In the Philippines, all entrepreneurs or businesspersons are required to register their business with the Securities and Exchange Commission (SEC). The SEC is a national government agency that oversees and regulates tradable financial assets within the country. Beyond this, it also manages the registry of legally operating businesses by monitoring, supervising, and investigating the actions of both companies and individuals to ensure compliance with the law.
Having your business registered with the SEC allows you to establish your businesses legally and participate in the country’ market. It also gives you an opportunity to buy or trade shares of stock, bonds, interests from another business entity or invest in other financial assets. In this blog, you’ll learn everything you need to know about registering a business with the SEC, particularly using a virtual office address.
Electronic Simplified Processing of Application for Registration of Company (eSPARC)
The Electronic Simplified Processing of Application for Registration of Company (eSPARC), implemented by the Securities and Exchange Commission (SEC), is an online platform for company registration in the Philippines. This system handles registrations for One Person Corporations (OPCs), domestic stock or non-stock corporations, and entities with up to fifteen (15) incorporators, which may be natural persons, partnerships, associations, or corporations. Furthermore, eSPARC enables applicants or their authorized representatives to verify if their proposed business names are available and register their business conveniently even at their homes.
Types of eSPARC Application Process
eSPARC has two types of application process: Regular Processing and One-Day Submission and E-registration of Companies (OneSEC) Processing.
Regular Processing
The Regular Processing caters the following type of business entities:
One Person Corporation (OPC) is a type of corporation with a single stockholder, who may be a natural person, estate or trust entity. Unlike regular corporations, an OPC doesn’t require multiple incorporators or a board of directors for registration.
Domestic Corporations
Stock Corporations are profit oriented entities that have dividends and shareholders who receive a portion of the company’s earnings through shares of stock.
Non-stock Corporations are non-profit entities and their income aren’t distributed as dividends as they are formed for charitable, religious, educational, cultural, professional, or similar purposes.
Partnerships consist of individuals who share equally in the management and profits of the business. These may take the form of professional, general, or limited partnerships. Unlike corporations, partnerships are taxed on an individual basis, and partners may be liable for the company’s debts and obligations.
Foreign Corporations are entities formed under the laws of another country. They are allowed to operate their business in the Philippines as long as they comply with the requirements and reciprocal business rights are granted to Filipino citizens and companies in the country.
One-Day Submission and E-registration of Companies (OneSEC) Processing
The OneSEC Processing only caters domestic stock corporations with the following qualifications:
All Filipino company classifications, meaning incorporators, directors, and subscribers of the corporation must be natural persons and resident of the Philippines
Proposed corporate name must have a name descriptor based on its industry classification
Proposed corporate name must not contain a Trade Name or any set of letters that act as an acronym, and must not be subject to any name appeal
Company has a perpetual corporate term of existence
Company is not located in any economic zone
Company is able to pay registration fees in the SEC Payment Portal
None of the company officers or members have pending or convicted criminal cases, administrative cases, or government sanctions
SEC Business Registration Requirements in the Philippines
The following requirements must be submitted with the Securities and Exchange Commission (SEC) during the day of your business registration:
1.) Proposed Business Name
The first and the most important requirement for an eSPARC registration is a unique business name. To prevent any delay or conflict with your application, ensure that your proposed name complies with SEC corporation name guidelines. The system will inform you whether your proposed business name is still available or not.
It is advisable to prepare two or more alternative business names so you can quickly file for another verification request in case your first proposed business name is unavailable or rejected. Additionally, you can file for an appeal to re-evaluate your preferred proposed business name.
2.) Business Address
When registering your business with the SEC, a business address is required for legal identification, regulatory compliance, and financial transactions. A business address is also essential for opening a corporate bank account and securing loans.
If you don’t have a budget to lease or buy a physical office space in the Philippines, you may register your business by using a virtual office address. This is also essential for international companies that want to operate their business but don’t have a physical office space in the country.
3.) Company and Company Officers Information
For eSPARC to generate important business documents, you are required to provide the following information:
Company Representative Details, includes the name, job position, Tax Income Return (TIN), and contact information of the person filing the SEC registration
Company Type, Classification, and Industry
Company Address, Purpose, and Fiscal Year Details
Company’s Term of Existence, which is the number of years the company will be in operation
Company’s Capital Structure, which is the total amount of your authorized capital stock, number of shares, and other
Company Officers, Incorporators and Directors
Additionally, the information needed on your registration may vary depending on the type of your company.
4.) Documentary Requirements
At the final stage of your online registration through eSPARC, you will be required to upload specific documents depending on the type of your company and application. Remember that all submitted documents must be in PDF format and the file name must match the content of the document that will be uploaded.
The following documents must be uploaded:
Cover Sheet
Articles of Incorporation or Articles of Partnership
By-Laws
Treasurer’s Affidavit
Secondary Licenses
Endorsements from Other Government Agencies
Name Appeal, if the proposed business name has been rejected during the verification stage
SEC Business Registration Process in the Philippines
Register your business with SEC by following this step-by-step guide:
STEP 1: Prepare the Requirements
For a smooth transaction, it is advisable to prepare the required documents and two or more proposed business names beforehand. This will help you focus on filling out the needed information and submitting the requirements after without the hassle of converting them into a PDF format.
STEP 2: Create an eSECURE Account
Visit the official website of the Securities and Exchange Commission (SEC) at https://esparc.sec.gov.ph/application. To initiate your application, you or your duly authorized representative is required to register an account with eSECURE. This will be used for logging in with eSPARC to proceed with the application process.
STEP 3: Choose the Appropriate Type of Processing Application
Once you have logged in your account, you will be redirected to the eSPARC portal. Select the appropriate processing method for your application, either OneSEC Processing or Regular Processing.
STEP 4: Name Verification
After selecting between the two types of processing, you or your authorized representative will be required to provide your preferred processing office, contact details, company type, and company name.
On the Summary Notice page, click ‘Send OTP to email’ and enter the received OTP from your registered email. Your application should appear as ‘Draft’ status. While waiting for the verification, you can proceed to the next step of the registration process.
If the verification result is Passed, go to your saved application in eSPARC and click ‘Reserve Company Name’ to use your approved company name in your SEC registration forms. Ensure to submit your application by the date mentioned in your status page, otherwise your reserved name will automatically expire.
If the result is Failed, the reason will be stated in your application. To change your proposed business name with your alternative name, click ‘Retry’ to return to the name verification section. If you wish to use the rejected name, you may file for name appeal, which then will be requested from you or your authorized representative to submit at the uploading section.
STEP 5: Company Details
Fill out the necessary details about your company, such as your office address and contact details. Ensure that all required information is complete and accurate.
STEP 6: Capital Structure and Company Officers
To complete the capital structure page, all incorporators must have a credentialed eSECURE account. Provide the incorporator’s eSECURE ID and other necessary information. Make sure to double check if the provided information is correct.
STEP 7: Beneficial Ownership Declaration
For OneSEC Processing, you will be directed to Step 5 which is the Beneficial Ownership Declaration. Tick either ‘Yes’ or ‘No’, depending on which is applicable to your company.
STEP 8: Submission of Documentary Requirements
After filling out the application form, you will be required to provide the documentary requirements to support your application. If your proposed business name has been rejected and you have tagged the application for appeal in Step 1, you will be asked to upload a name appeal.
STEP 9: Application Review
Once the necessary documents have been uploaded, you will then be asked to check if all provided information is correct and complete.
STEP 10: Pay the Registration Fee
Pay the registration fee via eSPAYSEC by selecting your preferred payment option. Enter the verification code and follow the given payment instructions. Once paid, a payment confirmation and electronic official receipt will be sent on your registered email. An email notification with the subject “Registration Complete or Approved” will also be sent to you or your authorized representative’s email address.
STEP 11: Download the Digital Certificate of Incorporation
Upon completion of your application, you may now download the digital copy of Certificate of Incorporation by clicking the link provided in the email you have received from the SEC.
Estimated Cost for SEC Business Registration in the Philippines
To be prepared with the expenses, here’s the estimated cost for business registration with the Securities and Exchange Commission (SEC):
Description | Fees |
SEC Registration Fee (⅕ of 1% of the authorized capital) | PHP 2,000.00 |
Stock and Transfer Book (STB) Registration | PHP 150.00 |
Company Bylaws | PHP 1,000.00 |
Name Verification and Reservation | PHP 100.00 |
Documentary Stamp Tax (DST) | PHP 30.00 |
Legal Research Fee | PHP 30.00 |
TOTAL COST: PHP 3,310.00 | |