ARTICLES OF INCORPORATION AND BY-LAWS – STOCK CORPORATION

Articles of Incorporation

Of

(Name of the Corporation)

KNOW ALL MEN BY THESE PRESENTS:

The undersigned incorporators, all of legal age and majority of whom are
residents of the Philippines, have this day voluntarily agreed to form a stock
corporation under the laws of the Republic of the Philippines;

AND WE HEREBYCERTIFY:

FIRST: That the name of said corporation shall be

_____________________________________________________________________________________________________
_____________________________________________________________________________________________________
_____________________________________________________________________________________________________
____________________________________________________________________________________;

SECOND: That the primary purpose for which such corporation is incorporated:

_____________________________________________________________________________________________________
_____________________________________________________________________________________________________
_____________________________________________________________________________________________________
_____________________________________________________________________________________________________
_____________________________________________________________________________________________________
____________________________________________________________________________;

Provided that the corporation shall not solicit, accept or take

investments/placements from the public neither shall it issue investment contracts.

THIRD: That the principal office of the corporation is located in

_____________________________________________________________________________________________________
_____________________________________________________________________________________________________
_____________________________________________________________________________________________________
____________________________________________________________________________________;
(complete address)

FOURTH: That the term for which said corporation is to exist is __________________
years from and after the date of issuance of the certificate of incorporation;

FIFTH: That the names, nationalities and residences of the incorporators are as
follows:
 NAME NATIONALITY RESIDENCE

SIXTH: That the number of directors of the corporation shall be _______________;

and the names, nationalities and residences of the first directors of the corporation are
as follows:

NAME NATIONALITY RESIDENCE

SEVENTH: That the authorized capital stock of the corporation is

_____________________________________(P_____________________________) pesos in lawful money of
the Philippines, divided into__________________________________ shares with the par value of
____________________________(P_______________) pesos per share;
 EIGHT: That at least twenty five (25%) percent of the authorized capital stock
above has been subscribed as follows:

NAME OF NO. OF SHARES AMOUNT

SUBSCRIBERS NATIONALITY SUBSCRIBED SUBSCRIBED

NINTH: That the above-named subscribers have paid at least twenty-five (25%)
percent of the total subscription as follows:

NAME OF AMOUNT
SUBSCRIBERS SUBSCRIBED TOTAL PAID-UP

TENTH: That ______________________________________has been elected by the

subscribers as Treasurer of the Corporation to act as such until his successor is duly
elected and qualified in accordance with the by-laws, and that as such Treasurer, he has
been authorized to receive for and in the name and for the benefit of the corporation, all
subscriptions or donations paid or given by the subscribers.

ELEVENTH: That no transfer of stock or interest which will reduce the

ownership of Filipino Citizens to less than the required percentage of the capital stock
as provided by existing laws shall be allowed or permitted to be recorded in the proper
books of the corporation and this restriction shall be indicated in all the stock
certificates issued by the corporation.

TWELFTH: That the incorporators and directors undertake to change the name
of the corporation as herein provided, or as amended thereafter, immediately upon
receipt of notice or directive from the Securities and Exchange Commission that another
corporation, partnership or person has acquired a prior right to the use of that name or
that the name has been declared as misleading, deceptive, confusingly similar to a
registered name or contrary to public morals, good custom or public policy.

IN WITNESS WHEREOF, we have hereunto signed these Articles of

Incorporation, this __________day of ____________________ 20______, in the City/Municipality of
_______________________, Province of____________________, Republic of the Philippines.

TIN- TIN- TIN-

TIN- TIN- TIN-

(Names and signatures of the incorporators and TIN)

ACKNOWLEDGEMENT

REPUBLIC OF THE PHILIPPINES }

} S.S.

BEFORE ME, a Notary Public, for and in _____________________, Philippines,

this ___________day of ______________________, 20 _________, personally appeared the following
persons:

TIN/ID/Passport Date &

Name No. Place Issued

known to me and to me known to be the same persons who executed the foregoing
Articles of Incorporation constituting of four (4) pages, including this page where the
acknowledgement is written, and they acknowledged to me that the same is their free
act and voluntary deed.

WITNESS MY HAND AND SEAL on the day first above-written.

NOTARY PUBLIC
Doc. No. ________
Page No. ________
Book No. _________
Series of _________

TREASURER’S AFFIDAVIT

REPUBLIC OF THE PHILIPPINES )

CITY/MUNCIPALITY OF ) S.S
PROVINCE OF )

I, ______________________________________, being duly sworn to, depose and say:

That I have been elected by the subscribers of the corporation as Treasurer

thereof, to act 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 total subscriptions has been paid, and
received by me, in cash or property, in the amount of______________________________ in
accordance with the Corporation Code

___________________________________
(Signature of Treasurer)

SUBSCRIBED AND SWORN to before me, a Notary Public, for and in the
City/Municipality of_____________________________, Province of___________________________ this
______ day of ____________________,19_______; by _________________with Res. Cert.
No._____________________ issued at _________________________on _________________, 19_________.

NOTARY PUBLIC
My commission expires on
_______________________, 19___________
Doc. No._______
Page No._______
Book No.________
Series of ________

BY –LAWS

OF

(Name of Corporation)

I. THE TIME, PLACE AND MANNER OF CALLING AND CONDUCTING REGULAR OR

SPECIAL MEETINGS OF THE DIRECTORS.

a) Regular meetings of the board of directors of the corporation shall be held

monthly, unless the by-laws provide otherwise.

b) Special meetings of the board of directors may be held at any time upon the
call of the president or as provided in the by-laws

c) Meetings of directors may be held anywhere in or outside of the Philippines,

unless the by-laws provide otherwise. Notice of regular or special meetings
stating the date, time and place of the meeting must be sent to every director
or trustee at least one (1) day prior to the scheduled meeting, unless
otherwise provided by the by-laws. A director may waive this requirement,
either expressly or impliedly.

II. THE TIME AND MANNER OF CALLING AND CONDUCTING REGULAR OR SPECIAL
MEETINGS OF THE STOCKHOLDERS.

a) Regular or annual meetings of stockholders shall be held annually

on______________________ (specific date).

b) Written notice of regular meetings shall be sent to all stockholders of record

at least two (2) weeks prior to the meeting, unless a different period is
required by the by-laws.

c) Special meetings of stockholders shall be held at any time deemed necessary

or as provided in the by-laws:

d) Written notice of special meetings shall be sent to all stockholders at least

one week prior to the meeting, unless a different period is required by the by-
laws.
 e) Stockholders’ meetings, whether regular or special, shall be held in the city or
municipality where the principal office of the corporation is located, and if
practicable in the principal office of the corporation. Metro Manila shall, for
the purpose of this provision, be considered city or municipality.

III. THE REQUIRED QUORUM IN MEETINGS OF STOCKHOLDERS

a) The required quorum in meetings of stockholders shall consist of the

stockholder/s representing a majority of the outstanding capital stock.

IV. THE FORM FOR PROXIES OF STOCKHOLDERS AND THE MANNER OF VOTING
THEM

a) Stockholders may vote in person or by proxy in all meetings of stockholders.

Proxies shall be in writing, signed by the stockholder and filed before the
scheduled meeting with the corporate secretary. Unless otherwise provided
in the proxy, it shall be valid only for the meeting for which it is intended. No
proxy shall be valid and effective for a period longer than five (5) years at any
one time.

V. THE QUALIFICATIONS, DUTIES, TERM AND COMPENSATION OF DIRECTORS

a) No person convicted by final judgment of an offense punishable by

imprisonment for a period exceeding six (6) years, or a violation of this Code,
committed within five (5) years prior to the date of his election shall qualify
as a director. Every director must own at least one (1) share of the capital
stock of the corporation, which share shall stand in his name on the books of
the corporation. Any director who ceases to be the owner of at least one (1)
share of the capital stock of the corporation shall thereby cease to be a
director. A majority of the directors must be residents of the Philippines.

b) The corporate powers of the corporation shall be exercised, all business

conducted and all property of the corporation be controlled and held by the
board of directors to be elected from among the holders of stocks, who shall
hold office for one (1) year and until their successors are elected and
qualified.

c) The directors shall not receive any compensation, as such directors, except
for reasonable per diems. Any compensation may be granted to directors by
the vote of the stockholders representing at least a majority of the
outstanding capital stock at a regular or special stockholders’ meeting, In no
case shall the total yearly compensation of directors, as such directors,
exceed ten (10%) percent of the net income before income tax of the
corporation during the preceding year.

VI. THE MANNER OF ELECTION OR APPOINTMENT, QUALIFICATION AND THE

TERM OF OFFICE OF ALL OFFICERS OTHER THAN DIRECTORS
 a) Immediately after their election, the directors of a corporation must formally
organize by the election of a PRESIDENT, who shall be a director, a
TREASURER who may or may not be a director, a SECRETARY who shall be a
resident and citizen of the Philippines, and such other officers as may be
provided in the by-laws. Two (2) or more positions may be held concurrently
by the same officer, however no one shall act as PRESIDENT and SECRETARY
or as PRESIDENT and TREASURER at the same time. The officers of the
corporation shall hold office for one (1) year and until the successors are
elected and qualified. The officers of the corporation shall perform functions
as required by existing laws, rules and regulations.

VII. FISCAL YEAR

a) The fiscal year of the corporation shall begin on the first day of January
and end on the last day of December of each year.

VIII. SEAL

a) The corporate seal shall be determined by the Board of Directors.

IX. MISCELLANEOUS PROVISIONS:

a) Matters not covered by the provisions of these by-laws shall be governed by

the provisions of the Corporation Code of the Philippines.

IN WITNESS WHEREOF, we, the undersigned incorporators and/or stockholders

present at said meeting and voting thereat in favor of the adoption of said by-laws, have
hereunto subscribed our names this _________ day of _____________ at
__________________________________.

2019 Sample Articles of Incorporation Natural Person

SAMPLE ONLY FOR A ONE PERSON CORPORATION

WITH A SINGLE STOCKHOLDER WHO IS A NATURAL PERSON

Nominee: ________________ ________________ ________________

Alternate: ________________ ________________ ________________

 Seventh: That the authorized capital stock of the OPC is ______________
Pesos (P____________), divided into ____________ shares with par value of
_____________________ Pesos (P_______) per share.

(In case all the shares are without par value): That the capital stock of the
OPC is _____________ shares without par value.

(In case some shares have par value and some are without par value): That
the capital stock of said corporation consists of __________ shares, of which
__________ shares have a par value of ________________ Pesos (P________)
each, and of which ____________ shares are without par value.

Eighth: That the number of shares of the authorized capital stock above-
stated has been subscribed as follows:

Name of Nationality No. of Shares Amount Amount Paid

Subscriber Subscribed Subscribed

__________ ___________ ___________ ___________ ___________

Ninth: a) That as self-appointed treasurer of the OPC, I acknowledge to have

received in the name and for the benefit of the corporation, all subscriptions paid or
given by the subscriber, who certifies the information set forth in the seventh and
eighth clauses above, and that the paid-up portion of the subscription in cash and/or
property has been duly received for the benefit and credit of the corporation, and that
I shall faithfully administer the corporation’s funds to be received as Treasurer, and
to disburse and invest the same in accordance with law and these Articles of
Incorporation;

Or:

b) That as Treasurer of the OPC, I acknowledge to have received in the name

and for the benefit of the corporation, all subscriptions paid or given by the
subscriber, who certifies the information set forth in the seventh and eighth clauses
above, and that the paid-up portion of the subscription in cash and/or property has
been duly received for the benefit and credit of the corporation, and that I shall
faithfully administer the OPC’s funds to be received as Treasurer, and to disburse
and invest the same in accordance with law and these Articles of Incorporation;

Or:

c) That within fifteen (15) days from the issuance of its certificate of
incorporation, the OPC shall appoint a treasurer and notify the Commission thereof
within five (5) days from appointment.

Choose only the applicable paragraph, i.e. a) if the single stockholder acts as
the treasurer; b) if another person has been appointed as treasurer; and c) if the
single stockholder has yet but commits to appoint a treasurer after receipt of the
certificate of incorporation.
 Tenth: That I undertake to change the name of the OPC immediately upon
receipt of notice from the Commission that another corporation, partnership or
person has acquired a prior right to the use of such name, that the name has been
declared not distinguishable from a name already registered or reserved for the use
of another corporation, or that it is contrary to law, public morals, good customs or
public policy.

Eleventh: That no transfer of stock or interest which shall reduce the

ownership of Filipino citizens to less than the required percentage of capital stock as
provided by existing laws shall be allowed or permitted to be recorded in the proper
books of the OPC, and this restriction shall be indicated in all stock certificates
issued by the corporation.

Twelfth: That the fiscal year of the OPC shall begin on the __________ day of
____________ and shall end on the __________ day of ____________of each year.
(If not stated in the Articles of Incorporation, it is understood that the fiscal year of
said corporation follows the calendar year.)

IN WITNESS WHEREOF, I have hereunto signed these Articles of

Incorporation, this __________ day of ____________, 20________ in the
City/Municipality of ___________________, Province of ______________________,
Republic of the Philippines.

_______________________________________
(Name and signature of the incorporator)
TIN: __________________________

________________________________________
(Name and signature of the treasurer)
TIN: __________________________

Nominee and alternate nominee need not sign the Articles of Incorporation
but written consent of the nominee and alternate nominee shall be attached to the
application for incorporation. Such consent may be withdrawn in writing any time
before the death or incapacity of the single shareholder.
 ACKNOWLEDGEMENT

REPUBLIC OF THE PHILIPPINES)

S.S)

BEFORE ME, a Notary Public, for and in __________________, Philippines,

this ___________ day of _______________, 2019, personally appeared the
following persons:

Name

TIN/ Passport No.

Date and Place Issue

known to me and to me known to be the same persons who executed the
foregoing Articles of Incorporation constituting of ________ pages, including
this page where the acknowledgement is written, and they acknowledged to
me that the same is their free act and voluntary deed.

WITNESS MY HAND AND SEAL on the day first above-written.

NOTARY PUBLIC

Doc. No. ______;

Page No. ______;
Book No. ______;
Series of ______.

Salient Changes under the Revised Corporation Code

Republic Act No. 11232, otherwise known as the “Revised Corporation Code of the
Philippines” or “RCC”, was signed into law by President Rodrigo Duterte on 20
February 2019. The RCC took effect on 23 February 2019, following the completion
of its publication in the Manila Bulletin and the Business Mirror. The new law
updates the almost 39-year old Corporation Code of the Philippines with the aim of
improving the ease of doing business in the country. Existing corporations affected by
the new requirements of the RCC are given a period of two (2) years to comply (Sec.
185).

Some of the salient amendments to the Corporation Code include:

1. Organization of Corporations

The RCC removed the absolute requirement of having a minimum of five (5)
individuals in the formation of corporations.

The RCC removed the absolute requirement of having a minimum of 5 individuals in

the formation of corporations (Sec. 10). The law now allows the establishment of a
One-Person Corporation (OPC) composed of a single shareholder, who may be a
natural person, a trust or an estate. A shareholder may acquire all the stocks of an
ordinary stock corporation and apply for the conversion thereof into an OPC. In terms
of liability, the single shareholder claiming limited liability has the burden of
affirmatively showing that the corporation was adequately financed (Sec. 115, 116,
130, 131).

Stock corporations are still not required to have a minimum capital stock, unless
specifically provided by special law. Notably, in the revised form of the Articles of
Incorporation (AOI), it is no longer required that the capitalization be in “lawful
money of the Philippines” (Sec. 14). Moreover, the RCC removed the requirement
that 25% of the authorized capital stock be subscribed and that 25% of the subscribed
capital stock be paid for purposes of incorporation as previously mandated under
Section 13 of the Corporation Code, which was deleted in its entirety (Sec. 12).
However, the 25%-25% requirement was retained for any increase in the authorized
capital stock (Sec. 27).

The corporate term limit of 50 years has been removed such that a corporation can
now enjoy perpetual existence unless expressly limited by its AOI. Such perpetual
corporate term shall also apply to corporations incorporated prior to the RCC, unless
said corporations elect to retain a specific corporate term. The new law also states that
a corporation whose term has expired can apply with the Securities and Exchange
Commission (SEC) for the revival of its corporate existence, with all the rights and
privileges under its certificate of incorporation and subject to all of its duties, debts
and liabilities existing prior to its revival. Upon the SEC’s approval, the corporation
shall be deemed revived and a certificate of revival of corporate existence shall be
issued giving it perpetual existence, unless its application for revival provides
otherwise (Sec. 11). The RCC also extends the allowable period for non-use of
corporate charter from 2 years to 5 years from the date of incorporation. The
certificate of incorporation shall be deemed revoked as of the day following the end of
the 5-year period. Meanwhile, a corporation which has commenced its business but
subsequently becomes inoperative for a period of at least 5 years may be deemed a
delinquent corporation and shall have a period of 2 years to resume operations.
Failure to resume operations within the period given by the SEC shall cause the
revocation of its certificate of incorporation (Sec. 21).

2. New Classifications of “Corporations Vested with Public Interest”

In lieu of the expansion of application of the system of Independent Directors under

the Securities Regulation Code (SRC), the RCC has classified the following
corporations vested with public interest, whose board shall have independent directors
constituting at least 20% of such board:

a. Publicly-held corporations under the SRC whose securities are registered with the
SEC, corporations listed with an exchange or with assets of at least P50,000,000.00
and having 200 or more holders of shares, each holding at least 100 shares of a class
of its equity shares;

b. Banks and quasi-banks, non-stock savings and loan associations, pawnshops,

corporations engaged in money service business, preneed, trust and insurance
companies, and other financial intermediaries; and

c. Other corporations engaged in businesses vested with public interest similar to the
above, as may be determined by the SEC.

3. Board of Directors/Trustees

With the introduction of the OPC, the minimum number of directors to incorporate is
reduced from 5 to 1, while the maximum is retained at 15 directors. For trustees,
however, the RCC has removed the maximum number which can be elected. Some of
the changes in the qualification and term of the board of director or trustees include
the removal of the residency requirement for a majority of the board and the extension
of the term of trustees from 1 year to 3 years (Sec. 22).

The new law allows stockholders or members, when authorized by the By-Laws or by
a majority of the board of directors, to vote through remote communication methods
or inabsentia. A stockholder or member who participates through remote
communication or inabsentia will still be considered present for purposes of
determining the existence of a quorum (Sec. 23).

The RCC empowers the SEC, unilaterally or upon a verified complaint, and after due
notice and hearing, to remove members of the Board of Directors/Trustees who are
determined to be disqualified to be elected to or to hold such position (Sec. 27).

When there is a vacancy in the Office of the Director/Trustee which prevents the
remaining directors from constituting a quorum and emergency action is required to
prevent irreparable loss or damage to the corporation, the remaining directors are
allowed to temporarily fill the vacancy from among the officers of the corporation,
thereby constituting an emergency board, subject to certain requirements (Sec. 28).

4. Corporate Officers

The RCC mandates a corporation vested with public interest to appoint a Compliance
Officer, in addition to the mandatory positions of President, Treasurer and Corporate
Secretary. The law now also expressly requires that the Treasurer be a resident of the
Philippines (Sec. 24).

The election or non-holding of election of the directors, trustees and officers of the
corporation is required to be reported to the SEC, which is empowered under certain
conditions to summarily order that an election be held (Sec. 25).

5. Corporate Powers

Under Section 35 of the RCC, additional powers are expressly granted to

corporations, namely: the power to enter into a partnership, joint venture or any other
commercial agreement with a natural person or another corporation [Sec. 35 (h)]; and,
for domestic corporations, the power to donate to a political party or candidate or for
purposes of partisan political activity [Sec. 35 (j)].

6. Shareholder Actions

The RCC now provides that if the date of the regular meeting of the stockholders or
members is not fixed in the By-Laws, the same shall be held on any date after April
15 of every year as determined by the Board of Directors/Trustees. Written notices of
regular meetings may now be sent to stockholders and members through electronic
mail and such other means as may be allowed by the SEC. The right of stockholders
or members to vote may now also be exercised through remote communication or in
absentia, under rules and regulations to be issued by the SEC governing participation
and voting through remote communication or in absentia, taking into account the
company’s scale, number of shareholders or members, structure, and other factors
consistent with the protection and promotion of shareholders’ or members’ meetings
(Sec. 49 and 57).

The law also allows an arbitration agreement to be included in the AOI or By-Laws of
a corporation (Sec. 181).

7. Corporate Books and Records

If the corporation denies or does not act on a demand for inspection and/or
reproduction of corporate records, the aggrieved stockholder or member may report
such denial or inaction to the SEC, which shall, within 5 days from receipt of such
report, conduct a summary investigation and issue an order directing the inspection or
reproduction of the requested records. This right to inspect is expressly made subject
to confidentiality rules under prevailing laws (Sec. 73).

With regard to the financial statements of a corporation, the RCC provides that if the
paid-up capital of the corporation is less than P600,000.00 or such other amount as
may be determined appropriate by the Department of Finance, the financial statements
may be certified under oath by the President and the Treasurer, and need not be
certified by an independent certified public accountant (Sec. 74).

8. Foreign Corporations

The new law provides that within 60 days from issuance by the SEC of a license to
transact business to a branch office of a foreign corporation, said branch must deposit
acceptable securities to the SEC with an actual market value of at least P500,000.00
for the benefit of present and future creditors of the licensee. In addition, within 6
months after the fiscal year of the licensee, the SEC may require the licensee to
deposit additional securities or financial instruments equivalent in market value to 2%
of the amount by which the licensee’s gross income exceeds P10,000,000.00 (Sec.
143).

A domestic corporation who acts as a resident agent of a foreign corporation must be

of sound financial standing and must show proof that it is in good standing as certified
by the SEC (Sec. 144).

9.Investigations, Offenses and Penalties

Under the new law, jurisdiction over party-list organizations is transferred from the
SEC to the Commission on Elections (COMELEC), subject to the implementing rules
to be jointly promulgated by the SEC and the COMELEC (Sec. 182).

The RCC also enumerates the various specific offenses and their corresponding
penalties, with special emphasis on fraud and graft and corrupt practices:

a. Unauthorized Use of Corporate Name (Sec. 159);

b. Violation of Disqualification Provision (Sec. 160);
c. Violation of Duty to Maintain Records, to Allow Inspection or Reproduction (Sec.
161);
d. Willful Certification of Incomplete, Inaccurate, False or Misleading Statements or
 Reports (Sec. 162);
e. Independent Auditor Collusion (Sec. 163);
f. Obtaining Corporate Registration Through Fraud (Sec. 164);
g. Fraudulent Conduct of Business (Sec. 165);
h. Acting as Intermediaries for Graft and Corrupt Practices (Sec. 166);
i. Engaging Intermediaries for Graft and Corrupt Practices (Sec. 167);
j. Tolerating Graft and Corrupt Practices (Sec. 168);
k. Retaliation Against Whistleblowers (Sec. 169); and
l. Other Violations of the Code (Sec. 170).

10. Technological Updates

Aside from recognizing stockholder or member votes cast in absentia via remote
communication methods, the new law also allows the AOI and applications for
amendments thereto to be filed with the SEC in the form of electronic documents, in
accordance with the rules on electronic filing that the SEC will promulgate (Sec. 13).
The SEC is further mandated to implement an electronic filing and monitoring system
to expedite corporate name reservation and registration, incorporation, submission of
reports, notices and documents required by the RCC (Sec. 180).

six key provisions:

1: One Person Corporation

In the Philippines, 99% of businesses are small or micro-enterprises. With the new
code, they can now register their business under a new legal structure — the One
Person Corporation (OPC). Previously, at least five people were required to
incorporate, forcing many MSMEs to operate as Sole Proprietorships. The new code
allows a single person to form a corporation.

The primary advantage of an OPC is that a corporation has separate legal identity
from the business owner. The owner is liable to the extent they invest in company
shares. Personal assets are considered separate and protected from the liability of the
business.

According to SEC Chairperson, Emilio Aquino, “An OPC offers the agility and
complete dominion of a sole proprietorship and the limited liability of a corporation.”

Requirements for Registering an OPC

• The suffix “OPC” must be added to the end of the corporation’s name.
• The single stockholder is the sole president/director of the OPC.
• The single stockholder may also be the company treasurer.
• The single stockholder may not assume the position of company secretary.
• The single stockholder must appoint a nominee and alternate nominee in the case of
incapacity or death.
• The OPC shall file its Articles of Incorporation with the SEC.
• An existing corporation may apply to convert to an OPC after a single stockholder
acquires all outstanding stocks.
 2: Perpetuity

Coca Cola, JPMorgan, DuPont — some of the world’s most successful brands have
existed for hundreds of years. However, the former Philippine code imposed a
corporate lifetime of only 50 years. Companies could extend their life for periods not
exceeding 50 years.

The revised law allows corporations to exist in perpetuity unless their Articles of
Incorporation provides otherwise. Business owners no longer risk their company
closing down prematurely, allowing them to create long-term value and investments.

The perpetual corporate term applies to both aspiring and existing corporations. No
further paperwork is required for availment. Expired corporations can petition the
Securities and Exchange Commission (SEC) to revive their existence. The majority of
the former board members or trustees must be in agreement with the revival.
Corporations whose name is now being used by another company must file under a
new name. Any outstanding fines and liabilities must be paid before filing.

3: Online Registration System

To improve access and efficiency, the SEC is transitioning to an online registration

system. The Department of Information and Communications Technology (DICT) has
been charged with creating an online portal through which all business registrations
and related licenses and authorizations can be completed.

4: Remote Participation and Voting in Absentia

The revised code takes advantage of modern telecommunications. Notices of board

meetings may be sent electronically. Board members and trustees can use
videoconferencing, teleconferencing, and other technologies to participate in board
meetings remotely. Shareholders will also be allowed to vote in absentia.

5: Increased Security Deposit for Foreign Branch Offices

The minimum security deposit required for foreign corporations increased from Php
100,000 to Php 500,000. The deposit ensures international corporations can meet any
obligations or debts incurred in the Philippines.

Six months after the end of the fiscal year, additional securities may be required if:

• The company’s gross income for the fiscal year exceeds Php 10,000,000.
• The market value of the company’s initial deposit has decreased by more than 10%.

Corporations exempt from the security deposit include:

• Foreign banking corporations

• Foreign insurance corporations
• Foreign non-stock corporations
• Foreign corporations with established representative offices in the Philippines
• Regional headquarters, area headquarters, and regional operating headquarters of
multinational companies

6: Corporations Vested with Public Interest

Corporations vested with public interest are subject to additional regulation. The SEC
defines such corporations as:

• Those whose securities are registered with the SEC.

• Those listed with an exchange.
• Corporations with assets of at least Php 50 million and having 200 or more holders of
shares.
• Financial institutions such as banks, quasi-banks, non-stock savings and loan
associations, pawnshops, money service businesses, preneed, trust and insurance
companies, and financial intermediaries.

Corporations vested with public interest must elect a Compliance Officer. Additional
annual reports must be filed with the SEC, such as director compensation and
performance reports. Stockholders have an absolute right to vote in board elections,
either remotely or in absentia. At least 20% of the board must be independent.

Better Governance under the Revised Corporation Code

The RCC updates the old Corporation Code and makes it at par with international
standards. The creation of the One Person Corporation and corporate perpetuity make
it easier for foreign and Filipino entrepreneurs to enter the local market. The RCC
also establishes greater protections for shareholders.

Senate Minority Leader Frank Drilon, a sponsor of the bill stated, “The passage into
law of this measure is critical in our bid to improve the country’s business climate and
make our economy more competitive with the rest of the world.”

The government would like to remind all corporations that they have two years to
become compliant with the law.