FOLLOWING the signing of a law updating the decades-old Corporation Code, 1-Ang Edukasyon Party-list Rep. Salvador B. Belaro Jr. encouraged students to become entrepreneurs.
Belaro, one of the principal authors of the amended law, said students at least 18 years old and studying in senior high school or college can soon establish their own companies. The lawmaker said this could be accomplished because the amended Corporation Code now allows the creation of one-person corporations and removes the minimum capitalization requirements enshrined in the old law.
According to Belaro, students can avail themselves of microloans for start-up capital from the Small Business Corp. of the Department of Trade and Industry, or from any microfinance conduits accredited by the Bangko Sentral ng Pilipinas.
Belaro also said starting a business will no longer be just practice sets, on-the-job training, or through a practicum program because the amended Corporation Code can let them become entrepreneurs who deal with the hard realities of owning and running a business.
The bill’s principal coauthor, House Committee on Good Government and Public Accountability Chairman Xavier Jesus D. Romualdo, said the law will allow corporations in the Philippines to respond to and meet the needs and realities of the present times.
“Our Corporation Code was enacted in 1980,” Romualdo said. “Obviously, much has changed in how the world does business, communicates and undertakes commercial transactions over the last 38 years.”
He added that by updating and modernizing the main body of corporate law, the revised Corporation Code will encourage entrepreneurship and the creation of new businesses, contribute to ease of doing business, strengthen corporate governance, better protect the rights of stockholders, deter corporate abuse and fraud, and bolster anticorruption measures and the regulatory authority of the Securities and Exchange Commission (SEC).
Recently signed into law by President Duterte, the revised Corporation Code aims to strengthen and simplify corporate governance standards for a more business-friendly environment.
The new Corporation Code will improve ease of doing business in the country by allowing a one-person corporation, removing the minimum capital requirement and providing for a perpetual existence of corporation.
Since the new code allows for a one-person corporation, local business owners and investors could also stop the practice of naming the entire household as incorporators simply to comply with the stringent requirement of the law.
Moreover, the new code also allows a one-person corporation to apply for loans and grants.
The new code also introduces provisions that seek to remove the minimum number of incorporators, permit the electronic filing of reportorial requirements and attendance in meetings via remote communication or in absentia, among others—practices that were not recognized in the old law.
It also aims to strengthen corporate governance standards and provide protection to minority stakeholders by requiring, among others, corporations vested with public interest to have independent directors.