Can I set up a corporation by myself? What is a One Person Corporation (OPC) and how is it different from a sole proprietorship?

Why

Before 2019, a corporation needed at least five incorporators. The Revised Corporation Code (Republic Act No. 11232) changed that: Section 10 allows a person to organize a corporation singly, and states that a corporation with a single stockholder is a One Person Corporation governed by Title XIII, Chapter III (Sections 115 to 132). Section 116 limits who may form one to a natural person, a trust or an estate. Banks and quasi-banks, pre-need, trust and insurance companies, public and publicly-listed companies and non-chartered GOCCs may not incorporate as OPCs, and a licensed professional may not use an OPC to practise the profession unless a special law allows it.

Setting up is lighter than for an ordinary corporation. Section 117 says an OPC is not required to have a minimum authorized capital stock, except where a special law sets one for the industry. Section 119 exempts it from filing bylaws. Its articles of incorporation must name a nominee and an alternate nominee, with their written consent attached (Sections 118 and 124), and Section 120 requires the letters 'OPC' below or at the end of the corporate name. Like other corporations under Section 11, it has perpetual existence unless its articles say otherwise.

Under Section 121, the single stockholder is automatically the sole director and president. Within 15 days from incorporation, the OPC must appoint a treasurer and a corporate secretary and notify the SEC within five days of the appointment (Section 122). The single stockholder may not be the corporate secretary. If the stockholder appoints themselves treasurer, they must post a bond with the SEC, renewed every two years, and give a written undertaking to administer the funds faithfully. Instead of meetings, decisions are recorded as written resolutions signed by the stockholder in a minutes book (Sections 127 and 128).

The nominee exists so the business does not freeze if the owner dies or becomes incapacitated. The nominee (or the alternate) steps in as director and manages the OPC. If the incapacity is temporary, this lasts until the stockholder recovers; on death or permanent incapacity, it lasts until the legal heirs are determined (Section 125). The corporate secretary must notify the nominee and the SEC within five days of the stockholder's death (Section 123). The nominee then transfers the shares to the heirs, who have 60 days to decide whether to dissolve the OPC or convert it into an ordinary stock corporation (Section 132).

The key difference from a sole proprietorship is limited liability, but the Code conditions it. Under Section 130, a sole shareholder claiming limited liability has the burden of affirmatively showing that the corporation was adequately financed, and if they cannot prove that the OPC's property is independent of their personal property, they become jointly and severally liable for the OPC's debts. Piercing the corporate veil applies to OPCs as to other corporations. An OPC also carries continuing duties under Section 129: annual financial statements (audited by an independent CPA, or certified under oath by the treasurer and president if total assets or total liabilities are below ₱600,000), a disclosure of all self-dealings and related-party transactions with the stockholder, and other reports the SEC requires. Missing reports three times within five years can put the OPC in delinquent status.