Incorporation Agreement Template for the Philippines

Yes, an Incorporation Agreement is legally binding in the Philippines under the Revised Corporation Code (Republic Act No. 11232). Once properly executed by all incorporators and filed with the SEC, it becomes the foundational legal document that establishes the corporation's existence and governs the relationship between incorporators. The agreement creates enforceable obligations and rights among the parties involved in forming the corporation.

No, you cannot incorporate a company in the Philippines without an Incorporation Agreement. This document is mandatory for SEC registration under the Revised Corporation Code and must be submitted along with the Articles of Incorporation and other required documents. The SEC will not process your incorporation application without a properly executed Incorporation Agreement that meets all legal requirements.

Under the Revised Corporation Code of the Philippines, you need a minimum of 5 incorporators and a maximum of 15 incorporators for an Incorporation Agreement. All incorporators must be natural persons, and at least majority of them must be Philippine residents. Each incorporator must subscribe to at least one share of stock and sign the Incorporation Agreement.

An Incorporation Agreement is a contract between incorporators that establishes their mutual obligations and the corporation's internal governance, while Articles of Incorporation is the public document filed with the SEC that formally creates the corporation. The Incorporation Agreement governs the relationship between incorporators and includes detailed provisions about management and operations, whereas the Articles of Incorporation contains basic corporate information required by law for public registration.

Preparing an Incorporation Agreement in the Philippines typically takes 3-7 business days with proper legal assistance, depending on the complexity of the corporate structure and capitalization arrangements. The preparation time may extend to 2-3 weeks if multiple revisions are needed or if there are complex shareholding arrangements. However, this doesn't include the additional time required for SEC processing and approval of the incorporation application.

Yes, foreign nationals can be incorporators in a Philippine Incorporation Agreement, but at least majority of the incorporators must be Philippine residents under the Revised Corporation Code. Additionally, foreign ownership restrictions may apply depending on the corporation's intended business activities, with some industries requiring majority Filipino ownership. The capitalization and shareholding structure must comply with the Foreign Investments Act and other applicable laws.

Common reasons for SEC rejection include insufficient authorized capital stock (below minimum requirements), improper shareholding distribution among incorporators, missing mandatory clauses required by the Revised Corporation Code, and non-compliance with foreign ownership restrictions for certain business activities. Other frequent issues include incomplete incorporator information, invalid corporate purposes, and failure to meet residency requirements for majority of incorporators.