One Person Corporation (OPC): rules, fees and steps

Who can and cannot form an OPC

Only a natural person, trust or estate may form a One Person Corporation. Banks and quasi-banks, pre-need, trust, insurance, public and publicly listed companies, and non-chartered government-owned or controlled corporations may not. A natural person licensed to practice a profession may not form an OPC to practice that profession, unless a special law allows it.^[1]

For most micro-business owners this means: if you run a bakery, online shop, trading business or rental business on your own, an OPC is open to you. If you are a licensed professional and the OPC would be for your professional practice, it is not.

Rules that apply only to OPCs

All from the Revised Corporation Code, RA 11232.^[1]

• The letters "OPC" must appear below or at the end of the corporate name (Section 120)
• The single stockholder is the sole director and president (Section 121)
• The OPC must appoint a treasurer and a corporate secretary; the stockholder may not be the corporate secretary (Section 122)
• If the stockholder is also the treasurer, they must post a bond, renewed every two years (Section 122)
• The stockholder names a nominee and an alternate nominee who take over if the stockholder dies or is incapacitated, and may change them by notice to the SEC (Sections 124 and 126)
• An OPC is not required to submit and file corporate by-laws (Section 119)
• There is no minimum authorized capital stock unless a special law requires one (Section 117)

Is your personal money protected?

Section 130 puts the burden on the single stockholder claiming limited liability to show that the corporation was adequately financed. If you cannot prove that the OPC's property is independent of your personal property, you can be held jointly and severally liable for its debts and other liabilities.^[1]

So keep the OPC's money apart from yours from day one: a separate bank account, its own receipts and invoices, and no paying household bills from business funds. That separation is what lets you show the OPC stands on its own.

How much does it cost to register an OPC?

The SEC's OPC guide lists the fee for the Articles of Incorporation at 1/5 of 1% of the authorized capital stock but not less than ₱2,000, a legal research fee of 1% of the filing fee but not less than ₱20, and name reservation at ₱100 per name.^[2]

Example only, using round numbers: with ₱1,000,000 authorized capital stock, the filing fee is ₱2,000 (the minimum), the legal research fee ₱20, and name reservation ₱100, for ₱2,120 in SEC fees. With ₱2,000,000, the filing fee is ₱4,000 and the legal research fee ₱40.^[2]

Filing on eSPARC and OneSEC

OPCs file online on eSPARC, and the SEC's OneSEC subsystem covers OPCs with a stated aim of one-day approval. You verify the name, enter the company details, capital and officers, review the system-generated forms, pay through eSPAYSEC and download the digital Certificate of Incorporation. The full walk-through is in SEC registration.^[3]

Growing out of an OPC, or into one

If you later bring in partners, an OPC can convert to an ordinary stock corporation after notice to the SEC; notice is filed within 60 days of the event that triggers conversion. If one person comes to own all shares of an ordinary corporation, that corporation can apply to convert into an OPC. If the single stockholder dies, the nominee or alternate transfers the shares to the heirs, who have 60 days to tell the SEC whether they will dissolve or convert.^[1]

Questions people ask

Can a foreigner form an OPC?

RA 11232 allows a natural person, trust or estate to form an OPC. Foreign ownership limits come from other laws for certain industries, so check those for your business before filing.

Can I be my own treasurer?

Yes, but you must post a bond, renewed every two years. You cannot be your own corporate secretary.

Does an OPC need by-laws?

No. Section 119 says an OPC is not required to submit and file corporate by-laws.

Is an OPC better than a sole proprietorship?

It depends on your risk, your budget and how you plan to grow. See our side-by-side comparison.