Change Company Name in the Philippines

S corp election can be helpful when your business generates enough profit that the savings on self-employment taxes outweigh the costs of running payroll (like payroll processing fees, workers’ comp insurance, and additional tax filings). If you’re starting a business with partners, consider forming a multimember LLC instead—you’ll get liability protection while maintaining tax flexibility and operational control. However, LLPs are typically restricted to professional service businesses—lawyers, accountants, architects, doctors—based on state regulations. Limited partnerships (LPs) include at least one general partner with unlimited personal liability and full management control, plus one or more limited partners who invest capital but have limited liability and cannot participate in daily management. Creditors can pursue any partner’s personal assets for business debts, even if another partner’s actions created the liability.

An ROHQ enables a foreign company to coordinate, support, and provide administrative or technical services to its regional affiliates, subsidiaries, or branches from the Philippines. This structure is suitable for foreign investors looking to directly engage in the Philippine market without forming a separate domestic changing company types in the philippines corporation. An OPC allows a single shareholder, whether an individual, trust, or estate, to form a corporation with limited liability. Choosing the right structure is essential to ensure compliance, maximize control, and align with your long-term business goals.

How to Transfer Business Ownership in the Philippines?

Professional advice can help you choose the right business structure for your venture. C corporations face more regulatory stipulations but fewer limits to raising capital. Partnerships and sole proprietorships tend to provide owners more control but don’t protect them against personal liabilities. In states such as California and Virginia, professionals can organize into limited liability partnerships (LLPs) or LLCs instead. Some professions requiring special certification or licenses—such as medical or legal practices—face limits on the types of business their practitioners can form. Small business owners in the US can incorporate in any of the 50 states.

If your business partner processes a customer refund incorrectly and triggers a lawsuit, your personal assets are exposed. An LLC is a hybrid structure that combines the liability protection of a corporation with the tax flexibility of a partnership, making it particularly attractive for online sellers concerned about product liability and customer data security. A business structure is the legal framework that determines how your business is organized, taxed, and protected.

A Deed of Sale or Contract of Sale must be prepared to document the transfer of ownership. The views or opinions expressed in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. As the EoPT Law expanded the classification of taxpayers, the BIR can leverage these new classification to enhance the efficiency and equity of tax administration, and to better align with the modern economy and tax environment. It is important to note that taxpayers reclassified due to a BIR-initiated reclassification cannot request reclassification within the same taxable year, unless there are meritorious reasons duly verified by relevant information.

Moog is the biggest aerospace manufacturer with base in Baguio; the company produces aircraft actuators in their manufacturing facility. This reform aims to enhance the country's competitiveness in attracting long-term foreign direct investment by offering greater leasehold security for commercial and industrial projects. In 2025, the Philippines enacted Republic Act No. 12252, amending the Investors’ Lease Act to allow foreign investors to lease private land for up to 99 years, up from the previous limit of 75 years (50 + 25 extension). We’ll discuss your needs and how we can help you setup and manage your business in the Philippines. Non-profit generating corporation that does not issue shares in the form of stocks to its members. The president cannot also act as treasurer, except in the case of a one person corporation.

Philippines business entity comparison

The BIR’s ability to initiate reclassifications based on updated financial data ensures that taxpayer categories remain accurate and reflective of their current economic status. Reclassification requests may be submitted by taxpayers manually to their home Revenue District Office (RDO) or through ORUS together with the required supporting documents. Finally, those whose gross sales exceed P1,000,000,000 are classified as Large Taxpayers.The initial classification of taxpayers registered in 2022 and prior years will be based on the declared gross sales in their 2022 Income Tax Returns (ITR). A taxpayer is classified as “Small” if its gross sales for a taxable year is at least P3,000,000 but less than P20,000,000, while a Medium Taxpayer is one whose gross sales is at least P20,000,000 but less than P1,000,000,000.

Singapore company structures for foreign entities: at a glance

Similarly, this is a situation disliked by creditors, business partners, and co-partners. All you need to do is decide on your business name and register it with the Department of Trade and Industry. You might be surprised that the company types, while coming with different names, are remarkably like that in your home country, especially for the USA or European economies and other countries based on those systems. You are probably wondering what options you have in terms of company setup. Themis Partner is not a law firm or a substitute for an attorney or law firm.

Most small online sellers benefit more from LLC or S corp structures that avoid the second layer of taxation. Understanding when the benefits of a C corp outweigh its tax costs can help you avoid overpaying—and open up opportunities for growth capital that other structures may not provide. This means even with LLP protection, professionals remain personally liable for their own malpractice, though they’re protected from liability for other partners’ malpractice. This structure works when you need http://beauty.netguru.net.nz/2021/05/05/accrual-definition-journal-entry-examples/ investors who want ownership stakes but not operational involvement.

Authority

Each form of business organization in the Philippines comes with distinct advantages and challenges. The owner pays graduated income tax rates or may opt for the 8% Gross Receipts Tax. Below are the five main forms of business organization recognized in the country—each governed by different agencies and suited for specific goals. Understanding these four factors early ensures you choose a structure that balances protection, profit, and growth, setting your negosyo on the right path from day one. While setup might take longer, these structures often come with added credibility and access to larger opportunities.

This structure fits organizations genuinely focused on public benefit rather than commercial profit—educational platforms offering free resources, charitable organizations supporting specific causes, or community groups providing services.
If you’re planning to accept foreign investment or establish foreign operations, C corporation structure is often the smart choice because it does not have citizenship restrictions on ownership, making it accessible to a wider range of investors.
A non-stock corporation does not generate profit or issue stock shares to its members.
Corporate evolution often necessitates revisions to the Articles of Incorporation in the Philippines to reflect strategic realignments or regulatory adjustments.
With more than 36.2 million small businesses operating in the US in 2025, choosing the right type of business structure is one of the most important decisions you’ll make as an entrepreneur.
It is created under Philippine law and registered with the Securities and Exchange Commission (SEC).

A Micro Taxpayer is one whose gross sales for a taxable year is less than P3,000,000. The classification is determined based on a taxpayer’s gross sales. Popular destinations among tourists include Boracay, Palawan, Cebu and Siargao. This change allows for the infusion of foreign capital into the renewable energy (RE) industries.

Additionally, the proposed business activities must not fall within the FINL, which restricts or prohibits certain investments by foreign entities. Contrary to popular belief, foreign entities can establish sole proprietorships in the Philippines if they meet the minimum capital requirement of USD 200,000. The owner exclusively holds all profits and assets and is personally liable for any losses or debts incurred by the business.

How business structures compare

Professional services corporations get taxed like C corps, subject to corporate tax and tax on shareholder distributions. https://blcts.com/a-complete-guide-to-retail-accounting-for-business/ Regardless of company structure, all businesses must register a name; companies often choose one that reflects their products, services, location, or other important details. A limited liability company (LLC) protects its owners (known as “members”) from being financially liable for most business debts and damages, protecting their personal assets.

However, they must pay payroll taxes (such as Medicare and Social Security) on such distributions rather than passing the credits onto shareholders’ personal tax returns.
Yes, but often requires a Philippine corporation, compliance with Foreign Investment Act restrictions, and registration with the Philippine Government Electronic Procurement System (PhilGEPS).
An OPC allows a single shareholder, whether an individual, trust, or estate, to form a corporation with limited liability.
If you’re starting a business with partners, consider forming a multimember LLC instead—you’ll get liability protection while maintaining tax flexibility and operational control.
Emerhub does not assume any liability for decisions made based on this information.

Please note, however, that this business entity does not have a separate legal personality from you. Business ownership transfer involves legal procedures and requirements, including the transfer of assets, liabilities, contracts, licenses, permits, and tax obligations. Business Ownership transfer in the Philippines refers to the process of transferring the ownership of a business from one entity or individual to another. This classification allows for more targeted tax compliance strategies, ensuring that smaller businesses are not overburdened while larger entities are adequately monitored. To ensure that the tax obligations of businesses accurately reflect their current economic status and gross sales, the RMO provides a reclassification process which can be initiated by either the taxpayer or the BIR.

Business structure doesn’t restrict which platforms are available for selling—sole proprietors, LLCs, and corporations can all sell through Shopify. However, selling without liability protection means your personal assets are exposed to lawsuits related to products or business activities. C corporations face double taxation on distributed profits, making them expensive unless you’re keeping profits in the business or need their unique benefits for fundraising. Cooperative structure fits collective businesses where shared ownership advances the mission—worker-owned ecommerce businesses, agricultural producers selling collectively, or artisan marketplaces where makers jointly own the platform. However, you can elect S corporation tax treatment if you meet S corp eligibility requirements, avoiding double taxation while maintaining your benefit corporation legal status.

Changing a company’s main, secondary, or both objects of activity involves the same straightforward process of amending the Articles of Incorporation. The Foreign Investment Negative List (FINL) categorizes sectors with zero, limited, or full foreign ownership permitted. A sole proprietorship is the simplest and most common business structure for individuals seeking full control. Broadly, businesses are classified as either domestic or foreign entities, each with unique regulatory regimes and scopes of activity. The Philippine legal system recognizes several forms of business organizations that cater to different operational needs and ownership profiles. But if you’re aiming to grow, attract investors, or limit personal liability, then an SEC-registered corporation or partnership could be the better fit.

It liberalized foreign ownership rules, allowing up to 100% foreign ownership in most industries not listed under the Foreign Investment Negative List (FINL). Since this structure cannot earn income, it is exempt from local income tax, making it a low-cost option for investors looking to establish a presence in the Philippines. A branch office is an extension of your foreign corporation that can conduct commercial activities and generate income in the Philippines.

Here’s what each structure means for your day-to-day operations, long-term growth, and legal obligations. When you’re shipping products across state lines, handling customer payment data, and potentially facing product liability claims from anywhere in the country, the protection your structure provides becomes critical. Understanding the types of business you can form is especially important if you sell online, where you’re exposed to product liability across multiple states and customer data security concerns that brick-and-mortar stores may not face. The core agencies—SEC, DTI, BIR, and LGUs—each have their own registration steps and requirements.