How To Start a Corporation
How To Start a Corporation
Starting a corporation in the Philippines involves transacting and submitting requirements with different government agencies, thus, dettering many from setting up corporations. However, such process may be simplified if the applicant has prepared the necessary documents and has familiarized itself with the step-by-step process discussed below.
The corporation must first verify and reserve its proposed corporate name. This can be done either by: a.) manually submitting the name reservation request to the Securities and Exchange Commission’s (SEC) Company Registration and Monitoring Department (CRMD) at its head office; or, b.) reserving the name through the Company Registration System (CRS) accessible at https://crs.sec.gov.ph/. If the proposed name is unavailable, the corporation can file an appeal either manually or online.
The name reservation shall only be valid for four calendar days.
After the reservation of the proposed corporate name, the signed and notarized copies of the Articles of Incorporation, By-Laws, and Treasurer’s Affidavit must be uploaded on, and the contents thereof entered in, the CRS. If the corporation opts to file it through manual registration, it may submit the documents to the SEC CRMD. One Person Corporations (OPCs) are not required to submit By-Laws; however, they need to submit the written consent of the nominee and the alternate nominee.
The Articles of Incorporation must contain the following information:
(1) Purpose of the corporation;
(2) Principal office;
(3) Term of existence, if not electing perpetual existence;
(4) Names, nationalities, residence, and Tax Identification Number (TIN) or Passport Number of the incorporators, which must not be more than 15;
(5) Names, nationalities, and residence of the directors or trustees; and
(6) Capitalization structure:
(a) For stock corporations: the amount of authorized capital stock, number of shares and its par value, and the name of the original subscribers and their respective subscribed and paid-up shares; and
(b) For non-stock corporation: the amount of capital, and the contributors’ names, nationalities, residences, and contributions.
The corporation may also be required to secure endorsements from other government agencies depending on its nature and business.
After all documents are filed and approved by the SEC, the corporation may proceed with the payment of the SEC filing fees and wait for the release of the Certificate of Incorporation.
As of present, the CRS has not yet been updated to process OPCs, thus, all processes for OPC reservation and registration with SEC must be done manually.
Thereafter, the corporation must secure a business permit from the LGU where it is located.
To apply for a business permit, the enumerated documents must be submitted and the required business permit fee must be paid with the Municipal Office:
(1) Duly accomplished business permit application form;
(2) Barangay clearance;
(3) Proof of occupancy in the LGU jurisdiction (e.g., Certificate of Title, Contract of Lease, or Affidavit of Free Use);
(4) Sanitary permit to operate;
(5) Fire Safety Inspection Certificate;
(6) Special Power of Attorney; and,
(7) Other permits applicable to the nature and business of the corporation.
After securing the business permit, the corporation must secure a Certificate of Registration from the BIR, which states the types of taxes the corporation is liable for. To secure the Certificate of Registration, a BIR registration fee must be paid and the following documents submitted:
(1) Two copies of duly accomplished BIR Form 1903;
(2) Photocopy of business permit;
(3) Proof of occupancy or ownership of the principal place of office; and,
(4) Secretary’s Certificate and Board Resolution authorizing an individual to represent the corporation in the registration process. The corporation must pay the DST on the original issuance of shares of stock on or before the fifth day of the next calendar month following the month of incorporation.