(Eagle News) — President Rodrigo Duterte signed on Wednesday, Feb. 20, the Revised Corporation Code which allows the registration of a “one-person corporation” and removing the requirement for the minimum number of five incorporators, among others.
The Revised Corporation Code, which amended the 38-year old Corporation Code, aims to strengthen and simplify corporate governance standards for a more business-friendly environment amidst the drop in the country’s rank in the latest Ease of Doing Business Report of the World Bank.
“I am pleased to be with you today, in coordination with concerned agencies, in facilitating the passage of the key legislative measures which would further support this administration’s development agenda for inclusive growth where no one will be left behind,” President Duterte remarked at the Rizal Hall on Wednesday where he also signed several other significant laws including the Universal Health Care Act.
The other laws signed that day also included the Social Security Act of 2018, Philippines Sports Training Center Act, An Act Providing for the Reapportionment of the Province of Southern Leyte into Two Legislative Districts, and The New Central Bank Act as well as the presentation of the Bangko Sentral ng Pilipinas (BSP) dividends at the Malacañan Palace on February 20, 2019.
-“One-person corporation” now allowed-
Senator Franklin Drilon, the principal sponsor and author of Senate Bill No. 1280 which amended the decades-old Corporation Code of the Philippines, earlier said that the Revised Corporation Code would improve ease of doing business in the country by allowing a one-person corporation.
It also removed the minimum capital requirement and providing for perpetual existence of corporation.
“One of our difficulties today is our laws have not been updated. As a result, in terms of our ranking in the ease of doing business we are lagging behind, especially in the areas of starting a business where the country was ranked 166th,” Drilon said in November last year when the bicam reconciled House and Senate versions of the bill
He said that it was too difficult to open a business in the country under the old law due to numerous and stringent incorporation and regulatory requirements, which discouraged investors and Filipino entrepreneurs to enter the local market.
With the new code allowing a one-person corporation, Drilon said local business owners and investors could already stop the practice of naming their entire household as incorporators simply to comply with the stringent requirement of the law.
Noting that the current business environment makes it hard for corporations and individual business owners to avail loans, as indicated in the country scoring only 5 (184th place) on the “getting credit” indicator of the World Bank the Philippines,
Drilon said the new code allows a one-person corporation to avail of loans and grants.
With the signing of the bill into law, all existing and future corporations are deemed to have perpetual lives,
The new code also 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.
The amended Corporation Code will strengthen corporate governance standards and provide protection to minority stockholders by requiring, among others, corporations vested with public interest to have independent directors.
Drilon also earlier said that the Philippines would now be able to catch up with its neighboring countries with the signing of the bill into law.