Structure, and the agencies that are not the BIR

One Person Corporation, or stay a sole proprietor

A corporation with one stockholder, no bylaws and no board meetings. It is a real option and it is not a free upgrade. What changes, and what it costs you.

What most sources get wrong

Commonly said: That an OPC is a lighter-touch corporation, and that most OPC guides describe the current compliance rules.
What is actually the case: The SEC changed the rules in February 2026. The threshold above which an OPC needs audited financial statements went from ₱600,000 to ₱3,000,000, and officer appointments are now due within 20 days of approval with a ₱10,000 penalty attached. Most content on this topic predates that. Separately, an OPC loses access to the 8% option entirely, which is often the single largest number in the comparison.; SEC Memorandum Circular No. 10, Series of 2026; NIRC, on the 8% option being limited to individuals

What an OPC is

A corporation with a single stockholder, created by the Revised Corporation Code in 2019. The stockholder is also the sole director and the president. There are no bylaws to file and no annual stockholders' meeting, because there is only one stockholder to meet.

A natural person, a trust or an estate may form one. Banks and quasi-banks, pre-need, trust and insurance companies, public and listed companies, and non-chartered government-owned corporations may not. Licensed professionals generally cannot incorporate to practise their profession at all, in any corporate form, unless a special law allows it.

What incorporation involves

No minimum authorised capital, and no paid-up capital required at incorporation.
Unless a special law applicable to your line of business says otherwise.
Revised Corporation Code, OPC provisions
You must name a nominee and an alternate nominee in the articles.
They give written consent to step in as director if you die or become incapacitated, holding the position until your heirs are determined. Either can revoke consent any time before that happens.
Revised Corporation Code, OPC provisions
The corporate name has to end in OPC.
Revised Corporation Code, OPC provisions
Officers are due within 20 days of approval, and the deadline has a price.
A treasurer and a corporate secretary, filed on a separate SEC form, with a ₱10,000 penalty for missing the window. Changes need an amended filing within 5 days. The corporate secretary cannot be you. The treasurer can be, at a cost, see below.
SEC Memorandum Circular No. 10, Series of 2026
If you appoint yourself treasurer, a surety bond is mandatory.
Renewable every two years and sized to your authorised capital stock. Letting it lapse triggers a ₱10,000 fine plus monthly surcharges. This is the cost people do not price in when they decide to hold both roles.
SEC Memorandum Circular No. 10, Series of 2026
Filing is online through SEC's eSPARC.
You need the articles of incorporation and the written consent of the nominee and alternate. Published processing times and the current fee schedule are worth confirming with the SEC directly; the figures circulating on business-registration sites were not verified against a current SEC fee circular.
SEC eSPARC, with fee schedule unverified

What it does to your tax

The 8% option disappears.
It is restricted to individual taxpayers. A corporation cannot elect it, and for a lot of solo founders that single fact decides the comparison before anything else is considered.
NIRC, 8% option limited to individuals
Corporate income tax is 25%, or 20% if you are small enough.
The 20% rate applies where net taxable income does not exceed ₱5,000,000 and total assets, excluding the land the office or plant sits on, do not exceed ₱100,000,000. It is reassessed annually, so it is a rate you can fall out of.
NIRC §27 as amended by RA 11534 (CREATE)
From the fourth year, a minimum tax applies whether or not you profited.
2% of gross income as a minimum corporate income tax, from the fourth taxable year of operation. You pay whichever of that or the regular tax is higher. Excess minimum tax is creditable against regular tax for three years.
NIRC §27, minimum corporate income tax
The lower CREATE MORE rate is not for an ordinary OPC.
RA 12066 cut the rate to 20% for registered business enterprises under the enhanced deduction regime. That is for incentivised enterprises with an actual registration, not for a plain OPC with none. Do not apply it without checking registration status.
RA 12066 (CREATE MORE)
It is a separate taxpayer with its own TIN and a different form set.
The OPC registers with the BIR through Form 1903 and gets its own TIN, distinct from your personal one. Corporate returns are the 1702 series, not the 1701 series you file as a sole proprietor. Different forms, different calendar.
BIR registration rules for juridical persons
The ₱3,000,000 VAT threshold works the same either way.
Entity type does not change it.
NIRC, VAT registration threshold

The liability shield is conditional

The Revised Corporation Code puts the burden on the sole stockholder to prove the OPC was adequately financed and that its assets were kept separate from personal property. Fail to show that separation and you become personally, jointly and severally liable for the corporation's debts.

Ordinary piercing-the-corporate-veil doctrine applies with full force on top of that. An OPC is not an automatic shield. It is a shield that holds exactly as well as your bookkeeping discipline does, which is worth knowing before it becomes the reason you incorporated.

Ongoing SEC compliance

Audited financial statements once you cross ₱3,000,000 in total assets or total liabilities.
Raised from ₱600,000 by SEC MC 10-2026, for fiscal years ending after 31 December 2025. Below the threshold, a sworn statement of management's responsibility from the president and treasurer substitutes for a full audit.
SEC Memorandum Circular No. 10, Series of 2026
A General Information Sheet every year, regardless.
Filed through SEC's eFAST. No stockholders' meeting is required, but this filing still is.
SEC reporting requirements for OPCs
Miss required SEC reports three times in five years and you are delinquent.
SEC reporting requirements

Converting is not conversion

A sole proprietorship cannot be converted by amending its DTI registration. It has no legal personality separate from you, so there is nothing to convert. What people call converting is four separate jobs.

Incorporate a new OPC with the SEC. Register it with the BIR as a new taxpayer, with a new TIN, its own Form 1903 and its own Certificate of Registration. Move the business assets, contracts and permits across through documented transactions, such as a deed of sale or a deed of contribution in payment of a stock subscription. Then close the old sole-proprietor registration with the BIR on Form 1905, and its DTI and LGU registrations too.

The asset transfers can themselves trigger income tax, VAT, documentary stamp tax or capital gains tax depending on what moves and how. There is no published schedule that answers this generically; commentary consistently says it needs case-by-case review, and that is the honest answer here as well.

What this is not

It is not a way to pay less tax by default. Losing the 8% option often moves the bill in the other direction.
It is not automatic limited liability. The separation has to be real and you have to be able to prove it.
It is not an upgrade to your existing registration. It is a second entity, plus the closure of the first one.

Still unsettled

Nobody has answered these. Where the answer would change what you owe, that is a question for a professional or a formal BIR ruling request, not for a guide page.

At what income does an OPC actually become cheaper?

What is known: The mechanics are clear on both sides: corporate 20% or 25% with no 8% option and minimum-tax exposure from year four, against individual graduated rates up to 35% or the 8% option.
Where it stops: No primary source does the crossover arithmetic, and no sourced break-even figure exists. Anyone quoting you a specific income at which incorporating pays for itself is doing their own maths, which may be right and is not authority. Run the comparison against your own numbers.

The trips this involves

The forms this touches

Sources

Checked against BIR rules on Aug 6, 2026

Knowing the rule is half of it. Knowing what you owe under it, before the deadline, is the other half.

Work out what you file

Practical guidance, not legal or tax advice. Every claim above names what it rests on, and where a claim rests on secondary reporting rather than a primary text, it says so. Rules move; check the review date before relying on a figure.