Authorized Capital Stock (ACS)
Authorized Capital Stock (ACS) is the maximum amount of capital that a corporation is legally
allowed to issue to its stockholders. It is stated in the Articles of Incorporation and approved
by the Securities and Exchange Commission (SEC).
Key Points About Authorized Capital Stock:
1. Maximum Limit:
o This is the upper limit of shares the corporation can issue.
o The corporation cannot issue more shares than its authorized capital unless it
amends its Articles of Incorporation.
2. Divided into Shares:
o The ACS is divided into shares with a specific par value (e.g., ₱1 per share,
₱10 per share).
o Example: If ACS is ₱1,000,000 and each share is ₱1, then the corporation has
1,000,000 shares available to issue.
3. Subscription Requirement:
o At least 25% of the Authorized Capital Stock must be subscribed upon
incorporation.
o At least 25% of the subscribed capital must be paid up before the SEC
approves the incorporation.
o Example: If ACS is ₱1,000,000, then:
Subscribed Capital (minimum) = ₱1,000,000 × 25% = ₱250,000
Paid-up Capital (minimum) = ₱250,000 × 25% = ₱62,500
4. Not All ACS Needs to be Issued Immediately:
o A corporation does not need to issue all its authorized shares at once.
o It can keep some shares for future investors, stock options, or capital
expansion.
5. Can Be Increased or Amended:
o If the company needs more capital, it can increase its ACS by filing an
amendment with the SEC.
o Stockholders' approval is required for this change.
Registration of Business
Step 1: Subscription Requirement (25% of ACS)
At least 25% of ₱1,000,000 (₱250,000) must be subscribed by stockholders.
This means stockholders must commit to buying at least 250,000 shares in total.
Step 2: Payment Requirement (25% of Subscribed Capital Stock)
At least 25% of the subscribed capital (₱250,000) must be paid-up, which is
₱62,500.
% of Value (₱1 per
Stockholder Name Subscribed Shares 25% Paid-Up (₱)
ownership share)
- 60% 150,000 ₱150,000.00 ₱37,500.00
- 10% 25,000 ₱25,000.00 ₱6,250.00
- 10% 25,000 ₱25,000.00 ₱6,250.00
- 10% 25,000 ₱25,000.00 ₱6,250.00
- 10% 25,000 ₱25,000.00 ₱6,250.00
TOTAL 100% 250,000 ₱250,000.00 ₱62,500.00
Important Notes:
✅ Each stockholder owns at least one share.
✅ The minimum subscription of 25% of Authorizes Capital Stock (₱250,000).
✅ The minimum paid-up capital of 25% of the subscribed capital (₱62,500).
1. Primary purpose of the business
2. Secondary purpose
3. Location of Principal Office
4. Business Contact Details – (Contact number and official email)
5. Capital Structure – (Authorized and subscribed capital)
6. Company officers – Treasurer
7. Name of incorporators – (Full name, Passport, TIN, Complete address, role)
