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SEC drafting rules for incorporators


By James A. Loyola

The Securities and Exchange Commission (SEC) is drawing up new guidelines govern the organization of corporations by individuals, corporations, partnerships and associations.

sec new logo2

The Commission recently released the draft Guidelines on the Number and Qualifications of Incorporators under the Revised Corporation Code for public comment.

Under the proposed guidelines, the SEC will allow two or more persons, but not more than 15, to form a corporation. It earlier issued guidelines on the establishment of a One Person Corporation, which is considered as a special corporation under the Revised Corporation Code.

The incorporators may be composed of any combination of natural persons, SEC-registered partnerships, SEC-registered domestic corporations or associations in good standing as well as foreign corporations.

Partnerships, corporations or associations, however, will have to appoint natural persons who shall sign the articles of incorporation of the corporation being formed.

In the event that an SEC-registered partnership is made an incorporator, the application for registration must be accompanied by a partners’ affidavit, duly executed by all the partners, to the effect that they have authorized the partnership to invest in the corporation about to be formed and that they have designated one of the partners to become a signatory to the incorporation documents.

Meanwhile, an investment by an SEC-registered domestic corporation or association must be approved by a majority of the board of directors or trustees and ratified by the stockholders representing at least two-thirds of the outstanding capital stock, or at least two thirds of the members in the case of nonstock corporations, at a meeting duly called for the purpose.

In the case of a foreign corporation, the application for registration must be accompanied by a copy of a board resolution, authorizing the investment and specifically naming the designated signatory. The resolution must be duly authenticated by a Philippine consulate or with an apostille.

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