News & Updates

The Securities and Exchange Commission (“SEC”) issued on 25 August 2020 SEC Memorandum Circular No. 27, Series of 2020 (“SEC MC 27”), which provides for the guidelines on the conversion from an Ordinary Stock Corporation (“OSC”) to a One Person Corporation (“OPC”), and the conversion from an OPC to an OSC, pursuant to Title XIII, Chapter III of Republic Act No. 11232, otherwise known as the Revised Corporation Code.

Conversion from Ordinary Stock Corporation to One Person Corporation

SEC MC 27 provides that if a natural person of legal age, a trust or an estate (“single stockholder”) has acquired all of the outstanding capital stock of an OSC, with the issuance of a Certificate Authorizing Registration/tax clearance by the Bureau of Internal Revenue (“BIR”), the OSC may apply for its conversion into an OPC, which shall be processed as an Amendment of the Articles of Incorporation (“AOI”). Accordingly, this type of conversion is deemed optional.

Below are the documentary requirements for the conversion from OSC to OPC:

1. Cover sheet;
2. Application for Conversion of an OSC to OPC, signed by the single stockholder and countersigned by the corporate secretary (Annex A of SEC MC 27);
3. Original or certified true copy of the documents effecting the transfer of full title/ownership of shares, or authority to act on behalf of the trust/estate, if applicable;
4. Certificate Authorizing Registration/Tax Clearance from BIR;
5. Notarized Secretary’s Certificate of No Intra-Corporate Dispute;
6. AOI of an OPC in the form prescribed under the SEC Guidelines on the Establishment of a One Person Corporation (“SEC Memorandum Circular No. 07, Series of 2019”), with the latest AOI of the OSC attached, and with the following provision added as a new article in the AOI of the OPC:

“Upon issuance by the Securities and Exchange Commission of the Certificate of Filing of Amended Articles of Incorporation, reflecting its conversion into a One Person Corporation, the attached Articles of Incorporation of the Ordinary Stock Corporation shall be deemed superseded.”;

7. Letter of Acceptance of Appointment by the Nominee and Alternate Nominee;
8. Self-appointed Treasurer’s Bond, if applicable;
9. Name reservation;
10. Monitoring clearance from SEC;
11. Endorsement clearance from appropriate government agencies, if applicable;
12. Undertaking to Change Corporate Name duly executed under oath by the single stockholder or the sole remaining director, if not yet in the AOI; and
13. Undertaking to Assume All Liabilities of the Ordinary Stock Corporation, duly executed under oath by the single stockholder of the OPC, if not yet in the AOI.

Upon issuance by the SEC of the Certificate of Filing of Amendment of AOI, the AOI and By-laws of the OSC shall be deemed superseded, with the date of said issuance being deemed as the date of approval of the conversion. The said Certificate shall bear and retain the corporation’s original SEC Registration Number, but the name of the corporation shall have an “OPC” suffix.

SEC MC 27 further provides that the OPC shall succeed the converted OSC and be legally responsible for the OSC’s outstanding liabilities as of the date of approval of the conversion.

Conversion from One Person Corporation to Ordinary Stock Corporation

When the shares in an OPC cease to be held solely by a single stockholder, the OPC may be converted into an OSC after due notice to the SEC of such facts and circumstances leading to the conversion, and after compliance with all the SEC’s requirements for a stock corporation. Accordingly, this type of conversion is deemed mandatory, unless dissolution is appropriate.

Below are the documentary requirements for the conversion from OPC to OSC:

1. Cover sheet;
2. Notice of Conversion of an OPC into an OSC, signed by all holders of shares of the outstanding capital stock, and countersigned by the corporate secretary (Annex B of SEC MC 27);
3. Original or certified true copy of the documents effecting the transfer of full title/ownership of shares;
4. Certificate Authorizing Registration/Tax Clearance from BIR;
5. AOI and By-laws of an OSC filed in accordance with Section 14 of the Revised Corporation Code, with a copy of the latest AOI of the OPC attached, and with the following provision added as a new article in the AOI of the OSC:

“Upon issuance by the Securities and Exchange Commission of the Certificate of Filing of Amended Articles of Incorporation and of Bylaws of this corporation, reflecting its conversion into an Ordinary Stock Corporation, the attached Articles of Incorporation of the One Person Corporation shall be deemed superseded.”;

6. Name reservation;
7. Monitoring clearance from SEC;
8. Endorsement clearance from appropriate government agencies, if applicable;
9. Undertaking to Change Corporate Name duly executed under oath by the authorized representative or director of the OSC, if not yet in the AOI; and
10. Undertaking to Assume All Liabilities of the One Person Corporation, duly executed under oath by all the stockholders of the OSC, if not yet in the AOI.

A Notice of Conversion of an OPC into an OSC shall be filed with the SEC within sixty (60) days from the transfer of shares, wherein there becomes at least two (2) stockholders in the OPC, regardless of whether the conversion will be applied for, or will take place, afterwards. For this purpose, the date of transfer of shares shall be deemed to be the date that the corresponding Certificate Authorizing Registration/ tax clearance is issued by the BIR. If the said Notice was filed beyond the 60-day period, the conversion of the OPC may still be approved, subject to the prior payment of penalties.

Upon issuance by the SEC of the Certificate of Filing of Amendment of AOI, the AOI and By-laws of the OPC shall be deemed superseded, with the date of said issuance being deemed as the date of approval of the conversion. The said Certificate shall bear and retain the corporation’s original SEC Registration Number, while the “OPC” suffix shall no longer form part of the corporation’s name.

Further, the OPC shall succeed the converted OPC and be legally responsible for all the OPC’s outstanding liabilities as of the date of conversion.

Provisions Applicable to Both Conversions

Signatories to the AOI of the converted corporation must clearly state that they voluntarily agreed to the conversion, in the following or similar manner:

“KNOW ALL MEN BY THESE PRESENTS:

The undersigned stockholder/s, of legal age, voluntarily agreed to convert a stock corporation under the laws of the Republic of the Philippines and certify the following”.

In case an opposition or dispute arises from the conversions, the aggrieved party may file before the SEC Company Registration and Monitoring Department (“SEC-CRMD”) a verified Petition for Cancellation of the certificate thus issued, on the ground of fraud in the procurement thereof.