University of Southern Philippines Foundation

Salinas, Drive

Company Formation in the

Philippines: Documentary
Requirements for
NON-STOCK CORPORATION
University of the Philippines
Los Baños (UPLB)

Presented By:

Gerzon
Saiga
Cortes
Melendres
Sadili
Generale
Pomarejos
Dumagpi
Salcedo
Torcino
Esdrelon
Pitoc
Introduction

In the dynamic landscape of business law, the process of company formation

stands as a cornerstone for budding entrepreneurs seeking to establish their
ventures. The University of the Philippines Los Baños (UPLB), a hub of
academic excellence and innovation, becomes the focal point for an in-depth
exploration of the intricate web of documentary prerequisites for company
formation in the Philippines. This comprehensive paper, meticulously
prepared by a second-year Bachelor of Science in Accountancy (BSA) student,
unravels the essential legal framework and exhaustive documentation
mandated by Philippine law, offering a comprehensive guide for aspiring
business leaders navigating the complexities of setting up enterprises within
the UPLB context.

Within the realm of Business Law, company formation embodies a critical

juncture that demands meticulous adherence to legal regulations and
documentation. Leveraging the second-year BSA student’s intensive research
and analysis, this paper unveils a roadmap tailored specifically to the
requirements stipulated for business-seeking establishments within the UPLB
vicinity. By delving into the nuances of Philippines business legislation and
aligning them with the unique context of the esteemed university, this work
endeavors to illuminate the procedural intricacies, highlight potential
challenges and offer pragmatic insights essential for students and
entrepreneurs venturing into the realm of business within this academic
sphere. Through meticulous curation and scholarly exploration, this paper
aims to serve as a compass, guiding future entrepreneurs through the
labyrinth of documentation necessary to realize their business aspirations
within the UPLB domain.

In the ever-evolving landscape of Philippine business legislation, the

Revised Corporation Code stands as a pivotal milestone in reshaping the
contours of company formation. Enacted to adapt to the modern demands of
entrepreneurs, this restructured code introduced pivotal reforms aimed at
simplifying processes, fostering ease of doing business, and enhancing
corporate governance standards. This paper contextualized the implications of
the Revised Corporation Code within the UPLB setting, including its profound
impact on the documentary prerequisites for establishing business. By
dissecting the amendments, their practical implications, and their alignment
with the UPLB-specific business environment, this work offers a
comprehensive understanding of how these legislative changes reverberate
through the lens of aspiring entrepreneurs navigating the intricacies of
company formation within this academic community.
NAME VERIFICATION SLIP
 This image serves as an illustration of a non-stock corporation certification
due to still waiting to receive the name verification slip from the SEC for UPLB.
Additionally, we’ve included guiding questions highlighting the significance of
name verification in relation to R.A 11232 Revised Corporation Code of the
Philippines.

1. What legal weight does the Certificate of Incorporation hold

according to Section 14 of Republic Act No. 11232, and how does it
establish the existence of a corporation?

According to Section 14 of RA 11232, the Certificate of Incorporation is

considered prima facie evidence of the existence of the corporation. This
means that the certificate is accepted at face value as sufficient evidence unless
proven otherwise. The legal weight of the Certificate of Incorporation is
significant in establishing the existence of a corporation. In practical terms,
the Certificate of Incorporation is a crucial document issued by the Securities
and Exchange Commission (SEC) in the Philippines upon approval of the
articles of incorporation. It contains essential details about the corporation,
including its name, purpose, authorized capital stock, and other pertinent
information. The issuance of the Certificate of Incorporation is a formal
recognition by the government that the corporation has met the legal
requirements for its establishment. As prima facie evidence, it simplifies legal
proceedings by providing a starting point that assumes the corporation's
existence unless there is evidence presented to the contrary. This legal weight
is fundamental in various business transactions, contractual agreements, and
other legal matters involving the corporation.

2. In what ways does Section 15 of the Republic Act No. 11232 emphasize
the importance of the Certificate of Incorporation in ensuring
compliance with the law and maintaining corporate accountability?

The following are the key points that emphasize the significance of a
Certificate of Incorporation:

Issuance by Securities and Exchange Commission (SEC):

Section 15 highlights that the Certificate of Incorporation is issued by the

Securities and Exchange Commission (SEC), the regulatory body overseeing
corporations in the Philippines. This emphasizes the role of the SEC in ensuring
that corporations comply with legal requirements.

Conclusive Evidence of Incorporation:

The provision specifies that the Certificate of Incorporation is conclusive

evidence of the fact that all requirements of this Code have been complied with.
This means that once the SEC issues the certificate, it serves as a final
confirmation that the corporation has met the necessary legal obligations for
its establishment.

Liability of Incorporators, Directors, Trustees, and Officers:

Section 15 explicitly states that the liability of incorporators, directors,

trustees, and officers extends up to the issuance of the certificate. This
underscores the accountability of those involved in the process of
incorporation. If there are any misrepresentations or fraudulent actions
leading up to the issuance of the certificate, the individuals responsible can be
held accountable.

Misrepresentation and Concealment:

The section further specifies that if there is any misrepresentation or

concealment in the application for incorporation, the incorporators, directors,
trustees, and officers may be held criminally liable. This reinforces the
importance of providing accurate and truthful information during the
incorporation process.

Corporate Acts after Issuance:

Section 15 clarifies that the issuance of the Certificate of Incorporation

does not relieve the corporation or its incorporators, directors, trustees, and
officers from compliance with other provisions of the law. This emphasizes
that the certificate is not a one-time authorization but an ongoing
requirement for corporate adherence to legal provisions.
 3. Please elaborate on the rights and privileges granted to a corporation upon
issuing the Certificate of Incorporation as specified in Section 16 of Republic
Act No. 11232. How does this document affect a corporation's ability to
operate within the legal framework of the Philippines?

Section 16 of RA 11232 details the rights and privileges granted to a

corporation upon issuing the Certificate of Incorporation.

Corporate Existence and Succession: The Certificate of Incorporation grants

the corporation a separate legal personality distinct from its incorporators.
This means that the corporation has its rights and obligations, and it can
continue to exist even if there are changes in its membership.

Powers and Capacities: Upon issuance of the certificate, the corporation is

granted the power and capacity to act as a juridical person. It can exercise all
powers stated in its articles of incorporation that are not contrary to law,
morals, good customs, public order, or public policy.

Powers Under the Revised Corporation Code: The corporation's powers, as

specified in its articles of incorporation and the Revised Corporation Code,
encompass the ability to own properties, enter into contracts, sue and be sued,
and conduct business operations within the scope defined by its purpose.

Limited Liability of Stockholders or Members: One of the significant

privileges is the limited liability of stockholders or members. Their liability is
generally confined to the extent of their investment in the corporation. This
provides a level of protection for individual assets against the corporation’s
liabilities.

Perpetual Existence: A corporation, unless otherwise provided in its articles

of incorporation or amended bylaws, has perpetual existence. This perpetual
existence ensures continuity in its operations and facilities' long-term
planning and commitments.

Corporate Acts: The certificate empowers the corporation to perform

various corporate acts, including the issuance of shares, adoption of bylaws,
holding of meetings, and election of directors and officers.
 Essentially, the Certificate of Incorporation is the foundational
document allowing a corporation to exist, operate, and enjoy specific legal
rights and privileges. It establishes the corporation as a legal entity with the
ability to engage in various business activities within the framework set by law.
ARTICLES OF INCORPORATION
BY-LAWS
BANK CERTIFICATE OF DEPOSIT AND A STATEMENT OF WILLINGNESS TO ALLOW
THE SEC TO CONDUCT AN AUDIT

In the absence of any information from the SEC regarding the UPLB statement of
bank certificate of deposit and statement of willingness to allow an audit, it becomes
crucial to present the format of the “Statement of Willingness to be Audited.” This
document serves as an affirmation of openness and transparency, expressing the
entity’s readiness and willingness to undergo an audit by the SEC. It outlines the
terms, conditions, and permission granted to facilitate the audit process, ensuring
compliance and cooperation with regulatory requirements. The format of this
statement typically included details of the entity, its financial standing, and explicit
consent for the SEC to conduct a thorough examination. Crafting and presenting such
documents becomes pivotal to proactively engaging with regulatory bodies, fostering
trust, and demonstrating a commitment to adherence and accountability within the
financial landscape. (See the next page for the format.)
REPUBLIC OF THE PHILIPPINES )

CITY OF _______ ) S.S

STATEMENT OF WILLINGNESS TO BE AUDITED

I, (Full Name) , of legal age, Filipino and resident of ,

Philippines , after having been duly sworn to in accordance with law, hereby depose
and say:

That I am one of the incorporators/directors of (Name of Corporation) which is

in the process of registration with the Securities and Exchange Commission.

That pursuant to SEC Guidelines on Foundation dated _____, I, in behalf of

the foundation, hereby state our willingness to allow the Commission to conduct audit
of our financial books from time to time and authorize the Commission to inspect and
examine our corporate and accounting books, records, names of beneficiaries,
agreement entered into,correspondences and all other pertinent documents.

That this affidavit is executed to attest to the truth of the foregoing and for
whatever legal purpose and intents it may serve.
IN WITNESS WHEREOF, I have hereunto placed my signature this th day of
_____, 2023.

__________________________
Affiant

SUBSCRIBED AND SWORN to before me, affiant exhibiting to me his

________ No. ________ issued on _________, 2023 at City of ______.

Doc No. _____

Page No._____
Book No. _____
Series of 2023.____
TREASURER'S AFFIDAVIT

REPUBLIC OF THE PHILIPPINES)

CITY OF _______ )S.S.

I, (Full Name) , being duly sworn, depose and say:

That I have been elected by the subscribers of the corporation as Treasurer thereof,to
ct as such until my successor has been duly elected and qualified in accordance with
the by-laws of the corporation, and that as such Treasurer, I hereby certify under oath
that at least 25% of the authorized capital stock of the corporation has been
subscribed and at least 25% of the subscription has been paid, and received by me in
cash/property for the benefit and credit of the corporation.
This is also to authorize the Securities and exchange Commission to examine
and verify the deposit in
___________________________
_____________________
(Name of Bank) (Branch)
in my name as treasurer in trust for (Name of Corporation). in the amount of ONE
MILLION PESOS (P 1,000,000) representing the paid-up capital of the said
corporation which is in the process of incorporation. This authority is valid and
inspection of said deposit may be made even after the issuance of the Certificate of
Incorporation to the corporation. Should the deposit be transferred to another bank
prior to or after incorporation, this will also serve as authority to verify and examine
the same. The representative of the Securities and Exchange Commission is also
authorized to examine the pertinent books and records of accounts of the corporation
as well as all supporting papers to determine the utilization and disbursement of the
said paid-up capital.

In case the said paid-up capital is not deposited or withdrawn prior to the
approval of the articles of incorporation, I, on behalf of the above named corporation,
waive our right to a notice hearing in the revocation of our Certificate of
Incorporation.
________________
Treasurer
SUBSCRIBED AND SWORN to before me this ___ day of ______,20__ at
_____________________, Philippines, affiant exhibiting to me his/her
Identification Card_______ issued at _______ on __________.
NOTARY PUBLIC
Until December 31, 20__
Doc. No.______:
Page No.______:
Book No.______:
Series of 20____.
Written Undertaking to Change Corporate Name by any Trustee (as applicable)

Sec.15. Forms of Articles of Incorporation. – Unless otherwise prescribed by special

law, articles of incorporation of all domestic corporations shall supply substantially
the following requirements in the form as provided for by the SEC:

1. The name of the corporation.

Incorporators may choose any name they see fit, however strange, uneuphonious, or
unrhetorical it may be, provided it is one not identical with or prejudicially similar to a
name that has previously been adopted by and is being used by another corporation as
its corporate name

Change of Corporate name

The change of the corporate name doesn’t mean a new corporation, nor the
successor of the original corporation. It is the same corporation with a different name
having its character with no respect change. The corporation continues, as before,
responsible in its new name for all debts or other liabilities it had previously
contracted or incurred.

2. Specific purpose or purposes.

The statement of the purpose has its principal function the affirmative authorization
of the management to enter into those contracts and business transactions which may
be considered as incidental to its attainment of the purposes. It also imposes implied
limitations of their authority by the exclusion of lines of activity that are not covered.

3. Principal office of the Corporation.

The principal office of the corporation must be within the Philippines. It is where the
books of the corporation are kept and its officers usually and ordinarily meet to
manage the affairs and transactions of the business of the corporation.

4. Terms of Existence of the Corporation.

The corporation shall exist for a period not exceeding fifty (50) years from the date of
incorporation unless sooner dissolved or unless said period is extended.
5. Names, Nationalities, and residences of incorporators.

The names, nationalities, and residences of the incorporators must be stated in the
articles of the corporation for the purpose of complying with the legal requirement
that the majority of the incorporators must be residents of the Philippines and
complying with the statutory requirement on share ownership and in other instances
where Filipino Citizens are required.

6. Number of directors and trustees.

The number of directors and trustees must not be less than five (5) or more than
fifteen (15).

7. Names, nationalities, and residences of directors.

A majority of the directors or trustees of all corporations organized under this Code
must be resident citizen of the Philippines.

8. Amount of authorized capital stock.

A stock corporation must state the “amount of its authorized capital stock in lawful
money of the Philippines, the number of shares into which it is divided, and in case
the shares par value shares, the par value of each, the names, nationalities, and
residences of the original subscribers, and the amount subscribed and paid by each on
his subscription, and if some or all the shares are without par value, such fact must be
stated”.

9. Non-stock Corporation.

The Corporation Code requires the articles of the non-stock corporation to state: the
amount of its capital, the names, nationalities, and residences of its contributors, and
the amount contributed by each. A non-stock corporation may have capital but it has
no authorized capital stock.

10. Inclusion of other matters.

The articles of incorporation “may include other matters that is not inconsistent with
law and which the incorporators may deem necessary and convenient”.

Sworn Statement of the Treasurer

The Securities and Exchange Commission shall not accept the articles of
incorporation of any stock corporation unless accompanied by a sworn statement of
the Treasurer elected by the subscribers showing that at least:

1. 25% of the authorized capital stock has been subscribed.

2. 25% of the subscription has been fully paid in actual cash or property.

3. The paid-up capital is not less than P5,000.00.

SEC Policy

Property as subscription payment – Generally, all forms of tangible properties are

acceptable for purposes of payment to subscription provided that the three tests of
paid-up capital determination are complied with, i.e., ownership, existence, and
value, subject to certain restrictions as may be imposed by law.

SEC adopted the policy that discourages the inclusion of intangible assets such as
goodwill, lease-hold rights, or timber concession rights, payment of such properties
Motor vehicles, real estate properties, and navigable vessels in payment of
pre-incorporation subscription, increases of capital stock or in exchange for
additional issuance of shares are allowed only by the SEC provided that:

1. There has been a proof of valid transfer;

2. All taxes due from the properties have been paid; and

3. Such properties have been reasonably valued.

Papers to accompany articles with SEC

 The SEC requires the following papers to be submitted to it with the articles of
incorporation:

1. A verification slip executed by the Chief of the Record Section states that the
proposed name of the corporation has been verified and found to be distinct/ not
similar to the names of an already existing corporation or those pending registration.

2. Written undertaking to change corporate name in case there is a person, firm or

entity with a prior right to the use of said name or one similar to it.

3. Sworn statement of assets and liabilities, duly executed under oath by the corporate
treasurer together with the amount of P50.00 to defray publication expenses.

4. Bank certificate of deposit, issued under oath by the bank manager or any
authorized bank officer, that there is a deposit of the stated amount representing the
paid-up capital of the corporation either in the name of the treasurer in trust for the
corporation or in the name of the corporation itself.

5. Written authority to verify bank deposit signed by the corporate treasurer

empowering the SEC and /or the Central bank to check and inspect the existence of the
bank deposit of the corporate paid-up capital.

6. Taxpayer account number of the incorporators pursuant to Executive Order No. 213.

7. Registration Data Sheet, a statement in statistical data form, signed by an

authorized representative of the corporation regarding important information about
the corporate seal, corporate name, principal office, capital structure, subscription,
and TAN (SEC Bulletin, Oct. 1982).

Sec. 16. Amendment of Articles of Incorporation. – Unless otherwise prescribed by

this Code or by special law, and for legitimate purposes, any provision or matter
stated in the articles of incorporation may be amended by a majority vote of the board
of directors or trustees and the vote or written assent of the stockholders representing
at least two-thirds (2/3) of the outstanding capital stock, without prejudice to the
appraisal rights of dissenting stockholders in accordance with the provision of this
Code, or the vote or written assent of two-thirds (2/3) of the members if it is a
non-stock corporation.
 The original and amended articles altogether shall contain all provisions required
by law to be set out in the articles of incorporation. Such articles, as amended shall be
indicated by underscoring the change or changes made, and the copy thereof duly
certified under oath by the corporate secretary and the majority of the directors or
trustees stating the fact that said amendments have been duly approved by the
required vote of the stockholders or members, shall be submitted to the Securities and
Exchange Commission.

The amendment shall take effect upon its approval by the Securities and Exchange
Commission or from the date of filing with the said Commission if not acted upon
within six (6) months from the date of filing for a cause not attributable to the
corporation.

The law reserves the right to modify the charter

The constitution and the Corporation Code reserved the right to amend the charter
of a private corporation. The constitution provides that “no franchise or right be
granted except under the condition that it shall be subject to amendment, alteration,
or repeal by the National Assembly when the public interest so requires.

Amendment of Articles of Incorporation

The Articles of Incorporation may be amended for legitimate purposes that refer to
any matter stated in the Articles of Incorporation. It may refer to:

1. Change of corporate name;

2. Extension of term of corporation;

3. Change in classes or series of shares;

4. Change in rights, privileges, or restrictions in share ownership;

5. Increase or decrease in the number of directors; and

6. Change in purpose or purposes and other necessary changes.

 Vote or recent assent required in amendment of the articles of incorporation shall
be as follows:

Stock Corporation – A majority vote of the directors or trustees and the vote or
written assent of the stockholders representing at least two-thirds (2/3) of the
outstanding capital stock. Under section 81 of the Code, a dissenting stockholder may
exercise his appraisal right if he is against the amendment to be made and demand
payment of the fair value of his shares.

Non-stock Corporation – A majority vote of the board of directors and the vote or
written assent of 2/3 of the members.

The amendments to the articles of incorporation shall take effect upon its approval
by the Securities and Exchange Commission or from the filing with the said
Commission if not acted upon within six months from the date of filing for a cause not
attributable to the corporation.

Sec. 18. Corporate name. – No corporate name may be allowed by the Securities
and Exchange Commission if the proposed name is identical or deceptively or
confusingly similar to that of any existing corporation or to any other name already
protected by law or if it is patently deceptive, confusing or contrary to existing laws.
When the change in a corporate name is approved, the commission shall issue an
amended certificate of incorporation under the amended name.

Necessity of Corporate Name

A corporation must have a name because that is the only way by which the
corporation can be identified and distinguished from other corporations, firms, or
entities.

Change of corporate name

A corporation may change its name by merely amending its charter in the manner
prescribed by law. The change of name of the corporation does not result in
dissolution. The changing of the name of a corporation is no more the creation of a
corporation than the changing of the name of a natural person.
Restriction in the use of certain names or words

There are special laws prohibiting the use of certain names and/or words. Thus,
under the General Banking Act, no person or entity not conducting the business of
commercial banking shall use the words “bank”, “banking”, “banker”, “building and
loan association”, “trust corporation”, etc., or words of similar import. The word
“National” under Act 2612 may not be used by those doing business as bankers,
brokers, or savings institutions. “United Nations” both in its full and abbreviated
forms, for commercial and business purposes. There are other names or words which
pursuant to other special laws may not be used.
LIST OF MEMBERS CERTIFIED BY THE SECRETARY AND TREASURER:

BOARD OF TRUSTEES

Dr. Jose V. Camacho, Jr.

Chairman
Chancellor – University of the
Philippines Los Baños (UPLB)

TRUSTEES

Prof. Rolando T. Bello Dr. Elpidio M. Agbisit, Jr.

Vice Chairman Dean
Vice Chancellor for Administration – College of Agriculture and Food Science
UPLB

Dr. Nathaniel C. Bantayan Dr. Rossana Marie C. Amongo

Vice Chancellor for Research and Dean
Extension – UPLB College of Engineering and
Agro-Industrial Technology

Prof. Marlo D. Mendoza Dr. Ricardo M. Sandalo

Dean Dean
College of Forestry and Natural College of Human Ecology
Resources

Dr. Rico C. Ancog Capt. Mauro W. Barradas

Dean Alumni Representative
School of Environmental Science and
Management
 CURRENT OFFICERS OF UPLBFI

President
Jose V. Camacho, Jr., PhD
Specialization: Economics of Education, Labor, and Human Resource Economics

Corporate Secretary
Elpidio M. Agbisit, Jr., PhD
Specialization: Swine Production

Executive Director
Enrico P. Supangco, PhD
Specialization: Ruminant Production

Treasurer
Ernesto P. Lozada, PhD
Specialization: Chemical Engineering, Agricultural Engineering