NOTICE

TO : ALL INTERESTED PARTIES

SUBJECT : PROPOSED GUIDELINES FOR THE CONVERSION

OF CORPORATIONS EITHER TO ONE PERSON
CORPORATION OR TO ORDINARY STOCK
CORPORATION
---------------------------------------------------------------------------------------------

Pursuant to Section 179 (o) of Republic Act No. 11232, otherwise

known as the Revised Corporation Code of the Philippines, in conjunction
with Title XIII, Chapter III of the same Code, the Commission intends to
issue SEC Memorandum Circular providing for the Guidelines for the
Conversion of Corporations Either to One Person Corporation or to
Ordinary Stock Corporation.

In view of the foregoing, all interested parties are invited to

submit their comments, positions and inputs on the SEC Memorandum
Circular embodying the Guidelines for the Conversion of Corporations
Either to One Person Corporation or to Ordinary Stock Corporation.

All interested parties may submit their comments, positions and

inputs to the Company Registration and Monitoring Department (CRMD),
c/o Atty. Darwin C. Sotto, through email address ([email protected]) not
later than 03 July 2020.

Issued on 23 June 2020.

DRAFT
SEC Memorandum Circular No. ________
Series of 2020

TO: All Concerned

SUBJECT: GUIDELINES FOR THE CONVERSION OF CORPORATIONS

EITHER TO ONE PERSON CORPORATION OR TO ORDINARY
STOCK CORPORATION

In order to effectively implement Title XIII, Chapter III of the Revised

Corporation Code which allows conversion from an Ordinary Stock Corporation
to a One Person Corporation, as well as conversion from a One Person Corporation
to an Ordinary Stock Corporation, the Commission resolved to issue the following
guidelines:

PART I

ORDINARY STOCK CORPORATION

TO ONE PERSON CORPORATION

Section 1. When a single stockholder acquires all the stocks of an Ordinary

Stock Corporation, the Ordinary Stock Corporation may apply for conversion into
a One Person Corporation, by submitting the following documentary
requirements:

(1) Cover sheet

(2) Notice of Conversion of an Ordinary Stock Corporation to a One
Person Corporation, signed by the single stockholder who has
acquired all of the outstanding shares of the capital stock of an
ordinary stock corporation and countersigned by the
corporation’s corporate secretary in the form prescribed by the
Commission1
(3) Original or certified true copy of the document/s effecting the
transfer/s (i.e.: deeds of assignment, or any legal document
transferring the shares to the single stockholder) and, if applicable,
a certified true copy of proof of authority to act on behalf of the
trust/estate
(4) Notarized Secretary’s Certificate of No Intra-Corporate Dispute
(5) Articles of Incorporation of a One Person Corporation, duly
prepared, signed and acknowledged or authenticated by the single
stockholder and by the corporation’s treasurer in accordance with
the SEC Guidelines on the Establishment of a One Person
Corporation or such other Guidelines that the Commission may
hereafter issue

1 Copy of a Notice of Conversion of an Ordinary Stock Corporation into a One Person Corporation
is hereto attached as Annex “A”.
Page 2 of 9
(6) Letter of acceptance of appointment by Nominee and Alternate
Nominee
(7) Self-appointed Treasurer’s Bond, if applicable
(8) Name reservation
(9) Nominee’s Report on Transfer of Shares of Deceased Single
Stockholder
(10) Endorsement clearance from other relevant department of the
SEC or from the Compliance Monitoring Division of the Company
Registration and Monitoring Department, whichever is applicable
(11) Endorsement clearance from appropriate government agencies, if
applicable
(12) Undertaking to Change Corporate Name duly executed under oath
by the single stockholder or the sole remaining director, if not yet
included in the Articles of Incorporation

Section 2. In the Articles of Incorporation of a One Person Corporation to be

submitted, the provision/article indicating the name/s and address/es of the
original incorporator/s of the ordinary stock corporation shall be retained as is.

Meanwhile, the provisions on the number of directors, their names and addresses,
as well as their subscription and payment details shall be modified to reflect the
name, address, subscription and payment details of the single stockholder. Other
details particular to a One Person Corporation shall likewise be indicated.

Section 3. Upon issuance of the Certificate of Filing of Amended Articles of

Incorporation by the SEC reflecting the conversion to a One Person Corporation,
the Articles of Incorporation and By-laws of the Ordinary Stock Corporation shall
be deemed superseded.

Section 4. In the Certificate of Filing of Amended Articles of Incorporation that

will be issued, the corporation will retain its SEC Company Registration Number,
but will have the “OPC” prefix in order to reflect its nature as a One Person
Corporation.

Section 5. 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 approval of the conversion.

Section 6. The provisions of Title XIII, Chapter III of the Revised Corporation
Code shall apply primarily to One Person Corporations, while other provisions of
the Code apply suppletorily.

Page 3 of 9
PART II

ONE PERSON CORPORATION

TO ORDINARY STOCK CORPORATION

Section 7. When some or all of the shares in a One Person Corporation ceases
to be held solely by a natural person, a trust, or an estate, the One Person
Corporation may be converted into an Ordinary Stock Corporation after due notice
to the Commission of such fact/s and of such circumstance/s leading to the
conversion, and after compliance with all the requirements for a stock
corporation, as may be determined by the Securities and Exchange Commission,
after an evaluation of the following documentary requirements:

(1) Cover sheet

(2) Notice of Conversion of a One Person Corporation into an
Ordinary Stock Corporation, signed by all holders of shares of the
outstanding capital stock, countersigned by the corporate
secretary in the form prescribed by the Commission2
(3) Original or certified true copy of the document/s effecting the
transfers (i.e.: subscription contracts, deeds of assignment, or any
legal document declaring the legal heirs of the single stockholder)
(4) Articles of Incorporation and Bylaws of an Ordinary Stock
Corporation duly signed and acknowledged or authenticated by
the stockholders who voted for their adoption, which must be at
least a majority of the outstanding capital stock. The corporation’s
treasurer must likewise sign the Articles of Incorporation.
(5) Name reservation
(6) Endorsement clearance from other relevant department of the
SEC or from the Compliance Monitoring Division of the Company
Registration and Monitoring Department, whichever is applicable
(7) Endorsement clearance from appropriate government agencies, if
applicable
(8) Undertaking to Change Corporate Name duly executed under oath
by the single stockholder or the sole remaining director, if not yet
included in the Articles of Incorporation

Section 8. The Notice of Conversion of a One Person Corporation into an

Ordinary Stock Corporation 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.

For greater certainty, the circumstances referred to above that would lead
to the conversion into an Ordinary Stock Corporation shall pertain to such
circumstances culminating in the transfer of shares into two or more transferees

Section 9. The reckoning point for the sixty-day period for filing the Notice of
Conversion shall commence on:

2 Copy of a Notice of Conversion of a One Person Corporation into an Ordinary Stock Corporation
is hereto attached as Annex “B”.
Page 4 of 9
(1) the date of execution of the earliest deed of assignment, or other
similar instrument, transferring some shares of the single
stockholder to another person or transferring all shares of the
single stockholder to several persons, or;
(2) the date when the nominee or alternate nominee transferred the
shares under the name of the legal heirs of the single stockholder
as evidenced by a Nominee’s Report on Transfer of Shares of
Deceased Single Stockholder together with the original or
certified true copy of the legal document declaring the legal heirs
of the single stockholder.3

Section 10. Likewise, when some or all of the shares in a One Person Corporation
ceases to be held solely by a natural person, a trust, or an estate, the One Person
Corporation may be dissolved after due notice to the Commission of such fact/s
and of such circumstance/s leading to the dissolution. The Commission may grant
the dissolutionand after the evaluation of the following documentary
requirements:

(1) Cover sheet

(2) Notice of Dissolution of a One Person Corporation.
(3) Original or certified true copy of the document/s effecting the
transfers (i.e.: subscription contracts, deeds of assignment, or any
legal document declaring the legal heirs of the single stockholder)
(4) Endorsement clearance from other relevant department of the
SEC
(5) Endorsement clearance from appropriate government agencies, if
applicable
(6) BIR Tax Clearance; and
(7) Affidavit of assumption of liabilities by the new owners of the OPC
shares of stocks.

Section 11. If the Notice of Conversion/dissolution is filed with the Commission

beyond sixty (60) days from the occurrence of the circumstances leading to the
conversion/dissolution, the One Person Corporation may still be approved for
conversion into an Ordinary Stock Corporation or dissolution subject to penalty of
not less than Five thousand pesos (P5,000.00) in accordance with Section 158 of
the Revised Corporation Code.

Section 12. In the case of conversion, Articles of Incorporation of an Ordinary

Stock Corporation to be submitted, the provision/ article indicating the name/s
and address/es of the original incorporator/s of the corporation shall be retained
as is.

Meanwhile, the provisions on the name and address, as well as the subscription
and payment details shall be modified to reflect the number of directors of the
Ordinary Stock Corporation, as well as their names, addresses, subscription and

3 Copy of a Nominee’s Report is hereto attached as Annex “C”.

Page 5 of 9
payment details. Other details particular to Ordinary Stock Corporations shall
likewise be indicated.

Section 13. Upon issuance by the SEC of the Certificate of Filing of Amended
Articles of Incorporation and of Bylaws reflecting the conversion to an Ordinary
Stock Corporation, the Articles of Incorporation of the One-Person Corporation
shall be deemed superseded.

Section 14. In the Certificate of Filing of Amended Articles of Incorporation and

of Bylaws that will be issued, the corporation shall bear and retain its former SEC
Registration Number.

Section 15. The Ordinary Stock Corporation converted from a One-Person

Corporation shall succeed the latter and be legally responsible for all the latter’s
outstanding liabilities as of the date of conversion.

PART III

PROVISIONS COMMON
TO BOTH KINDS OF CONVERSION

Section 15. In the Articles of Incorporation of the converted corporation, the

signatory/ies thereto must clearly state that they voluntarily agreed to convert the
Ordinary Stock Corporation into a One Person Corporation, or the One Person
Corporation into an Ordinary Stock Corporation, as the case may be.

Section 16. Processing of applications for conversion of an Ordinary Stock

Corporation into a One Person Corporation, and of a One-Person Corporation into
an Ordinary Stock Corporation, shall commence only upon receipt by the
Commission of the complete documentary requirements including the proof of
payment of the applicable fees.

Section 17. The processing and approval of applications for conversion in

accordance with the provisions of the Revised Corporation Code and the foregoing
guidelines shall be done by the Company Registration and Monitoring Department
of the Securities and Exchange Commission or by any of the Commission’s
Extension Offices nationwide.

Section 18. This Memorandum Circular shall take effect immediately after its
publication in a newspaper of general circulation.

_________ June 2020. Pasay City

EMILIO B. AQUINO
Chairperson

Page 6 of 9
Annex “A” – NOTICE OF CONVERSION, OSC-OPC

NOTICE OF CONVERSION
(Ordinary Stock Corporation to One Person Corporation)

I, [NAME OF SINGLE STOCKHOLDER], the sole remaining stockholder of

[NAME OF ORDINARY STOCK CORPORATION] an ordinary stock corporation,
hereby notify the Securities and Exchange Commission of my request to approve
the conversion if the said corporation into a One Person Corporation.
[NAME OF ORDINARY STOCK CORPORATION], an ordinary stock
corporation duly registered and existing under [SEC REGISTRATION NUMBER],
has a total of [NUMBER OF OUTSTANDING SHARES] issued and outstanding
shares as of [DATE OF SIGNING], all of which have been lawfully acquired by me
on the said date from the stockholders enumerated in the following paragraph.
The list of stockholders of the Ordinary Stock Corporation before the
transfer/s of shares are as follows:
Names of Number of Shares Date of Transfer Submitted Proof of
Stockholders Subscribed Transfer

Signed this [DATE OF SIGNING] at [PLACE OF SIGNING].

____________________________________
___
Sole Remaining Stockholder
TIN -

I [NAME OF CORPORATE SECRETARY], [NATIONALITY], of legal age,

residing at [RESIDENCE ADDRESS], the duly appointed and incumbent Corporate
Secretary of [NAME OF ORDINARY STOCK CORPORATION], hereby certify to the
Securities and Exchange Commission that the information provided in the Notice
of Conversion above are true and correct based on my personal knowledge and on
the records of [NAME OF ORDINARY STOCK CORPORATION] as of [ DATE OF
SIGNING].
Signed this [DATE OF SIGNING] at [PLACE OF SIGNING].

____________________________________
___
Corporate Secretary
TIN -

Page 7 of 9
Annex “B” – NOTICE OF DISSOLUTION / CONVERSION (OPC-OSC)

NOTICE

We, the undersigned holders of the outstanding capital stock of [NAME OF

ONE PERSON CORPORATION], hereby notify the Securities and Exchange
Commission of our intention:
 to dissolve the One Person Corporation, or;
 to convert the One Person Corporation into an Ordinary Stock
Corporation.
(please check one)

[NAME OF ONE PERSON CORPORATION], a one person corporation duly

registered and existing under [SEC REGISTRATION NUMBER], has a total of
[NUMBER OF OUTSTANDING SHARES] issued and outstanding shares as of
[DATE OF SIGNING], some or all of which have been lawfully ceased to be held by
[NAME OF SINGLE STOCKHOLDER] as the sole stockholder.
The list of stockholders of the One Person Corporation as of the date of
signing of this Notice of Dissolution / Conversion are as follows:
Names of Number of Shares Date of Transfer Submitted Proof of
Stockholders Subscribed Transfer

Signed this [DATE OF SIGNING] at [PLACE OF SIGNING].

________________________ ________________________ ________________________

Stockholder Stockholder Stockholder
TIN - TIN - TIN –

[NAME OF CORPORATE SECRETARY], [NATIONALITY], of legal age, residing at

[RESIDENCE ADDRESS], the duly appointed and incumbent Corporate Secretary
of [NAME OF ONE PERSON CORPORATION], hereby certify to the Securities
and Exchange Commission that the information provided in the Notice above are
true and correct based on my personal knowledge and on the records of [NAME
OF ONE PERSON CORPORATION] as of [DATE OF SIGNING].
Signed this [DATE OF SIGNING] at [PLACE OF SIGNING].
____________________________________
___
Corporate Secretary
TIN -

Page 8 of 9
Annex “C” – NOMINEE’S REPORT

Nominee’s Report
on Transfer of Shares of Deceased Single Stockholder

I, [NAME OF NOMINEE / ALTERNATE NOMINEE], residing at [ADDRESS],

the duly appointed and incumbent Nominee / Alternate Nominee of [NAME OF
ONE PERSON CORPORATION] a one person corporation duly registered and
existing under [SEC REGISTRATION NUMBER], do hereby report that:
Whereas, under the Section 132 of the Revised Corporation Code, in case
of death of the single stockholder, the nominee or alternate 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 a sole
heir, or any other legal document declaring the legal heirs of the single stockholder
and notify the Commission of the transfer;
Whereas, on [DATE OF DEATH OF SINGLE STOCKHOLDER], [NAME OF
SINGLE STOCKHOLDER] the single stockholder of [NAME OF ONE PERSON
CORPORATION] has died.
Wherefore, on [DATE OF TRANSFER] and by virtue of the [LEGAL
DOCUMENT] dated [DATE OF EXECUTION OF LEGAL DOCUMENT], I thereupon
caused the transfer of the shares of [NAME OF SINGLE STOCKHOLDER] in [NAME
OF THE ONE PERSON CORPORATION] to the following legal heirs:

Name of Transferee Number of Shares

Signed
this [DATE OF
SIGNING] at [PLACE OF SIGNING].
____________________________________
___
Nominee / Alternate Nominee
TIN –

I [NAME OF CORPORATE SECRETARY], [NATIONALITY], of legal age,

residing at [RESIDENCE ADDRESS], the duly appointed and incumbent Corporate
Secretary of [NAME OF ONE PERSON CORPORATION], hereby certify to the
Securities and Exchange Commission that the information provided in the
Nominee’s Report above are true and correct based on my personal knowledge
and on the records of [NAME OF ORDINARY STOCK CORPORATION] as of [
DATE OF SIGNING].
Signed this [DATE OF SIGNING] at [PLACE OF SIGNING].
____________________________________
___
Corporate Secretary
TIN -

Page 9 of 9