One-man corp concept to inspire entrepreneurs

CEBU, Philippines — The creation of one-man corporations is seen to encourage more entrepreneurs to formalize their businesses.

Cebuano business coach Virgilio Espeleta, who is also president of the Cebu Chamber of Commerce and Industry, said this will lure more entrepreneurs to register their companies.

"This will encourage entrepreneurs to operate and formalize their registration above board," he told The FREEMAN.

"However I advise that as they grow, they should transition to be a full blown corporation so that investments, governance and management of a growing business can be sustained," the business leader said.

President Duterte recently signed a law that seeks to update the 38-year-old Corporation Code and introduces the “one-person corporation” concept, which allows a single person to form a corporation.

Republic Act 11232 would make it easier for local business owners and investors to register their businesses with the Securities and Exchange Commission.

While the one-man concept is generally a good thing, Espeleta believes growing a corporation may also necessarily mean having partners to manage the business.

"Even succession and professionalization of the business may not be implemented if the company remains as a one man show," the business adviser said

The amended law also removes the requirement for minimum capitalization, permits the electronic filing of reportorial requirements, allows attendance in meetings via remote communication or in absentia, and provides protection to minority stockholders.

The new law also simplifies the name verification process and grant perpetual life as the default option for corporations.