Republic Act 11232, or the Act Providing for the Revised Corporation Code of the Philippines, was signed into law by President Rodrigo R. Duterte on 21 February 2019. It amends a 38-year-old Corporation Code in an effort to improve the ease of doing business in the Philippines.
Following are some of the notable changes made in the Revised Corporation Code:
- INCORPORATORS: Removal of the minimum number of incorporators.
- MINIMUM CAPITAL STOCK: Imposition of a Php1,000,000.00 minimum capital stock on stock corporations. This effectively increases the minimum paid-up capital to Php62,500.00
- CORPORATE TERM: Removal of the fifty (50)-year corporate term. This means that unless there is a provision in the Articles of Incorporation with regard to the term of corporate existence, the corporation will exist perpetually unless sooner dissolved.
- ONE-PERSON CORPORATION: Allowance for a single person – whether natural or judicial, to organize and put up a corporation. However, this is subject to the requirement of a minimum capital stock of Php1,000,000.00 to b paid up in a lump sum at the time of incorporation.
- CORPORATE OFFICERS: Chief Executive Officer is made the alternative title to President and Chief Financial Officer is made the alternative title to Treasurer. Also, the inclusion of Compliance Officer as a mandatory corporate officer on top of the President/CEO, Treasurer/CFO, and Corporate Secretary.
- BOARD MEETINGS: Allowance of remote communication methods in attending board meetings subject to provisions of corporate by-laws.
- NATIONALITY OF A CORPORATION: Formalization of the test in determining the nationality of a corporation, i.e. the control test.
- REMOVAL OF A MEMBER OF THE BOARD OF DIRECTORS OR TRUSTEES: Empowering the Securities and Exchange Commission (SEC) to remove disqualified members of the Board of Directors or Trustees.
- DIGITAL MEANS: The new code introduces provisions that permit the electronic filing of reportorial requirements and attendance in meetings via remote communication or in absentia, among others – practices that were not recognized in the old law.
For the full text of the law, please see the PDF document from the Oficial Gazette website.