Flores Siplon FIA2019
Flores Siplon FIA2019
Flores Siplon FIA2019
Siplon, Charmila R.
JD-IV
I. Introduction
A. Sole Proprietorship
2. Cons
The con for this option is the fact that it has unlimited liability such
that creditors of the business may proceed not only against its assets and
property but after the personal own personal assets and property of the
sole proprietor.3 The wife’s creditors may also run after the assets and
property of her single proprietorship business.4 This is because the law
considers the proprietor and the business as one and the same; the latter
being a mere extension of his person.5
B. Partnership
The husband and the wife enter into a particular and limited
partnership for the specific purpose of the resort business. The wife
contributes the land while the husband contributes the other necessary
capital for the partnership through his foreign company. To consider the
partnership as a Philippine National, it is suggested that the sharing
3 Supra note 1.
4 Id.
5 Id.
Flores, Kimberly Mil T.
Siplon, Charmila R.
JD-IV
between the parties shall be 60% in favor of the wife and 40% in favor of
the husband.
1. Pros
A "partnership" is an artificial being created by operation of law
legal fiction with a separate legal personality separate from its partners.6
The greatest benefit of a partnership is organizing without being
burdened by the higher form of regulation, limitation and standards
imposed by law on corporations.7 Similarly, the partnership setup will
also meet the demands of the client stated and discussed in the previous
option. Lastly, the greater benefit of a partnership is the separate juridical
entity of the partnership. For this reason, in limited partnerships, the law
allows the limitation of the liability of certain partners to the extent of the
amount contributed to the partnership.8 The partnership cannot also be
made to answer for the personal debts of the partners.
2. Cons
The con for this type of business organization is that it requires a
more tedious process than the registration of a sole proprietorship.
Partnerships are required to be registered with the Securities and
Exchange Commission [SEC].9 Registration is made through filing the
Articles of Partnership with the SEC.10 The Articles of Partnership
contain all agreements of the partners.11 Registration requires the
following documents: [1] Proposed Articles of Partnership; [2] Name
Verification Slip; [3] Bank Certificate of Deposit; [4] Alien Certificate of
Registration, Special Investors Resident Visa or proof of other types of
visa [in case of foreigner]; [5] Proof of Inward Remittance [in case of non-
resident aliens].
C. Recommendation
12 Republic Act No. 7652, otherwise known as the Investors’ Lease Act.
13 2011, Fr. Bernas, 1987 Constitution.
Flores, Kimberly Mil T.
Siplon, Charmila R.
JD-IV
the acquisition should not be under their conjugal properties since this
would indirectly circumvent the constitutional prohibition.14
Thus, he can hold the real property where he can build his
retirement resort business through his foreign based corporation for a
long term contract of 25-50 years from his Filipina wife, who shall
exclusively buy and own the land.
There are instances where aliens are worried to let their wife solely
own the land. They sometimes opt for a long-term lease contract with
another Filipino or corporations and associations at least 60% of whose
capital is owned by Filipinos which is allowed under P.D. No 471, Fixing
a Maximum Period for the Duration of Leases or Private Lands to Aliens
and Republic Act No. 7652, otherwise known as the Investors’ Lease Act
which is also allowed.
Therefore, he has two options to structure his right to hold the
private property for the retirement resort business.
III. Response To Query # 3 As To Whose Name The Buildings And The
Improvements Be Under
The planned buildings and improvements may be owned by his
wife. This is especially true if the single proprietorship option be
followed. Since a single proprietorship does not have a distinct juridical
personality from that of the wife, there would be no need to pay transfer
taxes. The improvements, however, will be under the name of the lessee
which is the corporation. However, these improvements may stay in the
resort and therefore, be owned by the lessor-wife without paying
transfer taxes since upon the expiration of lease contract, it is simply
optional for the lessee-corporation to ask for reimbursement from the
lessor-wife for any improvements in accordance to Article 1678 of the
New Civil Code.
Further, to emphasize, it is also allowable for either of the foreign
corporation, branch, domestic corporation or foreigner’s name since the
Constitutional prohibition applies only to ownership of land. It does not
extend to all immovable or real property as defined under Article 425 of
the Civil e.g. buildings, and improvements, those which are considered