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Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
AT A GLANCE:
Yes. When a single stockholder acquires all the stocks of an ordinary stock corporation, the latter may apply for conversion into a One Person Corporation (OPC), subject to submission of documents which the Securities and Exchange Commission may require. The OPC converted from an ordinary stock corporation shall succeed the latter and be legally responsible for all the latter’s outstanding liabilities as of the date of conversion. (Section 131, Revised Corporation Code)
In line with the policy supporting small and medium enterprises, the Revised Corporation Code introduced One Person Corporation. According to the new law, an ordinary corporation may be converted into a One Person Corporation.
The law says –
Section 131. Conversion from an Ordinary Corporation to a One Person Corporation. When a single stockholder acquires all the stocks of an ordinary stock corporation, the latter may apply for conversion into a One Person Corporation, subject to the submission of such documents as the Commission may require.
If the application for conversion is approved, the Commission shall issue a certificate of filing of amended articles of incorporation reflecting the conversion. The One Person Corporation converted from an ordinary stock corporation shall succeed the latter and be legally responsible for all the latter’s outstanding liabilities as of the date of conversion.
(Section 131, Revised Corporation Code)
The SEC released Memorandum Circular No. 27 setting out the guidelines for the conversion of Ordinary Stock Corporation to One Person Corporation, which provides that:
If a natural person of legal age, a trust or an estate has acquired all of the outstanding capital stocks of an OSC , with the corresponding Certificate Authorizing Registration/tax clearance having been issued by the BIR, the OSC may apply for conversion into an OPC by submitting the following, which shall be processed as an amendment of the Articles of Incorporation:
- Cover Sheet
- Application for Conversion of an Ordinary Stock Corporation to a One Person Corporation, signed by the single stockholder who has acquired all of the outstanding shares of the capital stock of an ordinary stock corporation and countersigned by the corporation’s corporate secretary in the form prescribed by SEC;
- Original or certified copy of the documents effecting the transfer of full title or ownership of shares and if applicable, certified true copy of proof of authority to act on behalf of the trust/estate;
- Certificate Authorizing Registration/tax clearance from the BIR ;
- Notarized Secretary’s Certificate of No Intra-Corporate Dispute;
- Articles of Incorporation of an OPC, filed in accordance with the SEC guidelines;
- Letter of acceptance of appointment by Nominee and Alternate Nominee;
- Self-appointed treasurer’s bond;
- Name reservation;
- Monitoring clearance from relevant department of the SEC or from CMD and CRMD;
- Endorsement clearance from appropriate government agencies;
- Undertaking to change corporate name;
- Undertaking to assume all liabilities of the ordinary stock corporation, duly executed under oath by the single stockholder of the OPC, if not yet included in the Articles of Incorporation.
The Certificate of filing amended Articles of Incorporation shall bear and retain the corporation’s original SEC Registration Number. Meanwhile, the name of the corporation shall have an “OPC” suffix in order to reflect its nature as a One Person Corporation.
Read also: One Person Corporation
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