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A Charter Agreement sets out the fundamental rules and structure for how an organization will operate in the Philippines. It's essentially a binding contract that establishes key details like the company's name, purpose, capital structure, and governance framework - similar to what many call Articles of Incorporation.

Under Philippine Corporation Code, this vital document must be filed with the Securities and Exchange Commission (SEC) when forming a corporation. It spells out shareholder rights, board powers, and business activities while meeting specific local regulatory requirements. Business owners often work with legal counsel to craft these agreements since they serve as their organization's constitutional foundation.

Organizations need a Charter Agreement when starting a new corporation in the Philippines or transforming an existing business into a corporate structure. This crucial document becomes essential during major corporate milestones like expanding operations, adding new shareholders, or changing the company's core business activities.

The timing typically aligns with SEC registration requirements and becomes urgent when seeking business permits, opening corporate bank accounts, or entering significant contracts. Many Filipino entrepreneurs prepare their Charter Agreement during initial business planning, as it helps secure early-stage funding and establishes clear operational guidelines before launching activities.

• Basic Corporation Charter Agreement: Covers standard incorporation needs with fundamental governance structures and capital requirements for typical Filipino businesses
• Specialized Industry Charter: Contains additional provisions for regulated sectors like banking, insurance, or telecommunications, meeting specific SEC and industry requirements
• Professional Corporation Charter: Tailored for licensed professionals like doctors, lawyers, or architects, with specific ownership and practice restrictions
• Non-Profit Charter Agreement: Designed for non-stock, non-profit organizations with unique provisions for charitable purposes and tax-exempt status
• Close Corporation Charter: Modified for family-owned or closely-held businesses with restricted share transfers and simplified governance structures

• Founding Shareholders: Sign and approve the Charter Agreement as primary stakeholders, defining their ownership rights and investment commitments
• Corporate Officers: Execute and implement the charter's provisions while managing day-to-day operations under its framework
• Board of Directors: Oversee compliance with the charter and make key decisions within its established boundaries
• Corporate Secretary: Maintains and certifies the Charter Agreement, ensuring proper filing with the SEC
• Legal Counsel: Drafts and reviews the agreement to ensure compliance with Philippine Corporation Code and SEC regulations

• Basic Details: Gather proposed corporate name, principal office address, and specific business purposes
• Capital Structure: Determine authorized capital stock, par value, and initial subscription commitments
• Ownership Profile: List all incorporators with their citizenship, addresses, and shareholding percentages
• Governance Framework: Define board composition, officer positions, and voting requirements
• Compliance Check: Verify industry-specific requirements and foreign ownership restrictions under Philippine law
• Document Generation: Use our platform to create a legally-sound Charter Agreement that includes all mandatory elements

• Corporate Identity: Full corporate name, principal office address, and specific business purposes as required by SEC
• Capital Structure: Authorized capital stock amount, share classes, par values, and subscription requirements
• Shareholder Details: Names, nationalities, and addresses of all incorporators with their shareholdings
• Board Composition: Number of directors, qualifications, terms of office, and meeting procedures
• Corporate Officers: Required positions, duties, powers, and appointment process
• Dissolution Terms: Procedures for corporate dissolution and asset distribution
• Amendment Process: Methods and requirements for modifying the charter agreement

A Charter Agreement differs significantly from a Business Acquisition Agreement in the Philippine legal landscape. While both are foundational business documents, they serve distinct purposes and come into play at different stages of corporate life.

• Primary Purpose: Charter Agreements establish a corporation's existence and fundamental structure, while a Business Acquisition Agreement governs the purchase and sale of an existing business
• Timing of Use: Charter Agreements are created at company formation and filed with the SEC, whereas Business Acquisition Agreements come into play during mergers, acquisitions, or business transfers
• Legal Requirements: Charter Agreements must follow strict SEC guidelines and Philippine Corporation Code requirements, while Business Acquisition Agreements offer more flexibility in terms and conditions
• Duration: Charter Agreements remain active throughout a corporation's existence, while Business Acquisition Agreements typically conclude once the transaction is complete