TAX PROS & CONS OF ONE PERSON CORPORATION - Advantages & Disadvantages of OPC vs Sole Proprietorship скачать в хорошем качестве

TAX PROS & CONS OF ONE PERSON CORPORATION - Advantages & Disadvantages of OPC vs Sole Proprietorship

Tax Type: 1. Corporate Income Tax (not individual Income Tax rate) – 30% CIT Sales 100,000 Less: Cost of Sales 50,000 Gross Profit 50,000 Less: Expenses 30,000 Net Income 20,000 Tax Rate 30% Income Tax Due 6,000 2. Value Added Tax (Annual Sales Above P3M) – 12% VAT Rate Sales P100,000 12% Output VAT 12,000 Less: Purchases 50,000 12% Input VAT 6,000 6,000 VAT Payable 6,000 3. Percentage Tax (3% on Sales) Sales P100,000 Percentage Tax Rate 3% Percentage Tax Due 3,000 4. Final Tax (10% Dividends) Stockholder Cash Dividends 10,000 Final Tax Rate 10% Final Tax Due 1,000 5. Donors Tax (6% if individual donor, 30% if OPC) 6. Documentary Stamp Tax Subscribed Capital Stocks P125,000 DST P2 for every P200 2/200 DST Due 1,250 1) Who may form an OPC? Only a natural person, trust, or an estate may form an OPC. 2) Who cannot form an OPC? a. Banks and quasi-banks b. Preneed companies c. Trust companies d. Insurance companies e. Public and publicly-listed companies f. Non-chartered government-owned and -controlled corporations g. A natural person who is licensed to exercise a profession (for the purpose of exercising such profession) except as otherwise provided under special law 3) What is the minimum authorized capital stock? • A single stockholder may not be the corporate secretary. 5) How will the company’s affairs be managed in case of the death or incapacity of a single stockholder? • The law requires a single stockholder to designate a nominee and an alternate nominee who shall, in the event of the single stockholder’s death or incapacity, take the place of the single stockholder as director and shall manage the corporation’s affairs. The nominee shall act as the director until the legal heirs of the single stockholder have been lawfully determined, and the heirs have designated one of them or have agreed that the estate shall be the single stockholder of the OPC. The alternate nominee shall step in as the director in case of the nominee’s inability, incapacity, death, or refusal to discharge the functions as director and manager of the corporation. 6) May an ordinary corporation be converted into an OPC, and vice-versa? • Yes, subject to compliance with the application requirements with the Securities and Exchange Commission. 7) I am a foreign national. Am I allowed to form an OPC? • Yes, subject to the applicable capital requirement and constitutional and statutory restrictions on foreign participation in certain investment areas and activities (SEC Memorandum Circular No. 7, Series of 2019). 8) What are the documentary requirements for an OPC? a. Cover Sheet b. Articles of Incorporation for One Person Corporation c. Written Consent from the Nominee and Alternate Nominee d. Other Requirements, if applicable: Proof of Authority to Act on Behalf of the Trust or Estate (for trusts and estates incorporating as OPC) Foreign Investments Act (FIA) Application Form (for foreign natural person) Affidavit of Undertaking to Change Company Name, in case not incorporated in the Articles of Incorporation Tax Identification Number (TIN) for Filipino single stockholder Tax Identification Number (TIN) or Passport Number for Foreign single stockholder e. Filing Fees. The filing fees include the Registration Fee, Legal Research Fee, Name Reservation Fee, Documentary Stamp Fee, and the FIA Fee (if applicable). 9) How do I proceed with the application? a. Apply for the reservation of the corporate name. To avoid the denial of your request, the OPC name must be distinct and not similar to another reserved or registered corporate name, and must not be contrary to law, public morals, good customs or public policy. “OPC” should be indicated at the end of the corporate name. b. Submit the duly accomplished Articles of Incorporation with attached written consent of the nominee and alternate nominee and other requirements required for registration, for pre-processing. c. Pay the Filing Fees. d. Submit the hard copies of the signed and notarized documents together with the proof of e. payment of filing fees at the SEC-CRMD Receiving Unit. f. The SEC will thereafter issue the Certificate of Registration as One Person Corporation. 10) Can I register the OPC online? • Yes. On 08 April 2020, the SEC issued a notice providing for an interim Online Registration System for an OPC and corporations with two to four person incorporators. With the Online Registration System, an applicant or his duly authorized representative may input the proposed corporate name together with its trade name/s, if any, and the data to complete its corporate profile. The applicant must provide a valid and existing email account. The SEC User Guide may be accessed here