2017-12-20

NPM No. 040-2017

Requesting Entity: National Food Authority (NFA) National Capital Region

Issues Concern: Change of Ownership of a Sole Proprietorship

 

Details

Whether or not a prospective bidder, a sole proprietor, whose registered name was changed and the owner named is not the original owner, is qualified to bid.


[A] sole proprietorship does not possess any juridical personality separate and distinct from the personality of the owner of the enterprise and the personality of the persons acting in the name of such proprietorship.3


Accordingly, a subsequent change in the business name of the sole proprietorship will not change its status as such, and the fact that it does not have a separate personality from its owner. However, if it is the ownership of the sole proprietorship that changed, there is effectively a “new” sole proprietorship, following the principle that a sole proprietorship has no separate and distinct personality from its owner.


Whether or not a change in company name and the owner thereof may be considered a “new” company thus disqualifying it from joining the bidding.


[I]t is our considered view that a newly registered sole proprietorship may use the experience of another sole proprietorship owned by the same individual. Conversely, if the ownership of the sole proprietorship has changed, a new enterprise is established, thus the experience of the original sole proprietorship, owned by an individual, will not extend to the new enterprise that is owned by another individual.