The Securities and Exchange Commission (SEC) has issued the hints on the conversion of groups either to a one man or woman enterprise (OPC) or to an normal stock corporation (OSC) through SEC Memorandum Circular 27, Series of 2020 (SEC MC 27, s. Of 2020). This is in line with Sections 131 and 132 of Republic Act No. 11232 or the "Revised Corporation Code of the Philippines" (RCC), which allows the conversion from an OSC to an OPC, and an OPC to an OSC respectively. SEC MC 20, s. Of 2020 took effect on Oct. 16, 2020.
SEC MC No. 27, s. Of 2020 is divided into 3 elements: the primary part relates to conversion from OSC to OPC; the second element, conversion from OPC to OSC; and the 1/3 component on provisions common to each kinds of conversion. Below are a number of the salient functions of SEC MC 27, s. Of 2020.
Conversion from OSC to OPC
A herbal character of felony age, a believe, or an property (single stockholder) may observe for the conversion of an OSC to an OPC if he has obtained all of the OSC's extremely good capital stocks and has received the required certificate authorizing registration or tax clearance from the Bureau of Internal Revenue. The conversion can also then be processed as an modification of the articles of incorporation (AOI) through the submission of the required files to the SEC (Section 1, SEC MC 27, s. Of 2020).
Once the SEC problems the certificate of submitting of the amended AOI reflecting such conversion to an OPC, the OSC's AOI and Bylaws shall be deemed superseded (Section 2, SEC MC 27, s. Of 2020) and the OPC converted from an OSC shall prevail the latter and be legally accountable for all of the latter's great liabilities as of the date of approval of the conversion (Section 4, SEC MC 27, s. Of 2020). Please take observe that the unique SEC registration wide variety will nonetheless be retained however the company name will endure the OPC suffix (Section three, SEC MC 27, s. Of 2020).
Conversion from OPC to OSC
Once the shares in an OPC ceases to be entirely held by using a unmarried stockholder, a conversion to an OSC may additionally come into vicinity. This may be achieved after due observe to the SEC of such facts and of such circumstances leading to the conversion, and after compliance with all of the requirements for an OSC. The fee determines, after assessment of the documentary requirements, if such conversion is relevant (Section 7, SEC MC 27, s. Of 2020).
Following the switch/s of stocks in an OPC wherein there at the moment are as a minimum two stockholders in what turned into once the OPC, a note of conversion of an OPC into an OSC will be filed with the commission within 60 days from such switch/s of stocks. The duration for filing the notice will be found despite the fact that the conversion might be carried out for, or will take area, afterward (Section 8, SEC MC 27, s. Of 2020).
However, if the awareness is filed beyond the 60-day length from the switch of shares, the conversion into an OSC may also nonetheless be authorized however is already concern to prior payment of penalty if found answerable for the violation of Section 132, when it comes to Section 158 of the RCC on administrative sanctions, after due observe and listening to (Section 10, SEC MC 27, s. Of 2020).
The OPC's AOI will be deemed outmoded once the SEC problems the certificates of filing of the amended AOI reflecting such conversion to an OSC (Section 11, SEC MC 27, s. Of 2020) and the OSC transformed from an OPC shall be successful the latter and be legally liable for all the latter's amazing liabilities as of the date of conversion (Section thirteen, SEC MC 27, s. Of 2020).
The certificates of filing of amended AOI and bylaws shall nevertheless endure the authentic SEC registration number. Please note additionally that the "OPC" suffix ought to be removed (Section 12, SEC MC 27, s. Of 2020).
Provisions commonplace to both varieties of conversion
Below are the commonplace provisions to both types of conversion:
The signatory or signatories in the AOI of the transformed enterprise need to truly kingdom that they voluntarily agreed to the conversion applicable to them (Section 15, SEC MC 27, s. Of 2020).
The motive of the nature of the conversion from an OSC to OPC will be deemed as optional; while for the conversion from an OPC to OSC, this is taken into consideration obligatory, unless when the winding-up and dissolution are appropriate (Section sixteen, SEC MC 27, s. Of 2020).
In case of opposition or dispute bobbing up from the conversion, the aggrieved birthday celebration can also file a established petition for cancellation of the issued certificates with the SEC's Company Registration and Monitoring Department (CRMD), at the floor of fraud in the procurement, according with the SEC's relevant laws and other guidelines or issuances (Section 18, SEC MC 27, s. Of 2020).
SEC MC No. 27, s. Of 2020 is divided into 3 elements: the primary part relates to conversion from OSC to OPC; the second element, conversion from OPC to OSC; and the 1/3 component on provisions common to each kinds of conversion. Below are a number of the salient functions of SEC MC 27, s. Of 2020.
Conversion from OSC to OPC
A herbal character of felony age, a believe, or an property (single stockholder) may observe for the conversion of an OSC to an OPC if he has obtained all of the OSC's extremely good capital stocks and has received the required certificate authorizing registration or tax clearance from the Bureau of Internal Revenue. The conversion can also then be processed as an modification of the articles of incorporation (AOI) through the submission of the required files to the SEC (Section 1, SEC MC 27, s. Of 2020).
Once the SEC problems the certificate of submitting of the amended AOI reflecting such conversion to an OPC, the OSC's AOI and Bylaws shall be deemed superseded (Section 2, SEC MC 27, s. Of 2020) and the OPC converted from an OSC shall prevail the latter and be legally accountable for all of the latter's great liabilities as of the date of approval of the conversion (Section 4, SEC MC 27, s. Of 2020). Please take observe that the unique SEC registration wide variety will nonetheless be retained however the company name will endure the OPC suffix (Section three, SEC MC 27, s. Of 2020).
Conversion from OPC to OSC
Once the shares in an OPC ceases to be entirely held by using a unmarried stockholder, a conversion to an OSC may additionally come into vicinity. This may be achieved after due observe to the SEC of such facts and of such circumstances leading to the conversion, and after compliance with all of the requirements for an OSC. The fee determines, after assessment of the documentary requirements, if such conversion is relevant (Section 7, SEC MC 27, s. Of 2020).
Following the switch/s of stocks in an OPC wherein there at the moment are as a minimum two stockholders in what turned into once the OPC, a note of conversion of an OPC into an OSC will be filed with the commission within 60 days from such switch/s of stocks. The duration for filing the notice will be found despite the fact that the conversion might be carried out for, or will take area, afterward (Section 8, SEC MC 27, s. Of 2020).
However, if the awareness is filed beyond the 60-day length from the switch of shares, the conversion into an OSC may also nonetheless be authorized however is already concern to prior payment of penalty if found answerable for the violation of Section 132, when it comes to Section 158 of the RCC on administrative sanctions, after due observe and listening to (Section 10, SEC MC 27, s. Of 2020).
The OPC's AOI will be deemed outmoded once the SEC problems the certificates of filing of the amended AOI reflecting such conversion to an OSC (Section 11, SEC MC 27, s. Of 2020) and the OSC transformed from an OPC shall be successful the latter and be legally liable for all the latter's amazing liabilities as of the date of conversion (Section thirteen, SEC MC 27, s. Of 2020).
The certificates of filing of amended AOI and bylaws shall nevertheless endure the authentic SEC registration number. Please note additionally that the "OPC" suffix ought to be removed (Section 12, SEC MC 27, s. Of 2020).
Provisions commonplace to both varieties of conversion
Below are the commonplace provisions to both types of conversion:
The signatory or signatories in the AOI of the transformed enterprise need to truly kingdom that they voluntarily agreed to the conversion applicable to them (Section 15, SEC MC 27, s. Of 2020).
The motive of the nature of the conversion from an OSC to OPC will be deemed as optional; while for the conversion from an OPC to OSC, this is taken into consideration obligatory, unless when the winding-up and dissolution are appropriate (Section sixteen, SEC MC 27, s. Of 2020).
In case of opposition or dispute bobbing up from the conversion, the aggrieved birthday celebration can also file a established petition for cancellation of the issued certificates with the SEC's Company Registration and Monitoring Department (CRMD), at the floor of fraud in the procurement, according with the SEC's relevant laws and other guidelines or issuances (Section 18, SEC MC 27, s. Of 2020).
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