The most successful businesses are those that know how to deal with change. These companies do not just respond to change when they need to; they embrace it and adapt in order to keep going.
Pertinent changes to a company may be due to something as simple as a change of business name or location. In some cases, a strategic rebranding effort may be the catalyst. It could also be the result of a merger or acquisition or a prerogative of the company’s shareholders that can change the nature of the business.
Whichever case applies to you, it is important to understand the finer points of amending company details in the Philippines. Continue reading this guide to learn more.
What changes can you make to a Filipino company?
For businesses formed in the Philippines, the following details of a company’s Articles of Incorporation may be changed, as acknowledged by the Revised Corporation Code (Republic Act No. 11232):
- Trade nameCompanies are allowed to change their name if
the nature or activities of their business are no longer reflected in the name.
Registered business names are valid for five years. Changes to a business name may be made only once within this period.
For companies formed as a sole proprietorship, a change in business name only requires the completion of necessary forms with the Department of Trade and Industry.
Partnerships and larger companies require additional procedures, including convening the company’s shareholders to reach a decision to change the name, amending the company’s Articles of Incorporation, and notifying the Securities and Exchange Commission (SEC) and concerned tax and social security authorities about the resulting change.
- Objects of activityChanging a company’s main, secondary,
or both objects of activity involves the same straightforward process of amending the Articles of
Incorporation.
However, it is important that both lines of business are aligned. If an additional activity that is unrelated to the main or original nature of the business will be added, the company is required to apply for a new registration.
- Business address
The legal seat or operational headquarters of the business may be changed to maximize the potential of the company—whether by increasing visibility and/or foot traffic, or simply by saving on rent.
Changing your company’s business address involves the following process:
- Amending the Articles of Incorporation
- Retiring the business at the barangay and municipality levels
- Securing a new Barangay Clearance and Mayor’s Permit
- Updating of Bureau of Internal Revenue (BIR) records (transfer to a new regional district office)
Changing your company’s business address involves the following process:
- Directors and shareholdersMatters involving business
ownership structure, such as the number of directors and shareholders in a company can change and must
be updated accordingly. Any such changes must be reflected in the company’s Articles of Incorporation.
When amending the shareholding structure of the business, the names of the new shareholders must be added without removing the initial or former shareholders of the company.
- Share capitalIncreases or decreases in capitalization must also be filed. It is important, however, that the initial share capital and the respective contributions of each shareholder must not change.
Can companies change from one type to another?
If you started a sole proprietorship before 2019, there may come a point where the company is ready to scale. In this case, changing the company type into a corporation may be in order.
Changing a sole proprietorship into a corporation gives your company notable advantages such as better protections against liability, greater credibility in the business landscape, and more favorable taxation terms. You will have to close the company—following all necessary procedures required by the concerned agencies—in order to re-register as a corporation.
Prior to the enactment of Revised Corporation Code in 2019, you need to have four other incorporators and to establish a board of directors before you can change a sole proprietorship into a corporation. Under the new law, however, any single person, trust, or estate can form a new business entity known as a One Person Corporation (OPC).
If you are just about to start a business, the option to form an OPC outright works to your advantage. You no longer have to start as a sole proprietorship or partnership and wait until the business grows before you can apply to become a corporation.
For more details on amending company details and other important processes relevant to company formation in the Philippines, get in touch with FilePino. Count on our team of experts to provide your company with all the guidance and insights that you need to succeed.
Contact us today at +1.806.553.6552 (USA) or +63.917.892.2337 (Philippines).
