Philippines’ Revised Corporation Code

November 4, 2022

Philippines’ Revised Corporation Code (Effective - February 23, 2019)

By: Kathia Kierstin Chanyee

With the goal of doing business in the Philippines without difficulty, Republic Act No. 11232 or otherwise known as the Revised Corporation Code of the Philippines (hereinafter, “RA 11232”) was signed into law last February 20, 2019 and became effective after its complete publication in Manila Bulletin and the Business Mirror on February 23, 2020. The Revised Corporation Code repealed the Batas Pambansa Bilang 68 or the 1980 Corporation Code of the Philippines (hereinafter, “BP 68”)

We listed below the five important changes brought about by RA 11232 that would somehow ease doing business and to cut red tape practices in the Philippines:

1.One Person Corporation (OPC)

Single stockholder may now incorporate and such stockholder shall be deemed the president and sole director of the corporation. Such single stockholder can also be the self-appointed treasurer of the corporation and needs only to post the required bond with the Securities and Exchange Commission (SEC). Only natural persons, trust and estate may form an OPC.

2. Electronic Filing and Monitoring System

RA 11232 requires the SEC to promulgate rules that will facilitate and expedite through electronic filing, among others, corporate name reservation and registration, incorporation, submission of reports, notices, and documents required under RA 11232, and sharing of pertinent information with other government agencies. To date, the SEC is using the Company Registration System (CRS)

3. Electronic Notices and Remote Communication

Notices of meeting and proposed actions to stockholders, directors, officers, members and trustees may now be sent electronically in accordance with the rules and regulations on the use of electronic data messages of the SEC. Attendance on corporate meetings of stockholders, directors, trustees and members and, voting on proposed actions of the corporation may be done in absentia or through remote communication such as videoconferencing, teleconferencing, or other alternative modes of communication that allow them reasonable opportunities to participate, if cannot attend physically.

4. Perpetual Existence

RA 11232 amended the 50-year limitation of corporate existence under BP 68 and now regards corporation to have perpetual existence unless otherwise provided in its articles of incorporation. This also applies to those corporations with certificate of incorporation issued prior to the effectivity of RA 11232 unless such corporations opt to retain its specific corporate term.

5. Minimum Capitalization Requirement Removed

Aside from the removal of the minimum requirement of stockholders in a corporation, RA 11232 also get rid of Section 13 of BP 68 relating to the minimum capitalization requirement or the required subscribed and paid up capital. In order also to ensure that the requirements under RA 11232 are complied with, the new code increased the fines and penalties for non-compliance of the necessary requirements and violation of the provisions of RA 11232. Fines and penalties now range from Php 10,000.00 to Php 5,000,000.00 depending on the seriousness of the offense on top of possible dissolution of the corporation. For inquiries or need of assistance to avoid violations relating to the new code, Contact Us.

Fermil-Cervantes, Fabian & Ong Abrantes Law Office