The One Person Corporation allows the creation of a company with only one stockholder.
A One Person Corporation (OPC) is a new type of juridical entity created through the passage of R.A. No. 11232 or the Revised Corporation Code of the Philippines.
This came into effect on February 23, 2019.
An OPC is unique from a common corporation as it is created with only a single stockholder vs the five or more stockholders required of a common corporation.
An OPC is a distinct and separate entity from the sole stockholder. This allows the stockholder to be protected from corporate liability. This can be challenged in certain situations and generally a corporation has stronger liability protection.
As OPCs are relatively new in practice, their creation and provisions in the law are subject to different opinions and interpretations.
As you will see later on in this article, this interpretation can lead to certain issues.
An OPC can be sold and transferred to a new owner by transferring shares
Similar to that of a normal corporation, the stocks of the sole stockholder of the OPC can be transferred from one person to another.
The provisions of R.A. 11232 provide for the establishment of an OPC. These are specifically found in Chapter III, Sections 115 to 132.
The Securities and Exchange Commission (SEC) also issued Memorandum Circular No. 7, Series of 2019 which has a subject “Guidelines on the Establishment of a One Person Corporation.”
However, both are silent as to whether an OPC can be transferred to another person.
To answer this, we need to apply the rules of the other provisions of the Revised Corporation Code as a supplement to the rules on OPC.
Section 115 of the Revised Corporation Code provides that other provisions of the Revised Corporation Code apply suppletory, except as otherwise provided in the Title for OPC.
Thus, the applicable provision is Section 62 of Title VII, Stocks and Stockholders of the Revised Corporation Code.
Section 62 provides for the right of a stockholder to transfer his or her shares and the requirements that must be complied with for the transfer to be valid.
To transfer, the new owner or transferee must prepare a Deed of Assignment or Transfer of Stock or Interest.
A deed of assignment must be duly signed by both parties and notarized
The Deed must provide the information that the transferor is assigning his or her shares or stocks to the transferee. The number of the stocks or shares must be properly documented with the amount of the agreed valuation for the transfer.
This Deed will act as security for the transferee and will be a basis for the recording of the transfer or assignment in the books of the OPC.
In the case of Teng vs. SEC and Ting [1] , the Supreme Court of the Philippines acknowledged the execution of a deed of transfer of shares of stocks as prima facie proof of ownership of the transferee. This document was also used later on as the basis for recording the transfer of stocks in the books of the corporation.
To summarize, under Section 62 of the Revised Corporation Code, the following are required to have a proper transfer of stocks:
[1] G.R. No. 184332, February 17, 2016.
