CORPORATION

Basic Concepts in Establishing One

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Corporation
A corporation is an artificial being created by operation of law,
having the right of succession and the powers, attributes and
properties expressly authorized by law or incident to its existence.

A corporation may either be

or Non-Stock
Stock

They can be further classified into:

PUBLIC

PRIVATE

ECCLESIASTICAL

LAY

DOMESTIC

FOREIGN

They can be further classified into:

AGGREGATE

SOLE

CLOSE

OPEN
(usually companies listed in the
Stock Exchange)

QUASI-PUBLIC
DE JURE

(i.e. Local Water Districts, Feliciano vs COA, G.R. No. 147402)

DE FACTO

CORPORATION
BY ESTOPPEL

Juridical Personality
The legal entityis distinct from its members
and constitutes a body endowed, under
conditions provided by law, with adistinct
juridical
personality,
which
renders
itresponsiblefor its actions and recognizes
the shareholders' limited liability, which is
limited to their original capital outlay.

Corporators vs. Incorporators

Incorporators

are the original components of the

corporation, whether it be a stock or a nonstock
corporation; they are the ones who appear on the
articles of incorporation as the original members
or stockholders forming the corporation.

Corporators

include all the stockholders or

members of the corporation, whether incorporators
or coming into the corporation after incorporation.

Stockholder vs. Member

Stockholders

are the owners of shares of stock corporations;

they can be present only in stock corporations.

Members

are those composing non-stock corporations and

those corporators who do not own shares in a stock
corporation; they may therefore be members whether the
corporation is stock or nonstock.

Promoter vs. Incorporator

The

promoter is only one who brings about the formation and existence of
a corporation, but is not a member or stockholder therein.

Incorporator

is one who originally forms part of the corporation.

Note: A promoter may become an incorporator. But a person cannot be

charged with the duties and liabilities of a promoter merely because he is a
subscriber to the corporate stock and one of the original incorporators of the
company.

Difference between.
Corporation
Partnership
A legal entity which is separate from its A business entity with individuals
owners.
who share the risk and benefits of
business.
Owned by Stockholders but run by a
Board (of Directors / Trustees)

Owned and run by Partners

Formed under operational state laws

with Articles of Incorporation.

An agreement among the

members.

Difference between.
Corporation
Partnership
Members of a corporation have to act in
accordance with the corporation's charter.
More structured, less flexible. Easier to
transfer ownership of part of a corporation.

Partnerships have to adhere to a

partnership agreement. More flexible,
less structured. Each part of the
business has to be individually
transferred or sold.

The stockholders are not held responsible in The partners share the liability, and
case of a fault, the corporation is.
are directly responsible in case of
fault.
Dissolution: Stockholder approval,
Dissolution: Decision of the partners
government approval

Registering a corporation: General

Requirements
All applications and supporting documents must be in four (4) copies and in A4
size bond paper with a cover sheets.

Documents

signed abroad must be authenticated by the Philippine Embassy or

Consulate in the country where signed.

Audited

Financial Statements and Special Audit Reports must be certified by an

independent Certified Public Accountant (CPA), with Statement of
Representation filed with the SEC. Said statement must indicate the CPA Cert.
No., PRC/BOA No. and the PTR No. of the CPA and SEC accreditation of External
Auditor if applicable.

All

applications must indicate the Tax Identification Number (TIN) of the

incorporators, directors/trustees, stockholders/members for corporations, and
partners for partnerships.

Registering a Stock corporation:

Requirements
Name

Verification Slip (on-line or at the Name Verification Unit, 2nd

floor, SEC Bldg.)

Articles

of Incorporation and By-laws

Treasurers
Bank

Affidavit

Certificate of Deposit (notarized in place where bank is located)

Clearance

from other government agencies (if applicable)

Foreign

Investment Application Form F 100 (for subsidiaries of

foreign corporations)

Proof

of Inward Remittance by Non-Resident Aliens/Subscribers

Registering a Non Stock corporation:

Requirements
Name Verification Slip (on-line or at the Name Verification Unit, 2nd floor, SEC Bldg.)
Articles of Incorporation and By-laws
Bank Certificate of Deposit of at least P1 million, and a statement of willingness to allow the

Commission to conduct an audit. (only if a Foundation is to be registered)

List of members and amount contributed certified by the Secretary and Treasurer **
Copy of the Certificate of election or letter of appointment of a bishop, rabbi, presiding priest

etc. (only for Corporation Sole)

Master Deed duly entered under the primary entry of the concerned Register of Deeds and

Certification that there is no existing similar corporation within the condominium (only for
Condominium Corporations)

Certification from the Housing and Land Use Regulatory Board (HLURB) that there is no

other existing homeowners or similar associations in the community where the association is
to be established (only for Neighborhood Associations)

1.

Registering a corporation:
Procedure
Verify/reserve
proposed name (on-line or at the Name Verification Unit, 2nd floor, SEC
Bldg.)

2.

Draw up the Articles of Incorporation and ByLaws in accordance with the Corporation
Code. (Blank forms are also available at SECCU, 3rd floor, SEC Bldg.

3.

If applicable, get endorsements from other government agencies. In addition, the CRMD
obtains clearances from other SEC departments whenever these are deemed
appropriate.

4.

Deposit paid-up capital / contribution (for foundations only) in the bank.

5.

Present six (6) sets of the accomplished forms and documents for pre-processing at the
CRMD. 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.

6.

Pay the filing fees to Cashiers counter. (located at G/F SEC Bldg.)

7.

Claim the Certificate/License from the Releasing Unit, Records Division upon
presentation of the official receipt issued for payment of filing fee.

Registering a corporation:
Procedure
REMINDER: Applicants must buy and register

their
Stock & Transfer Book or Membership Book
immediately after the issuance of the Certificate of
incorporation or within 30 days upon issuance
thereof.
All registered corporations are required to submit a
yearly General Information Sheet (GIS) and Audited
Financial Statement (AFS) in the appropriate formats
specified by the Commission.

Schedule of Fees
Registration

and Licensing of Securities

Amendment

to Registration Statement and

Prospectus (SRC Rule 14)

Entities

with Secondary License

Miscellaneous
Scale

of Fines

Fees

Top 8 Philippine Companies in 2015

http://cnnphilippines.com/business/2015/05/08/8-philippine-firms-worlds-top-companies-forbes-2015.html?

http://www.sec.gov.ph/wp-content/uploads/2016/03/FY-2013-Philippines-Top-10Corporations.pdf

Corporation (Income Tax

Rates)
Particular
s

Sec 27 (A)

Sec. 28 (A) (1)

Sec. 28 (B) (1)

Domestic

Resident FC

Nonresident FC

30%
NI within and
without

30%

30%
Gross income
within

In general
Tax Rate
Tax
Base

NI within

Corporation (Income Tax

Rates)
Particular
s

Sec 27 (A)

Sec. 28 (A)
(1)
Sec. 28 (B) (1)
Nonresident
Resident FC
FC

Domestic
Optional corporate tax
Tax
Rate
15%
15%
Tax
Base
Gross income Gross income

Minimum corporate income tax

Tax

Maraming Salamat Po
Mendoza, Moncada, Sebido, Tano, Yasol