of the corporation; (ii) he or she is subscribing under oath that at least 25% of the authorized capital stock of the corporation is subscribed, 25% of the subscribed capital stock has been paid for the benefit and credit of the corporation; (iii) he or she authorizes the Securities and Exchange Commission and Bangko Sentral ng Pilipinas to examine and verify the bank deposit acccount in his/her name as Treasurer-In-Trust for the Corporation which represents the paid up capital of the corporation; (iv) he or she authorizes the SEC to examine the pertinent books and records of accounts of the corporation as well as supporting papers to determine the utilization and disbursement of the said paid-up capital; (v) he or she waives the right of the corporation to a notice and hearing in the revocation of the Certificate of Incorporation of the Corporation in case the said paid-up capital is not deposited or withdrawn prior to the approval of the articles of incorporation.

g) The articles of incorporation, Treasurer's Affidavit and Certificate of Bank Deposit must be subscribed before a notary public. In addition, the articles of incorporation must be signed by at least two instrumental witnesses who must not be designated incorporators of the corporation.

h) The Stock and Transfer Book of the Corporation must be registered at the Securities and Exchange Commission within one month from the time a Certificate of Incorporation has been issued by the SEC.

For more information visit the website of the Securities and Exchange Commission.