The Securities and Exchange Commission (SEC) has again extended the deadline for non-compliant, delinquent, suspended, and revoked corporations to take advantage of lower fines and penalties for the late and non-filing of their reportorial requirements.
The Commission issued SEC Memorandum Circular (MC) No. 17, Series of 2024, on Nov. 28, extending the Enhanced Compliance Incentive Plan (ECIP) application period until December 31, 2024.
ECIP allows non-compliant and delinquent, as well as suspended or revoked corporations, a chance to settle their fines and penalties for failure to submit their annual financial statements (AFS), general information sheet (GIS), and official contact details at significantly lower rates.
To apply for ECIP, corporations must submit an Expression of Interest through their accounts on the Electronic Filing and Submission Tool (eFAST).
Applicant corporations must submit their latest due AFS and GIS by December 31, 2024.
Non-compliant and delinquent corporations may settle their fines and penalties for P20,000.
Corporations with suspended or revoked registrations need to pay only 50 percent of their assessed fines and penalties, plus P3,060 to process their petition to lift the order of suspension or revocation.
In addition to the AFS and GIS, corporations with suspended or revoked Certificates of Incorporation must submit a Petition to Lift Order of Suspension or Revocation, along with supporting documents such as a Directors’ or Trustees’ Certificate, proof of ongoing operations, Secretary’s Certificate of No Intra-Corporate Controversy, and MC 28 compliance, among others.
These documents should be submitted to the designated SEC email addresses. Corporations based outside of Metro Manila must submit the requirements to the concerned SEC Extension Office.
As of November 28, more than 3,200 corporations have applied and paid the corresponding ECIP fees. Companies that have yet to complete their applications by submitting their latest AFS and GIS, Petition to Lift Order (PLO), and supporting documentary requirements, as the case may be, are also given until December 31 for the issuance of Confirmation of Payment for ECIP.
Failure to submit the complete set of requirements by December 31, 2024, will result in the forfeiture of the ECIP fee. This includes the P20,000 fee for non-compliant corporations and 50 percent of the total assessed penalties, as well as the initial petition fee of P3,060 for suspended/revoked corporations. These fees will be forfeited in favor of the Commission.
At the end of ECIP, non-compliant and suspended/revoked corporations will be subject to the updated scale of fines and penalties that the SEC implemented in April through Memorandum Circular No. 6, Series of 2024.
The new rates are approximately 900 percent to 1,900 percent higher than the previous rates, which had been in place for more than two decades.
"Eligible corporations are encouraged to apply for ECIP to avoid getting their corporate registration revoked, pursuant to Republic Act No. 11232, or the Revised Corporation Code (RCC)," the SEC said.
Under the RCC, the SEC may place a corporation under delinquent status for failure to submit reportorial requirements three times, consecutively or intermittently, within five years.
Corporations placed under delinquent status have two years to resume operations; otherwise, their registration will be revoked.