A corporation with a single stockholder, introduced under the Revised Corporation Code of 2019 (RA 11232). Provides limited liability unlike sole proprietorship.
The One Person Corporation was introduced by Republic Act 11232 (Revised Corporation Code) which took effect in 2019. It allows a single individual to form and operate a corporation — eliminating the old requirement for at least five incorporators. The OPC provides the primary benefit of a corporation — limited liability — to solo entrepreneurs who previously had only the high-risk sole proprietorship option.
In an OPC, the single stockholder's personal assets are protected from business debts and liabilities (barring fraud or grossly negligent acts). The OPC is a separate juridical entity registered with the SEC. It files corporate income tax returns (BIR Form 1702) rather than individual returns, and is subject to the 25% corporate income tax rate (or 20% for SMEs with taxable income not exceeding ₱5,000,000).
In practice: Architect Rico Gonzales earns ₱4,000,000 annually in consulting fees and wants to protect his home from potential liability claims from dissatisfied clients. He forms "Rico Gonzales Design OPC" with himself as the sole stockholder. Now his professional income flows through the corporation, and his personal house and savings are shielded from business creditors.
Why it matters: The OPC bridges the gap between sole proprietorship (simple but risky) and a full multi-stockholder corporation (protective but requires multiple owners). For solo business owners earning above ₱800,000 annually — where the graduated individual income tax rate climbs steeply — the 25% flat corporate rate may also be more favorable than personal rates.
Tradeoff: OPCs face more administrative requirements than sole proprietorships — annual SEC reports, audited financial statements, and corporate governance obligations — so the compliance cost must be weighed against the benefits.