How does the government regulate the non-government institutions particularly those corporations who render services that are vital to the Philippine economy?
Answers & Comments
dabiebae In the Philippines, not-for-profit organizations (NPOs) are typically organized as "non-stock corporations" registered under the Corporation Code. Non-stock corporations may be formed for charitable, religious, educational, professional, cultural, fraternal, literary, scientific, social, civic service, or similar purposes, such as trade, industry, agricultural and similar chambers, or any combination thereof (Revised Corporation Code Section 87). The Securities and Exchange Commission (SEC) of the Philippines serves as the registration authority for non-stock corporations. Some non-stock corporations register as foundations.
In turn, the tax laws provide additional benefits to two types of non-stock corporations: accredited “non-stock, non-profit corporations or organizations” (hereinafter “non-stock, non-profit corporations”), and accredited “non-governmental organizations” (NGOs).
Among other requirements, accredited non-stock, non-profit corporations must be organized exclusively for one or more of the following purposes: religious, charitable, scientific, athletic, social welfare, or cultural purposes, or the rehabilitation of veterans (Revenue Regulation No. 13-98 Section 1(a)).
Accredited NGOs must be organized and operated exclusively for one or more of the following purposes: scientific, research, educational, character-building, youth and sports development, health, social welfare, cultural, or charitable purposes (Revenue Regulation No. 13-98 Section 1(b)).
Microfinance NGOs are SEC-registered NGOs that must be organized for the primary purpose of implementing a microenterprise development strategy and providing microfinance programs, products, and services, such as microcredit and microsavings for poor and low-income clients (Microfinance NGOs Act RA 10693 Sections 3(h), 6).
Some foreign NPOs do business in the Philippines by establishing branch or representative offices, however these fall outside the scope of this Note. Other not-for-profit forms not generally discussed in this Note due to their limited interaction with foreign grantmakers include: unregistered NPOs, labor unions, trade unions, mutual savings banks, cooperatives, and entities established or governed by special laws. [1] This Note also excludes “mutual benefit associations” which, under Philippine law, are insurance companies and are explicitly precluded from assuming the character of a “charitable or benevolent organization” (RA 10607, The Insurance Code, Chapter VII Title I).
To register a non-stock, non-profit corporation, you need to have the following to start with: At least five (5) incorporators, majority of them must be residents in the Philippines; Complete address of each incorporator; BIR Tax identification number (TIN) of each incorporator;
Answers & Comments
In the Philippines, not-for-profit organizations (NPOs) are typically organized as "non-stock corporations" registered under the Corporation Code. Non-stock corporations may be formed for charitable, religious, educational, professional, cultural, fraternal, literary, scientific, social, civic service, or similar purposes, such as trade, industry, agricultural and similar chambers, or any combination thereof (Revised Corporation Code Section 87). The Securities and Exchange Commission (SEC) of the Philippines serves as the registration authority for non-stock corporations. Some non-stock corporations register as foundations.
In turn, the tax laws provide additional benefits to two types of non-stock corporations: accredited “non-stock, non-profit corporations or organizations” (hereinafter “non-stock, non-profit corporations”), and accredited “non-governmental organizations” (NGOs).
Among other requirements, accredited non-stock, non-profit corporations must be organized exclusively for one or more of the following purposes: religious, charitable, scientific, athletic, social welfare, or cultural purposes, or the rehabilitation of veterans (Revenue Regulation No. 13-98 Section 1(a)).
Accredited NGOs must be organized and operated exclusively for one or more of the following purposes: scientific, research, educational, character-building, youth and sports development, health, social welfare, cultural, or charitable purposes (Revenue Regulation No. 13-98 Section 1(b)).
Microfinance NGOs are SEC-registered NGOs that must be organized for the primary purpose of implementing a microenterprise development strategy and providing microfinance programs, products, and services, such as microcredit and microsavings for poor and low-income clients (Microfinance NGOs Act RA 10693 Sections 3(h), 6).
Some foreign NPOs do business in the Philippines by establishing branch or representative offices, however these fall outside the scope of this Note. Other not-for-profit forms not generally discussed in this Note due to their limited interaction with foreign grantmakers include: unregistered NPOs, labor unions, trade unions, mutual savings banks, cooperatives, and entities established or governed by special laws. [1] This Note also excludes “mutual benefit associations” which, under Philippine law, are insurance companies and are explicitly precluded from assuming the character of a “charitable or benevolent organization” (RA 10607, The Insurance Code, Chapter VII Title I).
To register a non-stock, non-profit corporation, you need to have the following to start with:
At least five (5) incorporators, majority of them must be residents in the Philippines;
Complete address of each incorporator;
BIR Tax identification number (TIN) of each incorporator;