The Securities and Exchange Commission (SEC) reminded companies that it will strictly enforce the Revised Corporation Code of the Philippines (RCC) and will duly penalize non-compliant companies.
On Oct. 18, the SEC released a list of 22,403 corporations that have failed to submit their General Information Sheet (GIS) within five years from the date of their incorporation and, as a result, their certificates of incorporation may be revoked.
This corresponds to RCC Section 177, which states that every domestic foreign corporation operating in the country must submit annual financial statements (AFS) and GIS annually to the SEC; and RCC Section 21 which revokes a company’s certification of incorporation if it fails to “formally organize and commence its business within five years from the date of its incorporation.”
The SEC released another list of 298,335 corporations who have failed to file their GIS thrice within five years, referring to RCC Section 177.
“Corporations’ timely submission of their AFS, GIS, and other reportorial requirements is vital in maintaining a healthy and vibrant corporate sector, as this helps us identify active versus inactive corporations, enhance and organize the Commission’s digital database, and protect the public from fraud,” said SEC Chairperson Emilio B. Aquino.
The enforcement of the law ensures the commission has timely and accessible corporate information.
It also serves as a tool to strengthen the SEC’s anti-money laundering/combating the financing of terrorism (AML/CFT) framework in order for the country to leave the Financial Action Task Force (FATF)’s “grey list” of “Jurisdictions under Increased Monitoring.”
Erring companies will be subject to “monetary penalties, placement under delinquency status, and suspension and revocation of certificate of incorporation, as provided under the RCC,” said the SEC.
Amnesty program
Aquino encouraged corporations to avail of the SEC Amnesty Program to avoid revoked certificates of incorporation and placement in the delinquent status.
Entities can still apply for the program until Nov. 6 and submit their requirements by Dec. 4, according to SEC Memorandum Circular No. 17, Series of 2023.
Failure to avail of the amnesty may incur higher fines and penalties. Basic penalties for the late and non-filing of reports will rise up to 1,900 percent based on the updated scales to be implemented on Nov. 7.
Corporations can get the amnesty through the online Expression of Interest form on their SEC Electronic Filing and Submission Tool (eFAST) accounts.
Non-compliant corporations must upload and submit their latest due GIS and AFS on eFAST on or before Dec. 4. Suspended and revoked corporations must submit their respective petitions to lift their suspension or revocation on eFAST, along with their latest GIS and AFS, within the same period.
Additional requirements may be asked for suspended and revoked corporations and must be submitted to the SEC Company Registration and Monitoring Department or to the nearest SEC Extension Office initially through email by Dec. 4.
Failure to submit the complete requirements results in the forfeiture of the payment of an amnesty fee paid by non-compliant corporations and the P3,060 petition fee initially collected from suspended or revoked corporations.