Title 13: Special Corporations - OPC

Question 1

Is an OPC the same with a corporation sole? Why?

Answer 1

No because an OPC is a stock corporation while a corporation sole is a nonstock corporation made for religious purposes.

Question 2

Who may form an OPC? (3)

Answer 2

natural person
trust
estate

Question 3

Who may not form OPCs? (7)

Answer 3

1. banks and quasi-banks
2. preneed
3. trust
4. insurance
5. public and publicly-listed companies
6. non chartered GOCCs
7. a natural person licensed to exercise a profession (for the purpose of exercising such profession)

Question 4

True or False: As an incorporator, the trust as being used by the law refers to a trust entity.

Answer 4

False. It refers to the subject being managed by a trustee.

Question 5

If the single stockholder is a trustee, administrator, executor, etc., what needs to be submitted at the time of incorporation?

Answer 5

Proof of authority to act on behalf of the trust or estate

Question 6

True or False: If the stockholder is a natural person, she needs not be of legal age.

Answer 6

False

Question 7

What is the exception to natural persons licensed to exercise a profession not allowed to form OPCs for exercise of such profession?

Answer 7

Special laws that provide otherwise

Question 8

True or False: A foreign natural person may not form an OPC.

Answer 8

False. It is allowed but it is subject to requirements and restrictions.

Question 9

What is the term of existence of an OPC put up by a trust or an estate?

Answer 9

The same term of their existence as trust or estate.

Question 10

True or False: The OPC under the name of the estate may be dissolved upon proof of Partition.

Answer 10

True

Question 11

True or False: The OPC under the name of the Trustee may be dissolved upon proof of termination of the trust.

Answer 11

True

Question 12

What is the minimum authorized capital stock of an OPC?

Answer 12

None unless provided by special laws

Question 13

Security agency OPCs, as an exception to the rule, have what minimum capital stock requirement?

Answer 13

500k

Question 14

Freight forwarder OPCs, as an exception to the rule, have what minimum capital stock requirement?

Answer 14

250k

Question 15

True or False: 30% of the authorized capital stock is required to be paid up at the time of incorporation.

Answer 15

False. No portion is required to be paid up.

Question 16

What are the additional contents of AOI for OPCs? (2)

Answer 16

1. details of trustee or administrator and their proof of authority
2. details of nominee and alternate nominee and their limit of authority

Question 17

True or False: An OPC is also required to submit bylaws as it is still a stock corporation.

Answer 17

False

Question 18

What should be indicated in the name of an OPC?

Answer 18

the letters OPC at the end or below the name

Question 19

What are the additional and mandatory roles of the single stockholder?

Answer 19

Sole director
President

Question 20

True or False: The single stockholder may be the sole director, president, treasurer, and secretary all at the same time since he is the only stockholder and incorporator.

Answer 20

False. He can be all except secretary.

Question 21

What is the additional requirement if the sole stockholder is also the treasurer?

Answer 21

A (surety) bond

Question 22

True or false: The undertaking of the single stockholder to be the treasurer of the OPC shall be in writing.

Answer 22

True

Question 23

Within how many days from the issuance of the certificate of incorporation should the OPC appoint a secretary, treasurers and other officers?

Answer 23

15 days

Question 24

Within how many days from the appointment of secretary and treasurer should the OPC notify SEC?

Answer 24

5 days

Question 25

What are the special functions of the corporate secretary?

Answer 25

1. keep minutes and books 2. notify the nominee and alternate nominee of the death or incapacity of single stockholder 3. notify SEC of the death of single stockholder and the details of the legal heirs 4. call nominee or alternate nominee and legal heirs to a meeting for election of new director or amendment of AOI

Question 26

Within how many days from the occurrence of the death or incapacity of the stockholder should the secretary inform SEC and the nominee?

Answer 26

5 days

Question 27

True or False: The 4 special functions of the corporate secretary are all fixed and the OPC cannot add to it.

Answer 27

False. The OPC may add as it deems necessary

Question 28

What are the roles of the nominee and the alternate nominee?

Answer 28

Nominee - to take place if the single stockholder becomes incapacitated or dies Alternate nominee - to take the place of the nominee if she becomes incapacitated or dies

Question 29

True or False: The written consent of the nominee and alternate nominee need be attached to the AOI of the OPC.

Answer 29

True

Question 30

How and when should the nominee and alternate nominee be withdrawn?

Answer 30

in writing before the incapacity or death of the single stockholder

Question 31

When incapacity is temporary, what is the term of the nominee?

Answer 31

Until the single stockholder regains her capacity

Question 32

When incapacity is permanent, what is the term of the nominee?

Answer 32

until the legal heirs have agreed on a new single stockholder

Question 33

True or False: To change the nominee and alternate nominee, the single stockholder shall amend the AOI.

Answer 33

False. AOI need not be amended. Submission of the details of the new nominee and alternate nominee along with their written consent suffice.

Question 34

When action is need in any manner, how is this done since there are no meetings?

Answer 34

The single stockholder writes a resolution, signs it, to be recored in the minutes book

Question 35

Read reportorial requirements

Answer 35

1. annual financial statements audited by an independent auditor (only if assets and liabilities are more than 600k, if not the treasurer's certification and oath is enough) 2. report of explanations and comments by the single stockholder 3. disclosure of self-dealings and related party transactions 4. other reports required by SEC

Question 36

When can an OPC be placed in a delinquent status?

Answer 36

If it fails to submit the reportorial requirements 3 times, consecutively or intermittently, within a period of 5 years

Question 37

True or False: Since the single stockholder contributed her personal assets to the corporation and manages it alone, she is also liable for it alone.

Answer 37

False. They have separate personalities.

Question 38

When can a single stockholder claim limited liability?

Answer 38

when she can claim and prove that the corporation is adequately financed

Question 39

If the single stockholder cannot prove that the corporation is adequately financed, what happens?

Answer 39

The veil can now be pierced and the single SH can be held jointly and severally liable for the debts of the corporation

Question 40

True or False: The principles of piercing the veil applies with equal force to OPC as with other corporations.

Answer 40

True

Question 41

When can an ordinary stock corporation become an OPC?

Answer 41

When a stockholder acquires all the stocks of an ordinary stock corporation, she may apply for a conversion to OPC.

Question 42

When does an OPC conversion from an ordinary stock corporation take effect?

Answer 42

Once SEC issues a certificate of filing of amendment of AOI reflecting the conversion

Question 43

When can an OPC become an ordinary stock corporation?

Answer 43

After due notice to SEC of such fact

Question 44

Within how many days should the notice of the circumstances leading to the conversion of an OPC to an ordinary stock corporation be made?

Answer 44

60 days from occurrence

Question 45

When does an ordinary stock corporation conversion from an OPC take effect?

Answer 45

Once SEC issues a certificate of filing of amendment of AOI reflecting the conversion

Question 46

When shall the nominee transfer the shares to the legal heirs in the case of the death of the single stockholder?

Answer 46

within 7 days from the receipt of an affidavit of heirship or self adjudication

Question 47

Within 60 days from the transfer of shares to the legal heirs, the heirs should notify SEC on their decision. This decision is between what?

Answer 47

Winding up the corporation or converting it into an ordinary stock corporation