Startup Guide: Articles of Incorporation 2 years ago

If a business owner wishes to establish a separate legal entity for their company, incorporation is the best and only course of action. 

 

A business owner has to register with the Securities and Exchange Commission (SEC), and one of the necessary incorporation requirements is the Articles of Incorporation. 

 

What is an Articles of Incorporation?

Bylaws are guidelines for running a corporation and making it easier to establish the responsibilities of its directors and officials – it minimizes uncertainty and guarantees that all legal requirements are followed. 

Articles of Incorporation work with By-Laws to constitute a business legal structure and should not contradict each other. It is a brief and concise document that you submit to the SEC to incorporate your business.

 

What are the requirements for registration under the SEC?

The requirements for SEC registration vary depending on the business entity you wish to register and the activities and ventures you intend to engage in–There will be a difference between stock and non-stock corporations.

 

But in general, the following are the standard requirements to obtain a Certificate of Registration from the SEC:

  • Business/Corporation name 

  • Primary & Secondary Purpose

  • Office address

  • Term and existence (usually 50 years)

  • Identities of incorporators

    • According to the Corporation Code, incorporators must consist of a minimum of five (5) and a maximum of fifteen (15) natural persons who are all of legal age and who each hold or are a subscriber of at least one (1) share of the corporation's capital stock.

  • Members of your company's board of directors & officers.

    • There should be at least five (5) and a maximum of 15 directors.

  • Amount of authorized shares and type of capital stock to be issued (For profit/stock corporation)

    • Must be expressed in Philippine Pesos, and the number of shares that make up that capital stock

  • Name and address of the Registered Agent for Your Corporation

  • Roll of attorney number

  • Taxpayer information (TIN) of the incorporators

 

Should the articles be notarized?

According to the Guidelines on Authentication of Articles of Incorporation in Applications for Registration of New Domestic Corporations under SEC Memorandum Circular No. 16, Series of 2020, there will no longer be a requirement for the articles of incorporation or the certificate of authentication to be notarized. But the incorporators have the option to sign the articles of incorporation in front of a notary public.

 

Note that to legally run a business, issue receipts, and be eligible for certain rights under the country's corporate laws, you must register with the appropriate agency. Read Incorporating a Company in the Philippines

 

How to amend this?

If one wishes to modify/change the corporate name, principal office address, directors, or corporation's purpose, etc. According to Sec. 16. Articles of incorporation amendment, any provision or substance contained in the articles of incorporation may be amended unless the Code or a particular law prohibits it and for lawful objectives.

 

The following three requirements must be fulfilled to amend the articles of incorporation:

  1. Can be amended by the board of trustees or directors with a majority vote.

  2. At least 2/3 of the outstanding capital stock must be represented by the written consent of the stockholders without affecting the appraisal right of opposing stockholders under the terms of the Code. If it is a non-stock corporation, the vote or written consent of at least two-thirds (2/3) of the members.

    • The following papers will be signed as evidence that these acts have been pursued and must be submitted to SEC:

      1. Resolution of the Stockholders 

      2. Board Resolution 

      3. Directors’ Certificate 

      4. Secretary’s Certificate

  3. Must receive approval from the Securities and Exchange Commission

 

If the amendment is about a secondary license from a governmental agency, then the endorsement or license from that agency must also be provided. 

 

While, If there is an increase in the authorized capital stock, a Treasurer's Affidavit and corresponding Bank Certificate must be presented to prove any increases.

 

All requirements mandated by law for the articles of incorporation must be found in both the original and amended articles.

 

The amendments will take effect when the Securities and Exchange Commission approves them or if action is not taken within six (6) months of the filing date for a reason unrelated to the corporation from the date of filing with the said Commission.


But if you are still confused, you may consult with an expert to be guided on the steps and processes you must take when establishing a business; you may check Digest.ph

Business Startup Contracts Corporation

AIC Grande Tower Garnet Road
Ortigas Center, Pasig City
Metro Manila Philippines

Mobile No. +639451244898
digestph@gmail.com
Please read our FAQ before contacting us.