How to Register a Non-Stock Non-Profit in the Philippines

Under Sec. 86 of the Corporation Code, non-stock corporations is one which does not issue shares and is created not for profit but for public good and welfare and where no part of its income is distributable as dividends to its members, trustees, or officers.

Non-stock corporations or foundations in the Philippines may be formed for charitable, religious, educational, professional, cultural, fraternal, literary, scientific, social, civic service, or similar purposes, such as trade, industry, agricultural and like chambers, or any combination thereof. Its governing body is usually the Board of Trustees (BOT). However, non-stock corporations may, through their articles of incorporation or their by-laws, designate their governing boards by any name other than as board of trustees.

The trustees shall be composed of individuals who may or may NOT be more than fifteen (15) and can hold office for not more than three (3) years until their successors are elected and qualified.

To register a non-stock, non-profit corporation, you need to have the following:

[1] Members of the board of trustees who may or may NOT be more than fifteen (15);

[2] Complete address of each incorporators or trustees and their nationalities;

[3] BIR Tax Identification Number (TIN) of each incorporator or trustee;

[4] Contribution of incorporators and members

Based on the above details, you may now proceed with the Securities and Exchange Commission (SEC) eSPARC. Please note that eSPARC can only be used if your trustees are not more than 15 individuals.

Considering that you will register online, the documents such as Articles of Incorporation (AOI) and By-laws (BL) shall now be generated online and are stamped with an SEC barcode once completed.

Is there a capital requirement?

Generally, there is no capital requirement for non-profit, and non-stock corporations, unless this is a foundation, or this non-stock non-profit requires special licenses to operate, in which case, certain rules may apply. 

Thus, unlike regular domestic corporations where the subscribed capital and paid in capital are already divulged from the time of registration, there is no capital requirement needed for a non-stock, non-profit corporations. 

They are, however, required to divulge its contributions. This is supported by SEC
Opinion 2011-07 which states:

“In defining the classes of corporations, the law clearly states that capital stock divided into shares pertains only to stock corporations. It is the shares of stock issued by stock corporations that are subscribed and paid by its owners, the stockholders. 

Moreover, Title VII of the Corporation Code on Stock and Stockholders, which contains provisions on subscription contract and unpaid subscriptions, refer only to stock corporations. On the other had, the law provides that capital of non-stock corporations shall be sourced from contributions made by its contributors and donors. Xxx”

Please be mindful that mere registration with the SEC as a non-stock, nonprofit corporation does not automatically entitle an entity to tax exemption. It is a corporation’s activities that determine the true nature of the organization and its taxability or exemption from taxes.

… and you might just need our assistance.

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