NPM No. 077-2017


Issues Concern: Separate Personality of Sole Proprietorship and Corporation; Joint Venture



Whether both entities may form a joint venture to participate in public bidding even if the President of Super Trade Enterprise (STE) and the Chief Executive Officer of Super Trade Machinery Global Inc. (STMGI) are one and the same person.

It is settled that a sole proprietorship does not possess a juridical personality separate and distinct from the personality of the owner of the enterprise. A corporation has a separate personality distinct from its stockholders and from other corporations to which it may be connected. Thus, the doctrine on separate personality applies between a sole proprietorship and a corporation, to which the track records or the completed contracts of the sole proprietorship cannot be used by the corporation.

Since STE, a sole proprietorship, and STMGI, a corporation, have been organized as separate legal entities, it does not matter whether both business entities have the same officers because they have separate and distinct personalities for purposes of their legal existence. Thus, STE and STMGI may validly enter a joint venture agreement for purposes of competitive bidding provided that they possess all the required eligibilities under Republic Act (RA) No. 9184, the Government Procurement Reform Act, and its 2016 revised Implementing Rules and Regulations.