A foundation is a non-stock, non-profit corporation established for the purpose of extending grants or endowments to support its goals or raising funds to accomplish charitable, religious, educational, athletic, cultural, literary, scientific, social welfare or other similar objectives (Sec. 1 of SEC Memorandum Circular No. 8 Series of 2006). Read the entire SEC Memorandum Circular No. 8-2006 here.
How to register foundations with the SEC?
The following are guidelines and requirements on the registration of foundations with the Philippine Securities and Exchange Commission (SEC).
1. Name verification slip (procedures to get name verification slip is the same with stock corporations – please visit our post about registering a corporation)
2. Articles of Incorporation and By-laws (It states that no part of the income which the association may obtain as an incident to its operation shall be distributed as dividends to its members, trustees or officers subject to the provisions of the Corporation Code on the dissolution.)
3. Affidavit of an incorporator or director undertaking to change corporate name
4. List of members, certified by the Corporate Secretary
5. List of contributors and amount contributed certified by the treasurer
Note: Items 3, 4, and 5 need not be submitted if already stated in the Articles of Incorporation. You can download a sample / blank form of Articles of Incorporation and By-laws here.
You may read our article titled “How to register a non-stock corporation in the Philippines“.
The following are additional requirements for applying for registration as stated in Section 2 of the SEC Memorandum Circular No. 8-2006.
6. Notarized Certification of Bank Deposit of the amount of not less than One Million Pesos (P1,000,000.00); and
7. Statement of willingness to allow the Commission to conduct and audit.
The applicant’s corporate name shall contain the word “Foundation” (Section 3, SEC Memorandum Circular No. 8-2006.
Foundations shall obtain endorsement from the following government agencies and form part of the registration papers, if applicable.
1. Charitable Institutions – Department of Social Welfare and Development (DSWD)
2. Education Institutions
a) Elementary to High school – Department of Education (DepEd)
b) College, Tertiary Course – Commission on Higher Education (CHED)
c) Technical Vocational Course – Technical Education Skills and Development Authority (TESDA)
3. Hospitals/ Health Maintenance Organizations – Department of Health (DOH)
To view the complete list of government agencies that may require endorsements, please read the entire list here.
Things to remember
1. The funds generated by your foundation must be utilized in accordance with the purposes stated in your Articles of Incorporation. Section 4 of SEC Memorandum Circular No.8-2006 requires all registered foundations to submit, in addition to General Information Sheet, its Audited Financial Statements which shall include a sworn Statement of its President and Treasurer on the following information that relates to the preceding fiscal year;
a. Source and Amount of Funds;
b. Program/Activity planned, ongoing and accomplished;
-Complete name, address and contact number of project officer-in-charge;
-Complete address and contact number of project office; and
c. Application of Funds
2. All funds of the Foundation shall be deposited in a banking institution regulated by the Bangko Sentral ng Pilipinas (BSP).
3. Foundations are exempt from income tax pursuant to Section 30 of the Tax Reform Act of 1997 (R.A. 8424). However, income derived from its properties, real or personal, or from any of its activities conducted for profit regardless of the disvposition made of such income, is subject to tax. The BIR shall issue a Certificate of Registration to the foundation as Qualified Donee Institution.
4. Philippine Council for NGO Certification (PCNC) is the government’s partner in the system of accrediting donee institutions. However, no foundations or NGOs shall be processed for accreditation by the PCNC unless it has secured a valid registration with the government agency (e.g. DSWD, DepEd, DOH, etc.,) that exercises regulatory function over such corporation, association or NGO (Executive Order 720). View a copy of EO 720 here.
For guidelines on registering with the Bureau of Internal Revenue (BIR) please read our article titled “How to register with the BIR”.
You may visit the websites or the offices of the following government institutions / accrediting entity for more information: