Introduction to Corporate Formation and Structuring
Corporate formation and structuring in the Philippines involve the legal processes and strategic decisions required to establish a business entity in accordance with local laws and regulations. This starts with choosing the appropriate business structure—such as a sole proprietorship, partnership, corporation, or one-person corporation (OPC)—each with different implications for liability, taxation, and governance. For foreign entities, this may be in a branch, a subsidiary, or a representative office in the Philippines.
The process includes registering with the Securities and Exchange Commission (SEC) for corporations, the Department of Trade and Industry (DTI) for sole proprietorships, and obtaining necessary permits from local government units (LGUs) and the Bureau of Internal Revenue (BIR). Structuring involves setting up the company’s internal governance, defining shareholder roles, and drafting essential documents like bylaws and articles of incorporation. Proper formation and structuring ensure compliance, mitigate risks, and optimize operational efficiency for businesses in the Philippines.