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Registering as a Filipino founder

If every owner is Filipino, the first decision is the structure. There are four, and they differ on liability, tax and where you register.

Incorporation for FilipinosTalk to an expert
Founder guide · Updated 10 October 2026
4
structures open to an all-Filipino business
8%
optional tax on gross sales, for sole proprietors at ₱3M or less
2–15
incorporators in a regular corporation
25%
corporate income tax, or 20% for smaller corporations
01 · The four compared

The four structures compared

A sole proprietorship, a partnership, a One Person Corporation and a regular corporation differ on three things that matter from the first day: whether your own property answers for the business’s debts, how the business is taxed, and where it registers.

Sole proprietorship
OwnersOne individual
Registers withDTI for a business name, then BIR and city hall
Separate legal personNo
Owner’s liabilityAll the owner’s property
Income taxIndividual rates, or 8% of gross sales
Partnership
OwnersTwo or more partners
Registers withSEC, then BIR and city hall
Separate legal personYes
Owner’s liabilityEach partner, pro rata, once the partnership’s assets run out
Income taxAs a corporation, except a general professional partnership
One Person Corporation
OwnersOne individual, trust or estate
Registers withSEC, then BIR and city hall
Separate legal personYes
Owner’s liabilityLimited, if the owner shows the company was adequately financed
Income taxAs a corporation
Regular corporation
Owners2 to 15 incorporators
Registers withSEC, then BIR and city hall
Separate legal personYes
Owner’s liabilityLimited, unless a court pierces the corporate veil
Income tax25%, or 20% for smaller corporations
Key takeaways
1A sole proprietorship is not a separate legal person. The owner answers for its debts with everything they own.
2The DTI registers a business name, not a business. You need it only if you trade under a name other than your own, and it lasts five years.
3A partnership needs at least two partners. With capital of ₱3,000 or more, its articles are recorded with the SEC.
4Partnerships and One Person Corporations are taxed as corporations. A general professional partnership is the exception.
5A One Person Corporation lets a single founder incorporate, but someone else must be its corporate secretary.
6Choose for the business you’ll have in two years. Co-founders, foreign partners and investors all come in through shares, which only a corporation has, and a sole proprietorship can’t be converted into one later.
02 · Sole proprietorship

Sole proprietorship

A business run by one person under their own name or a registered business name.

No separate legal person
The Supreme Court has held that a sole proprietorship “does not possess a juridical personality separate and distinct from the personality of the owner.” It can’t sue or be sued in its own name, and its debts are the owner’s debts: a debtor is liable “with all his property, present and future.”
DTI registers the name
You need a DTI business name only if you trade under a name other than your true name. Registration is online, through the DTI’s Business Name Registration System. The fee runs from ₱200 to ₱2,000, depending on the territorial scope you choose, which is not a limit on where you trade. A registration lasts five years and can be renewed. Only SEC-registered partnerships and corporations may use “company”, “corporation” or “incorporated” in their name.
Then the BIR and city hall
A business name is not a permit: you still need a mayor’s permit from your city or municipal hall. A sole proprietor registers with the BIR, online or at its Revenue District Office, by the first sale or 30 days after the DTI certificate or mayor’s permit, whichever comes first.
The 8% option
A sole proprietor with gross sales of ₱3 million or less who isn’t VAT-registered can pay 8% of gross sales above ₱250,000, in place of the graduated income tax and the percentage tax. The choice is made at the start of the year and can’t be changed for that year. Otherwise the graduated rates apply: the first ₱250,000 is exempt, and the top rate is 35%.
03 · Partnership

Partnership

A partnership is formed when “two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves.” It is a legal person separate from its partners.

SEC recording
A partnership with capital of ₱3,000 or more, in money or property, must be set out in a public instrument recorded with the SEC. Failing to record it doesn’t protect the partners: their liability to third parties stays the same.
Liability
Partners answer for the partnership’s contracts “pro rata with all their property and after all the partnership assets have been exhausted.” An agreement among partners to escape that liability binds only the partners themselves. A limited partnership has at least one general partner, and its limited partners aren’t bound by the partnership’s obligations, unless they take part in controlling the business.
Tax
For income tax, a partnership is treated as a corporation. The exception is a general professional partnership, formed by people practicing a common profession, with no income from any trade or business. It pays no income tax itself; each partner is taxed on their share.
04 · One Person Corporation

One Person Corporation

A One Person Corporation (OPC) is a corporation with a single stockholder, who must be an individual, a trust or an estate. It is open to a single founder, except a licensed professional forming it to practice that profession, and some regulated businesses such as banks and insurers.

Sole director and president
The stockholder is the sole director and the president, and must name a nominee and an alternate in the articles to take over on death or incapacity.
“OPC” in the name
The name carries “OPC”, either below or at the end of the corporate name.
Someone else must be the corporate secretary
The OPC appoints its treasurer, corporate secretary and other officers and files their appointment with the SEC within 20 days of its certificate. If the stockholder appoints themselves treasurer, they post a bond with the SEC, sized to the authorized capital and renewed every two years. The single stockholder can’t be the corporate secretary, so every OPC needs someone else in the role. korp.ph’s corporate secretary service fills it.
Liability is limited, with a condition
A stockholder claiming limited liability must show the company was adequately financed. If they can’t show that its property is separate from their own, they are jointly and severally liable with it for its debts.
An OPC files no by-laws, and is taxed as a corporation. It can become a regular corporation by notice to the SEC, filed within 60 days of the change, such as a second stockholder coming in.
05 · Regular corporation

Regular corporation

A corporation is “an artificial being created by operation of law”: a legal person separate from its owners, formed by 2 to 15 incorporators with at least two directors. There is no minimum capital, except where a special law sets one.

Its debts are its own
Shareholders answer for the corporation’s debts only up to any unpaid part of their subscriptions. Courts set that protection aside, “piercing the corporate veil”, only where the company is used to evade an existing obligation, to commit fraud, or as the mere alter ego of its owner.
Tax
Corporate income tax is 25% of net taxable income, or 20% if net taxable income is ₱5 million or less and total assets ₱100 million or less, excluding land. From its fourth year, a minimum tax of 2% of gross income applies when that is higher.
Every year
It files a General Information Sheet and annual financial statements with the SEC. The statements must be audited once total assets or liabilities exceed ₱3 million, or once annual gross sales exceed ₱3 million.
Corporate secretary
Its corporate secretary must be a Filipino citizen living in the Philippines.
The SEC incorporation guide covers the five decisions that go into the filing.
06 · Choosing for two years out

Choose for the business you’ll have in two years

A structure is chosen for the business you expect to run, not only the one you run today. Changing later is possible, but it is not a formality: a sole proprietorship can’t be converted, so moving into a corporation means forming a new company and transferring the business into it. Before choosing, picture the business two years from now.

Will you bring in a co-founder or partner?
A sole proprietorship belongs to one person, so a second owner means a new structure. An OPC becomes a regular corporation by notice to the SEC when a second stockholder comes in. In a corporation, a new owner simply takes shares, which the law treats as transferable property.
Could a foreign partner or investor join?
A sole proprietorship has no shares to give them, and only Filipinos can register a DTI business name. A corporation can take foreign shareholders within the limits of the Negative List. Once foreign ownership passes 40%, a company that sells in the Philippines needs at least US$200,000 of paid-in capital, so it pays to plan the shareholding early. See Foreign founders.
Will you raise money?
Investors put money in for shares, and only a stock corporation has capital stock divided into shares. It can issue new shares up to its authorized capital; going beyond that means amending the articles. Set the authorized capital with the next round in mind: a higher figure costs more in SEC fees now, a lower one means an amendment later.
Who will you sell to?
Only SEC-registered partnerships and corporations may use “company”, “corporation” or “incorporated” in their name, and a corporation keeps its own TIN, books and financial statements, separate from its owners. In korp.ph’s experience, larger clients, banks and foreign partners often expect to contract with a corporation.
Should the business outlive you?
A sole proprietorship has no existence apart from its owner. A corporation exists perpetually unless its articles say otherwise, and its shares pass like any other property. An OPC names a nominee to take over if its stockholder dies or becomes incapacitated.
If two or more are a yes

If the business will stay yours alone, small and under your own name, a sole proprietorship may be all it needs. If two or more of these questions are likely to be a yes within two years, it is simpler to start as a corporation than to move into one later.

Partnership or corporation?

For two or more founders, a partnership and a corporation are both separate legal persons, and both are taxed as corporations. They differ on liability: partners answer with their own property once the partnership’s assets are exhausted, and shareholders don’t, beyond any unpaid subscription, unless a court pierces the corporate veil. Professionals practicing together are the exception worth knowing: a general professional partnership pays no income tax itself, and the partners are taxed individually.

07 · Moving to a corporation

Moving from a sole proprietorship to a corporation

There is no procedure for converting a sole proprietorship into a corporation. You form a new corporation and transfer the business into it.

The business assets can pay for shares
The Revised Corporation Code accepts property as payment for shares at a fair valuation, subject to the SEC’s approval.
Put the transfer in writing
The Supreme Court has refused to let a corporation collect its predecessor proprietorship’s receivables without proof, such as a deed of assignment, that it had taken over the business’s assets and liabilities.
08 · The six stages

What comes next

A One Person Corporation or a regular corporation goes through the same six stages, broadly in this order. Each has its own page in this guide.

01

Registered address

Principal office

The articles of incorporation must name a specific principal office in the Philippines. The address also decides which BIR office the company registers with, and the city hall looks at it for the business permit.

Stage 1 of 6Read the guide →
02

SEC incorporation

SEC

The SEC registers the company and issues a digital certificate of incorporation. The articles of incorporation and by-laws are filed online through eSPARC, and each incorporator signs electronically.

Stage 2 of 6Read the guide →
03

BIR registration

BIR

The BIR registers the company as a taxpayer and issues its Certificate of Registration. The company registers online through ORUS, within 30 days of the SEC certificate or before its first sale.

Stage 3 of 6Read the guide →
04

Business permit

City hall

The city or municipal hall issues the mayor’s permit. It is required before the company operates, and renewed every year, in January in most cities.

Stage 4 of 6Read the guide →
05

Bank account

Your bank

A corporate account in the company’s own name. Many banks ask for the BIR certificate and the mayor’s permit first.

Stage 5 of 6Read the guide →
06

Employer registration

SSS · PhilHealth · Pag-IBIG

Once it has its TIN, the company gets its SSS, PhilHealth and Pag-IBIG employer numbers, then finalizes registration with each agency. Coverage is mandatory for private-sector employees, and the employer remits the contributions.

Stage 6 of 6Read the guide →
09 · FAQ

Frequently asked questions

Do I need to register my business name with the DTI?

Only if you do business under a name other than your own. A DTI registration lasts five years and costs from ₱200 to ₱2,000 depending on its territorial scope.

Can I set up a corporation on my own?

Yes, as a One Person Corporation. You are the sole director and president, you name a nominee and an alternate, and someone else must be the corporate secretary.

Is a partnership taxed differently from a corporation?

No. A partnership pays income tax as a corporation, unless it is a general professional partnership.

Can I convert my sole proprietorship into a corporation?

Not directly. You incorporate a new company and transfer the business into it, documenting the transfer of its assets and liabilities.
← OverviewBusiness registration in the PhilippinesNext · Stage 01Registered address →

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korp.ph incorporates One Person Corporations and regular corporations with the SEC, and can carry them through BIR registration, the business permit and employer registration, for companies registered at its Makati or Daet virtual office, or with their own registered office in Metro Manila or Cebu.
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