If you are looking to start a business in the Philippines, you might be searching for a Limited Liability Company (LLC). While this term is standard in the United States and other regions, the legal framework in the Philippines operates slightly differently. I have put together this guide to help you understand how limited liability works within the Filipino legal system.

Does the Philippines Have an LLC?

Strictly speaking, the Philippine jurisdiction does not use the term Limited Liability Company. Instead, the equivalent structure is a Domestic Corporation.

Under the Revised Corporation Code of the Philippines, a corporation is a separate legal entity. This means the debts and liabilities of the business are not the personal responsibilities of the shareholders. If the company faces financial trouble or legal action, your personal assets, such as your home or personal savings, are generally protected.

Key Features of a Philippine Corporation

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Separate Juridical Personality: The law treats the company as a "person" separate from its owners.

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Limited Liability: Shareholders are only liable up to the amount of their capital contribution.

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Continuity: The business continues to exist even if shareholders change or pass away.

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Taxation: Corporations are subject to a fixed corporate income tax rate, currently governed by the CREATE Act.

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Types of Limited Liability Structures

When I look at the options available for investors, there are two primary ways to achieve limited liability corporation philippines liability:

1. One Person Corporation (OPC)

This is a relatively new introduction to Filipino law. It allows a single individual to form a corporation with limited liability.

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It removes the old requirement of having at least five incorporators.

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It is perfect for solo entrepreneurs who want to protect their personal wealth.

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You must appoint a nominee and an alternate nominee to take over in case of incapacity.

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2. Standard Domestic Corporation

This is the traditional route for businesses with multiple owners.

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It can be formed by two or more people.

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It can be 100% Filipino-owned or have foreign equity, depending on the "Negative List" of restricted industries.

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The minimum capital requirement varies based on whether the business is export-oriented or serves the domestic market.

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Registration and Costs

To set up a business with limited liability, you must register with the Securities and Exchange Commission (SEC). This process involves several steps:

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Name Reservation: Ensuring your business name is unique.

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Articles of Incorporation: Defining the purpose and structure of your company.

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Bylaws: Establishing the internal rules for management.

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Funding: Opening a corporate bank account. In many cases, the minimum paid-up capital for a domestic-market enterprise with foreign equity starts at roughly $267,000 SGD (equivalent to $200,000 USD), though this is significantly lower for Filipino-owned firms.

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Choosing the right structure is vital for long-term success and risk management. While you cannot technically form an "LLC" in the Philippines, a One Person Corporation or a Domestic Corporation provides the exact same shield for your personal assets. Protecting yourself from business debts is a smart move for any serious investor.

Would you like me to draft a checklist of the specific documents you will need to submit to the SEC to get started?