Register Non-Profit or Non-Stock Company in the Philippines
Non-stock corporations or foundations in the Philippines may be formed for charitable, religious, educational, professional, cultural, fraternal, literary, scientific, social, civic service, or similar purposes, such as trade, industry, agricultural and like chambers, or any combination thereof.
Certain accredited non-stock, non-profit corporations in the Philippines are exempt from income tax on donations, grants, and gifts provided they are:
1. Organized “exclusively” for one or more of the following purposes: religious, charitable, scientific, athletic, social welfare, cultural purposes, or for the rehabilitation of veterans; and
2. No part of their net income or asset belongs to or inures to the benefit of any member, organizer, officer, or any specific person
Profits generated from business activities are taxed, regardless of the disposition of the income.
Non-stock non-profits that are certified as donee-institutions by the Bureau of Internal Revenue are entitled to receive tax-deductible donations
Securities and Exchange Commission (SEC) Registration Requirements
Generally, non-profit entities have the same formal registration requirements as normal business enterprises. However, in lieu of the authorized capital stock and minimum subscription requirements, it is required that the majority of its members should have Philippine residency. In lieu of the capital stock requirement and the attestation in the Treasurer’s affidavit that at least 25% of the subscribed stocks had been paid, non-stock/non-profit corporations are only required to state the amount of capital or money contributed or donated by specified persons.
Capitalization requirements indicated in the Foreign Investment Negative List (FINL) are inappropriate for a strictly non-profit body and SEC.
A non-stock corporation may use the word “foundation” in its corporate name, provided that it:
- Meets the requirements stated above;
- has initial capital of at least one million Philippine Pesos (PHP 1,000,000) as evidenced by a Notarized Certificate of Bank Deposit issued by the bank;
- conducts its public fundraising campaigns in compliance with applicable law and consistent with its submitted Modus Operandi or Plan of Operation; and
- submits to the Securities and Exchange Commission (SEC) in the Philippines (which is also the registration authority for non-stock corporations) a written statement of its willingness to allow the Commission to conduct an audit of its corporate books and records.