The Securities and Exchange Commission (SEC) recently released Memorandum Circular (MC) No. 27-2020 to guide corporations under (or with potential to be under) conversion from Ordinary Stock Corporation (OSC) to One Person Corporation (OPC); or vice-versa. The conversion from OSC to OPC is reliant on the discretion of the management of the Corporation, whereas, the conversion from OPC to OSC is required by the SEC, except where winding-up and dissolution is appropriate.
When a ‘single stockholder’ (i.e. a natural person, a trust, or an estate) acquired all of the outstanding capital stocks of an OSC, the corporation may apply for its conversion to OPC by amending its Articles of Incorporation. On the other hand, when the shares of the Corporation ceases to be held solely by a single stockholder, a corporation shall apply for its conversion to OSC.
For conversions from OPC to OSC, due notice must be submitted to the SEC within sixty (60) days following the transfer/s of shares. Failure to submit within the prescribed period may subject the Corporation to applicable penalties.
Below are the requirements for submission to the SEC under the specific conversion applicable to the Corporation:
| Documentary requirement | OSC to OPC | OPC to OSC |
| Cover sheet | Yes | Yes |
| Signed application for or notice of conversion | Application for conversion | Notice of conversion |
| Original or certified true copy of the document/s effecting the transfer/s of full title/ownership of shares and, if applicable, a certified true copy of proof of authority to act on behalf of the trust/estate | Yes | Yes |
| Certificate Authorizing Registration / tax clearance from the BIR | Yes | Yes |
| Notarized Secretary’s Certificate of No Intra-Corporate Dispute | Yes | No |
| Articles of Incorporation (AOI) and By-laws | AOI of OPC | AOI and By-laws of OSC |
| Letter of acceptance of appointment by Nominee and Alternate Nominee | Yes | No |
| Self-appointed Treasurer’s Bond | if applicable | No |
| Name reservation | Yes | Yes |
| Monitoring clearance from other relevant department of the SEC or from the Compliance Monitoring Division (CMD) of the Company Registration and Monitoring Department (CRMD), whichever is applicable | Yes | Yes |
| Endorsement clearance from appropriate government agencies | if applicable | if applicable |
| Documentary requirement | OSC to OPC | OPC to OSC |
If not yet included in the AOI:
| by the single stockholder or the sole remaining director | by the authorized representative or director of the OSC |
| by the single stockholder of the OPC | by the all the stockholders of the OSC |
Moreover, the latest or amended AOI shall be attached to the previous AOI of the Corporation. It shall still indicate the name/s and address/es of the original incorporator/s of the Corporation and the following modifications shall be reflected to the Corporation’s Amended AOI:
| Documentary requirement | OSC to OPC | OPC to OSC |
| Cover sheet | Yes | Yes |
| Signed application for or notice of conversion | Application for conversion | Notice of conversion |
| Original or certified true copy of the document/s effecting the transfer/s of full title/ownership of shares and, if applicable, a certified true copy of proof of authority to act on behalf of the trust/estate | Yes | Yes |
| Certificate Authorizing Registration / tax clearance from the BIR | Yes | Yes |
| Notarized Secretary’s Certificate of No Intra-Corporate Dispute | Yes | No |
| Articles of Incorporation (AOI) and By-laws | AOI of OPC | AOI and By-laws of OSC |
| Letter of acceptance of appointment by Nominee and Alternate Nominee | Yes | No |
| Self-appointed Treasurer’s Bond | if applicable | No |
| Name reservation | Yes | Yes |
| Monitoring clearance from other relevant department of the SEC or from the Compliance Monitoring Division (CMD) of the Company Registration and Monitoring Department (CRMD), whichever is applicable | Yes | Yes |
| Endorsement clearance from appropriate government agencies | if applicable | if applicable |
A Certificate of Filing of Amended Articles of Incorporation (and of By-laws for OSC) will be issued by the SEC upon approval of the Corporation’s conversion. The Corporation’s original SEC registration number will be retained. The newly converted OPC shall have an “OPC” suffix in its corporate name, whereas the “OPC” suffix in the name of the newly converted OSC shall now be removed.
