Markable Solutions Philippines, Inc., founded by two US nationals and an Indian partner, became the first ordinary corporation organized by less than five incorporators as a beneficiary of the Republic Act 11232 or the Revised Corporation Code of the Philippines. On August 8, the company, which is into Business Process Outsourcing and IT services, received its Certificate of Incorporation from Securities and Exchange Commission (SEC).
According to the previous Corporation Code of the Philippines, a corporation/company can only be organized with a group of not less than five but not more than fifteen incorporators. Under the new Guidelines, under Memorandum Circular No. 16, Series of 2019, issued on 31 July, two or more persons, but not more than 15, may form a corporation. The SEC earlier issued guidelines on the establishment of a One Person Corporation, which is considered as a special corporation. The incorporators may be composed of any combination of natural persons, SEC-registered partnerships, SEC-registered domestic corporations or associations in good standing as well as foreign corporations. Partnerships, corporations or associations, however, will have to appoint natural persons who shall sign the articles of incorporation of the corporation being formed.
The inclusion of foreign nationals in the articles of incorporation shall be subject to the applicable constitutional, statutory, and regulatory restrictions, as well as conditions, with respect to foreign participation in certain investment areas or activities. Meanwhile, banks, banking and quasi-banking institutions, preneed, insurance and trust companies, nonstock savings and loan associations, pawnshops, and other financial intermediaries will have to secure favorable recommendations from the appropriate government agency before they could incorporate.
The following are the other essential revision points, rules and guidelines under Memorandum No. 16 :
Perpetual Existence – the previous Code only allowed companies a term limit of 50 years, unless extended. The Revised Code grants companies perpetual existence, unless term is specified in the Articles of Incorporation. This will apply both to new and previous companies which registered prior the effectivity of the new Code. A company, whose term has already expired, can also be revived with all rights and privileges by filing an application with the SEC.
Minimum Capital Stock – the new Code does not require a minimum capital stock compared to the old Code’s requirement of 25% with a minimum of PhP 5,000 (USD 95).
Incorporators, Directors, Trustees, and Officers – the Guidelines “allows for the creation of ordinary corporations by only two incorporators, which may now be composed of partnerships, corporations or associations aside from natural persons.”
(Sources: Securities and Exchange Commission, Philippines; BusinessWorld)