What Is Articles of Incorporation Philippines

Articles of Incorporation are legal documents that establish and govern a corporation in the Philippines. These articles outline the company’s name, purpose, shareholders, directors, and other important details necessary to run and operate the corporation.

Key Takeaways:

• Articles of Incorporation are legal documents that establish and govern a corporation in the Philippines.
• They outline the company’s name, purpose, shareholders, directors, and other important details.
• It is required by law for a corporation to have Articles of Incorporation.

An Articles of Incorporation serves as the foundation and legal framework for a corporation, defining its rights, responsibilities, and structure.

Requirements for Articles of Incorporation

In the Philippines, there are specific requirements that must be met when drafting the Articles of Incorporation. These requirements help ensure that the corporation operates legally and adheres to government regulations. Some of the key elements that must be included in the Articles of Incorporation are:

1. Corporate Name: It is important to choose a unique name that is not already registered with the Securities and Exchange Commission (SEC).
2. Statement of Purpose: This section describes the primary activities and objectives of the corporation. It should be clear and concise.
3. Shareholders: The names and addresses of the shareholders must be listed.
4. Directors and Officers: The names and addresses of the directors and officers, who will manage the corporation, should be provided.
5. Authorized Capital Stock: This refers to the maximum number of shares that the corporation can issue.
6. Term of Existence: The duration of the corporation’s existence should be specified.
7. Registered Address: The physical address where the corporation will be located must be provided.

The Articles of Incorporation outline the fundamental aspects of a corporation, such as its purpose, structure, and governance.

Benefits of Articles of Incorporation

Having Articles of Incorporation provides several benefits to corporations operating in the Philippines:

• Legal Recognition: By registering with the SEC and having Articles of Incorporation, the corporation gains legal recognition.
• Protection of Personal Assets: Shareholders’ personal assets are protected by the limited liability feature of the corporation.
• Enhances Credibility: A corporation is often seen as more credible and trustworthy than other business entities.
• Separate Legal Entity: A corporation is considered a separate legal entity from its shareholders, allowing it to enter into contracts, acquire assets, and sue or be sued in its own name.

Through Articles of Incorporation, a corporation can establish its legal identity, credibility, and separate status from its shareholders.

Requirements for Amendments

There may be instances where the corporation needs to make amendments to its Articles of Incorporation. These amendments can include changes to the authorized capital stock, business address, or even the purpose of the corporation. To make amendments, the corporation must follow these steps:

1. Board Resolution: The board of directors must pass a resolution approving the proposed amendment.
2. Shareholder Approval: A majority of the shareholders must approve the amendment in a meeting.
3. Submission to SEC: The amended Articles of Incorporation, along with the required documents, must be submitted to the SEC for approval.
4. SEC Approval: Upon review, if the SEC finds the amended articles to be in compliance with the law, it will issue a Certificate of Amendment.

Amendments to the Articles of Incorporation require board and shareholder approval, along with submission to and approval from the SEC.

Tables:

Interesting Facts:

• The Philippines has seen a steady increase in the number of registered corporations in recent years.
• In 2018, there were over 32,000 registered corporations in the country.

Table: Types of Corporations

The number of registered corporations in the Philippines has been steadily increasing, with stock corporations being the most common type.

Incorporate Your Business Today

If you are planning to start a corporation in the Philippines, it is crucial to understand the importance of the Articles of Incorporation. These documents provide the legal framework and protection needed for operating a corporation. By following the necessary steps and requirements, you can establish your business and enjoy the benefits that come with being a registered corporation.

Take the necessary steps to incorporate your business in the Philippines and unlock the benefits of being a registered corporation.

Common Misconceptions

1. Articles of Incorporation are only required for large corporations

One common misconception people have is that Articles of Incorporation are only necessary for large corporations or businesses. However, this is not true. In the Philippines, every corporation, regardless of its size, is required by law to draft and submit Articles of Incorporation to the Securities and Exchange Commission (SEC).

• Small businesses are exempt from the Article of Incorporation requirement
• Only large corporations need to submit Articles of Incorporation according to the law
• Articles of Incorporation is a hassle and unnecessary for small businesses

2. Articles of Incorporation can be created without legal assistance

Another misconception is that anyone can create Articles of Incorporation without seeking legal assistance. While it is true that individuals can draft their own Articles of Incorporation, it is highly recommended to consult with a lawyer or corporate secretary due to the legal complexities and specific requirements involved.

• Legal assistance is costly and unnecessary for creating Articles of Incorporation
• Anyone can create their own Articles of Incorporation without any legal knowledge
• There are no legal consequences for improperly drafted Articles of Incorporation

3. Articles of Incorporation are the same for all types of corporations

Many people mistakenly believe that Articles of Incorporation are the same for all types of corporations. In reality, the content and specific details included in the Articles of Incorporation can vary depending on the type of corporation being formed, such as stock or non-stock corporations, partnerships, or sole proprietorships.

• There is a one-size-fits-all template for Articles of Incorporation
• All corporations use the same standard Articles of Incorporation
• The type of corporation does not affect the content of the Articles of Incorporation

4. Articles of Incorporation only include basic information about the corporation

Some individuals believe that Articles of Incorporation only contain basic information about the corporation, such as its name and address. However, Articles of Incorporation also include crucial details like the purpose of the corporation, its authorized capital stock, the names of the incorporators, and the number of directors or trustees.

• Articles of Incorporation is a simple one-page document with minimal details
• Only the name and address of the corporation are included in the Articles of Incorporation
• The content of the Articles of Incorporation is not significant for legal purposes

5. Articles of Incorporation cannot be amended or updated

Lastly, some people mistakenly believe that Articles of Incorporation cannot be amended or updated once they are filed with the SEC. However, in the Philippines, corporations have the option to amend or update their Articles of Incorporation through a formal process, which may involve filing the necessary documents and obtaining the approval of the SEC.

• Amending Articles of Incorporation is a difficult and time-consuming process
• Once filed, Articles of Incorporation remain unchangeable forever
• The SEC does not allow any modifications to the Articles of Incorporation

What Is Articles of Incorporation Philippines

The Articles of Incorporation is a legal document that establishes a corporation in the Philippines. It serves as the primary governing document for the company and outlines its basic information, purpose, capital structure, and regulations. Here are 10 interesting tables that provide insights into the requirements, processes, and statistics regarding the Articles of Incorporation in the Philippines.

Table: Types of Corporations in the Philippines

This table illustrates the different types of corporations that can be formed in the Philippines, each with its own specific characteristics and requirements.

| Corporation Type | Definition |
|——————|————|
| Stock Corporation| A corporation with capital stock divided into shares of stock |
| Non-stock Corporation | A corporation formed for purposes other than profit |
| One Person Corporation | A corporation with a single stockholder |

Table: Requirements for Articles of Incorporation

This table outlines the essential requirements for drafting and filing the Articles of Incorporation in the Philippines.

| Requirement | Description |
|————-|————-|
| Corporate Name | The desired name of the corporation, which should not be similar to other existing entities |
| Purpose | The primary objective or activities the corporation intends to engage in |
| Principal Office | The official address of the corporation’s principal office |
| Names and Nationalities | Names, nationalities, and residential addresses of incorporators and directors |
| Authorized Capital Stock | The total amount of shares that the corporation is authorized to issue |
| Treasurer’s Affidavit | A sworn statement declaring that at least 25% of the authorized capital stock has been subscribed and at least 25% has been paid |

Table: Steps in Registering Articles of Incorporation

This table provides a step-by-step guide on the process of registering Articles of Incorporation in the Philippines.

| Step | Description |
|——|————-|
| Name Verification | Verify the availability and uniqueness of the desired corporate name through the Securities and Exchange Commission (SEC) |
| Prepare the Documents | Prepare the necessary documents, including the Articles of Incorporation and the Treasurer’s Affidavit |
| Notarize and Submit | Notarize the documents and submit them to the SEC for evaluation |
| Pay the Filing Fees | Pay the required filing fees at the SEC cashier |
| Receive Certification | Once approved, receive the Certificate of Incorporation from the SEC |

Table: Comparison of Paid-Up Capital vs. Authorized Capital

This table compares and contrasts the concepts of paid-up capital and authorized capital, highlighting the differences between the two.

| Characteristic | Paid-Up Capital | Authorized Capital |
|—————-|—————-|——————–|
| Definition | The portion of the authorized capital stock that has been fully subscribed and paid by shareholders. | The total amount of capital stock a corporation is authorized to issue. |
| Importance | Represents the actual funds contributed by shareholders for the corporation’s use. | Sets the ceiling for the corporation’s borrowing capacity and equates to the maximum value of shares the corporation can issue. |

Table: Foreign Ownership Restrictions

This table showcases the limitations and restrictions on foreign ownership in certain industries or sectors within the Philippines.

| Industry/Sector | Foreign Ownership Limitations |
|—————–|—————————–|
| Media | Limited to 100% Filipino ownership |
| Retail Trade | Limited to 100% Filipino ownership, with exceptions for certain financial thresholds |
| Education | Limited to 60% Filipino ownership |
| Advertising | Limited to 30% foreign ownership |

Table: Benefits of Incorporating in the Philippines

This table outlines the advantages and benefits that corporations can enjoy by incorporating in the Philippines.

| Benefit | Description |
|———|————-|
| Limited Liability | Shareholders enjoy limited liability, protecting personal assets |
| Separate Legal Entity | The corporation has a separate juridical personality distinct from its owners |
| Continuity | The corporation’s existence is not affected by changes in incorporators or stockholders |
| Tax Incentives | The Philippines offers various tax incentives and benefits to registered corporations |
| Access to Funding | Incorporated entities have increased access to financing and investment opportunities |

Table: Corporations Registered in the Philippines (2021)

This table presents statistics on the number of corporations registered in the Philippines in the year 2021, categorized by sector.

| Sector | Number of Corporations |
|———————–|———————–|
| Service | 20,264 |
| Wholesale and Retail Trade | 11,350 |
| Manufacturing | 5,679 |
| Financial Intermediation | 4,823 |
| Real Estate | 3,712 |
| Construction | 3,289 |
| Others | 9,013 |

Table: Percentage of Women-Owned Corporations (2021)

This table highlights the percentage of corporations in the Philippines that are owned or co-owned by women, affirming their growing participation in the business sector in recent years.

| Year | Percentage |
|——|————|
| 2017 | 14.3% |
| 2018 | 18.6% |
| 2019 | 21.2% |
| 2020 | 23.8% |
| 2021 | 27.4% |

Table: Top Five Industries with Most Registered Corporations (2021)

This table showcases the top five industries that witnessed the highest number of registered corporations in the Philippines in the year 2021.

| Industry | Number of Corporations |
|———————–|———————–|
| Retail Trade | 7,925 |
| Real Estate | 5,512 |
| Service | 4,823 |
| Manufacturing | 3,234 |
| Construction | 2,190 |

Conclusion

The Articles of Incorporation is a crucial document that formalizes the establishment of a corporation in the Philippines. This article provided valuable insights through 10 informative and interesting tables, covering various aspects such as corporation types, requirements, registration process, ownership restrictions, benefits of incorporation, industry statistics, gender representation, and more. Understanding the intricacies and details of Articles of Incorporation aids in fostering a conducive business environment and promoting corporate governance in the country.

Frequently Asked Questions

What are Articles of Incorporation?

Articles of Incorporation are legal documents that establish a corporation and outline its purpose, structure, and governing rules.

Why do I need to file Articles of Incorporation in the Philippines?

Filing Articles of Incorporation is a mandatory requirement for incorporating a corporation in the Philippines. It legally establishes the existence of the corporation and ensures compliance with Philippine laws.

What information is required in the Articles of Incorporation?

The Articles of Incorporation in the Philippines typically require information such as the corporation’s name, address, purpose, authorized capital stock, names and addresses of incorporators and directors, and any additional provisions or clauses deemed necessary.

Can I prepare the Articles of Incorporation by myself?

While it is possible to prepare the Articles of Incorporation by yourself, it is recommended to seek professional assistance from a lawyer or corporate service provider to ensure compliance with all legal requirements and avoid potential errors or omissions.

Is there a specific format for the Articles of Incorporation?

Yes, the Securities and Exchange Commission (SEC) of the Philippines has a prescribed format for the Articles of Incorporation. It is important to follow this format to ensure proper filing and acceptance of the document.

How much does it cost to file Articles of Incorporation in the Philippines?

The cost of filing Articles of Incorporation in the Philippines varies depending on the authorized capital stock of the corporation. The fees are typically based on a sliding scale determined by the SEC.

What is the process for filing Articles of Incorporation?

The process involves drafting the Articles of Incorporation, obtaining the necessary signatures from incorporators and directors, notarizing the document, and submitting it to the Securities and Exchange Commission (SEC) along with the required fees and supporting documents.

How long does it take to process the Articles of Incorporation?

The processing time for Articles of Incorporation in the Philippines may vary, but it generally takes around two to four weeks for the SEC to review and approve the document.

Can I make changes to the Articles of Incorporation after filing?

Yes, it is possible to make changes to the Articles of Incorporation after filing. However, this process requires submitting an amendment to the SEC and obtaining their approval.

What are the consequences of not filing Articles of Incorporation?

Failure to file Articles of Incorporation can result in legal consequences, such as the inability to avail of certain benefits and protections granted to registered corporations. Additionally, the corporation may not have the capacity to enter into contracts or pursue legal actions.