Section 115. Applicability of Provisions to One Person Corporations. – The provisions of this Title shall primarily apply to One Person Corporations. Other provisions of this Code apply suppletorily, except as otherwise provided in this Title.
Section 116. One Person Corporation. – A One Person Corporation is a corporation with a single stockholder: Provided, That only a natural person, trust, or an estate may form a One Person Corporation.
Banks and quasi-banks, preneed, trust, insurance, public and publicly-listed companies, and non-chartered government owned-and-controlled corporations may not incorporate as One Person Corporations: Provided, further, That a natural person who is license to exercise a profession may not organize as One Person Corporation for the purpose of exercising such profession except as otherwise provided under special laws.
Section 117. Minimum Capital Stock Not Required for One person Corporation. – A One Person Corporation shall not be required to have a minimum authorized capital stock except as otherwise provided by special law.
Section 118. Articles of Incorporation. – A One Person Corporation shall file articles of incorporation in accordance with the requirements under Section 14 of this Code. It shall likewise substantially contain the following:
(a) If the single stockholder is a trust or an estate, the name, nationality, and residence of the trustee, administrator, executor, guardian, conservator, custodian, or other person exercising fiduciary duties together with the proof of such authority to act on behalf of the trust or estate; and,
(b) Name, nationality, residence of the nominee and alternate nominee, and the extent, coverage and limitation of the authority.
Section 119. Bylaws. – The One Person Corporation is not required to submit and file corporate Bylaws.
Section 120. Display of Corporate Name. – A One Person Corporation shall indicate the letters “OPC” either below or at the end of its corporate name.
Section 121. Single Stockholder as Director, President. – The single stockholder shall be the sole director and president of the One Person Corporation.
Section 122. Treasurer, Corporate Secretary, and Other Officers. – Within fifteen (15) days from issuance of its certificate of incorporation, the One Person Corporation shall appoint a treasurer, corporate secretary, and other officers as it may deem necessary, and notify the Commission thereof within five (5) days from appointment.
The single stockholder may not be appointed as the corporate secretary.
A single stockholder who is likewise the self-appointed treasurer of the corporation shall five a bond to the Commission in such sum as may be required: Provided, That the said stockholder/treasurer shall undertake in writing to faithfully administer the One Person Corporation’s funds to be received as treasurer, and to disburse and invest the same according to the articles of incorporation as approved by the Commission. The bond shall be renewed every two (2) years or as often as may be required.
Section 123. Special Functions of the Corporate Secretary. – In addition to the functions designated by the One Person Corporation, the corporate secretary shall:
Section 124. Nominee and Alternate Nominee. – The single stockholder shall designate a nominee and an alternate nominee who shall, in the event of the single stockholder’s death or incapacity, take the place of the single stockholder as director and shall manage the corporation’s affairs.
The articles of incorporation shall state the names, residence address and contact details of the nominee and alternate nominee, as well as the extent and limitations of their authority in managing the affairs of the One Person Corporation.
The written consent of the nominee and alternate nominee shall be attached to the application for incorporation. Such consent may be withdrawn in writing any time before the death of the single stockholder.
Section 125. Term of Nominee and Alternate Nominee. – When the incapacity of the single stockholder is temporary, the nominee shall sit as director and manage the affairs of the One Person Corporation until the stockholder, by self determination, regains the capacity to assume such duties.
In case of death or permanent incapacity of the single stockholder, the nominee shall sit as director and manage the affairs of the One Person Corporation until the legal heirs of the single stockholder have been lawfully determined, and the heirs have designated one of them or have agreed that the estate shall be the single stockholder of the One Person Corporation.
The alternate nominee shall sit as director and manage the One Person Corporation in case of the nominee’s inability, incapacity, death, or refusal to discharge the functions as director and manager of the corporation, and only for the same term and under the same conditions applicable to the nominee.
Section 126. Change of the Nominee or Alternate Nominee. – The single stockholder may, at any time, change its nominee and alternate nominee by submitting to the Commission the names of the new nominees and their corresponding written consent. For this purpose, the articles of incorporation need not be amended.
Section 127. Minutes Book. – A One Person Corporation shall maintain a minutes book which shall contain all actions, decisions, and resolutions taken by the One Person Corporation.
Section 128. Records in Lieu of Meetings. – When action is needed on any mater, it shall be sufficient to prepare a written resolution, signed and dated by the single stockholder, and recorded in the minutes book of the One Person Corporation. The date of recording in the minute book shall be deemed to be the date of the meeting for all purposes under this Code.
Section 129. Reportorial Requirements. – The One Person Corporation shall submit the following within such period as the Commission may prescribe:
For purposes of this provision, the fiscal year of a One Person Corporation shall be that set forth in its articles of incorporation, or in the absence thereof, the calendar year.
The Commission may place the corporation under delinquent status should the corporation fail to submit the reportorial requirements three (3) times, consecutively or intermittently, within a period of five (5) years.
Section 130. Liability of Single Shareholder. – A sole shareholder claiming limited liability has the burden of affirmatively showing that the corporation is adequately financed.
Where the single stockholder cannot prove that the property of One Person Corporation is independent of the stockholder’s personal property, the stockholder shall be jointly and severally liable for the debts and other liabilities of the One Person Corporation.
The principles of piercing the corporate veil applies with equal force to the One person Corporations as with other corporations.
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 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 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 132. Conversion from a One Person Corporation to an Ordinary Stock Corporation. – A One Person Corporation may be converted into an ordinary stock corporation after due notice to the Commission of such fact and of the circumstances leading to the conversion, and after compliance with all other requirements for stock corporations under this Code and applicable rules. Such notice shall be filed with the Commission within sixty (60) days from the occurrence of the circumstances leading to the conversion into an ordinary stock corporation. If all the requirements have been complied with, the Commission shall issue a certificate of filing an amended articles of incorporation reflecting the conversion.
In case of death of the single stockholder, the nominee or alternative nominee shall transfer the shares to the duly designated legal heir or estate within seven (7) days from receipt of either an affidavit of heirship or self-adjudication executed by sole heir, or any other legal document declaring the legal heirs of the single stockholder and notify the Commission of the transfer. Within sixty (60) days from the transfer of shares, the legal heirs shall notify the Commission of their decision to either wind up and dissolve the One Person Corporation or convert it into an ordinary stock corporation.
The ordinary stock corporation converted from One Person Corporation shall succeed the latter and be legally responsible for all the latter’s outstanding liabilities as of the date of conversion.
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