Sole Proprietorship/Ownership
Also known as sole ownership, a sole proprietorship is a business owned by only one person and pays income taxes based on the profits that the business incurs. Common examples of this type of ownership include consultants, freelancers, individual contractors or small business owners. This type of business is registered with the DTI (Department of Trade and Industry).
Partnership
A partnership business consists of at least two individual owners. Both the duties and the revenues are divided between the partners. Partnerships usually require fewer legal requirements and tax responsibilities than a corporation. This type of business is registered with the SEC (Securities and Exchange Commission).
Philippines Domestic Corporation
A regular domestic corporation has a separate juridical character from its stockholders and other corporations it is associated with. A domestic corporation is similar to a Limited Liability Company (LLC) or a Private Limited Company (PLC) in terms of the powers and aspects given to a domestic corporation by the Corporation Code of the Philippines. Just like LLCs, a domestic corporation obtains its own liabilities and is responsible for paying its obligations legally. Similarly, the stockholders of a domestic corporation may only be held liable for their corresponding share capital.
One Person Corporation (OPC)
One person corporations are also a domestic corporation, but not a regular corporation because it features only one stockholder that could either be a natural person, trust, or estate. An interesting difference between a One Person Corporation from a Regular Domestic Corporation is that it only requires one stockholder who is considered the director and president of the company, unlike in a Regular Corporation where there is a need for two or more incorporators and directors, but not exceeding 15, and corporate officers (Corporate Secretary, Treasurer, and President). Another notable business entity differentiation between sole ownership and OPC is that there are higher risks involved for sole ownership, as creditors can take the sole owner’s personal assets when the business incurs debts. Meanwhile, for One Person Corporation, the corporation’s assets are separated from the owner’s assets so creditors may only go after the company’s assets. Furthermore, a One Person Company is regulated by the SEC, while a Sole Proprietorship Corporation falls under the jurisdiction of the DTI.