Philippine law provides for a number of business forms, including:

Corporation
Partnership
Sole Proprietorship
Branch
Representative Office

Corporation

A corporation in the Philippines is a juridical entity that provides limited liability for its shareholders.

Key aspects of a Corporation include:

Formed by at least 5 natural persons and up to 15
Legal entities may not form a corporation, but may become shareholders after it is incorporated
At least 25% of the authorized capital must be subscribed and paid up at the time of incorporation
Minimum paid up capital is PHP 5,000, although if foreign equity participation exceeds 40%, the minimum paid up capital is USD 200,000 (100,000 for certain approved companies involving advanced technology)
Liability of shareholders is generally limited to their capital contribution to the corporation
In certain cases responsible members may be held liable

Partnership

Partnerships in the Philippines are typically used by professionals, such as law firms and accounting firms. They may be formed as general or limited.

Key aspects of a Partnership include:

Formed by 2 or more persons
Is considered a juridical entity with a personality distinct and separate from its members
When formed as a general partnership, all partners have unlimited liability
When formed as a limited partnership, the general partners have unlimited liability while the limited partners' liability is limited to their contribution to the partnership

Sole Proprietorship

A sole proprietorships is the simplest business form in the Philippines and are the easiest to establish.

Key aspects of a Sole Proprietorship include:

Formed by a single individual
The owner has total control as well as unlimited liability
The sole proprietorship and the individual owner are treated as one and the same under the law

Branch

Foreign companies are allowed to conduct business in the Philippines through a branch.

Key aspects of a Branch include:

Considered a legal extension of the foreign company (single-identity)
Liability of the branch extends to the foreign company
Contracts between the foreign company and the branch are not allowed under the single-identify concept
Subject to the same paid-up capital requirements as a corporation

Representative Office

Foreign companies may also establish a representative office.

Key aspects of a Representative Office include:

Its activities are limited to information dissemination, promotion of products, and facilitation of orders of the head office’s customers
It may not participate in the pricing or distribution of products, and may not derive income in the Philippines.
Operating capital of at least $30,000 must be remitted to cover expenses

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