How to register a corporation in the Philippines (SEC)
So you have already decided to register a corporation? If you’re not yet sure, then you might need to read our article about the advantages and disadvantages of forming a corporation over sole proprietorship and partnership. But if you have already finalized your decision and you believe it is best to incorporate your business, you need to follow the following basic steps in registering a corporation with the Philippines (SEC) Securities and Exchange Commission.
1. Verify and reserve your Corporate Name
If you already got the perfect name for your business to be incorporated, you need to verify it immediately and have it reserved before others take it. You can verify the availability of your proposed name and reserve it online at the SEC-iRegister website, a quick, affordable, and user friendly service that is available to the public 24 hours a day, 7 days a week. There, you need to register and have your username and password to be able to log in. Once logged in, you can verify your desired name if it’s still available. If it’s still available, you can pay the reservation pay and get a Name Verification Slip. The slip is submitted together with the other requirements.
2. Articles of Incorporation and By-Laws
After your proposed corporation got its name, you need to prepare you Articles of Incorporation and By-laws in accordance with the Corporation Code. Blank forms for your convenience are available at the Company Registration and Monitoring Department (CRMD). You may also consult a lawyer to see to it that these documents are prepared accordingly.
3. Endorsement from Government Agencies
It should be noted that certain kinds of corporations require secondary license and endorsement from other government agencies depending on their purpose and nature. The following are the corporate activities that require endorsements from different government agencies.
a. Civil Aeronautics Board (CAB) – for Air Transport
b. Bangko Sentral ng Pilipinas – for banking, pawnshops & other financial intermediaries with quasi-banking functions.
c. Games and Amusement Board (GAB) – for Professional boxing
d. Philippine Charity Sweeptakes Office (PCSO) – for operation of games of chance (e.g. lotto)
e. Department of Education (DepEd) – for educational institution – elementary to eigh school
f. Commission on Higher Education (CHED) – for educational institution – college or gertiary course
g. Technical Skills Development Authority (TESDA) – for educational institution – technical or vocational course
h. Department of Energy (DOE) – for electric power plants
i. Department of Health (DOH) – for hospitals
j. Insurance Commission (IC) – for insurance
k. Land Transportation Franchise Regulatory Board (LTFRB) – for land transport
l. Maritime Industry Authority (MARINA) – for water transport, construction and building of vessels
m. National Telecommunications Commission (NTC) – for operation of radio, television and telephone
n. Philippine Overseas Employment Administration (POEA) – for recruitment of overseas employment
4. Minimum Paid-up Capital
As required by the Corporation Code of the Philippines, stock corporations shall subscribe at least 25% of its authorized stock, and paid at least 25% of its subscribed capital stock (but will not less that Php 5,000), except for certain types of corporations which have different minimum paid-up capital requirements. The minimum paid-up capital should be deposited in the bank. Banks usually require a Board Resolution authorizing the corporate treasurer to open an account with them. A certificate of deposit of the deposited paid-up capital should be obtained from the bank. This is one of the documents to be submitted with the SEC.
5. Complete Application Documents
To complete all the application documents requirements, you should prepare and complete the other required documents including the (a) Treasurer’s Affidavit / Authority to verify Bank Account (b) Written Undertaking to change Corporate Name by any Incorporator or Director, Trustee, Partner, and (c) Registration Data sheet.
6. Filing and Fees
After all the required application documents are completed, present 6 sets (number may change depending on S.E.C. memorandum ad issuances) of the accomplished forms and documents for pre-processing at the CRMD. Take note that only complete application documents are accepted for processing. All documents executed outside the Philippines must be authenticated by the appropriate Philippine embassy or consulate in the area concerned. After presenting at the CRMD, pay the filing fees to the Cashier.
7. Certificate of Incorporation
Claim the Certificate of Incorporation / license to operate from the Releasing Unit, Records Division upon presentation of the official receipt issued for payment of filling fee. You can buy and register your corporate Stock and Transfer Book or Membership Book immediately after the issuance of the Certificate of Incorporation or within 30 days upon issuance thereof.
8. Documentary Stamp Tax
The documentary stamp tax on the original issuance of shares of stock must be filed and paid with the Bureau of Internal Revenue (BIR) or Authorized Agent Bank (AAB). Section 174 of the National Internal Code (as amended), requires such payment at the rate of Php1 on each Php200 or a fractional part thereof of the par value of the shares of stock. Payment must be made on or before the 5th of the month following the date of issuance of the registration certificate or issuance of shares.