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Manila Bulletin devider Business devider SEC warns over 11,600 corporations of possible suspension

SEC warns over 11,600 corporations of possible suspension

Published Dec 15, 2024 09:24 pm

The Securities and Exchange Commission (SEC) is calling on over 11,600 corporations to avail themselves of its Enhanced Compliance Incentive Plan (ECIP) or face the suspension of their corporate registration for non-compliance with reportorial requirements.

In a notice dated Dec. 13, the SEC released a list of 11,677 corporations being evaluated for possible suspension of their certificates of incorporation due to failure to submit their annual financial statements (AFS) and general information sheets (GIS) for the past eight reporting years, from 2015 to 2022.

Section 117 of the Revised Corporation Code of the Philippines (RCC) requires all registered corporations to submit their AFS and GIS annually to the SEC, along with other reports within periods prescribed by the Commission.

Under the RCC, the SEC may classify a corporation as "delinquent" if it fails to submit reportorial requirements three times, consecutively or intermittently, within a five-year period. Delinquent corporations have two years to resume operations; otherwise, their registration will be revoked.

Therefore, the SEC encourages corporations facing suspension to apply for ECIP, which allows non-compliant and delinquent corporations, as well as those with suspended or revoked certificates of incorporation, to settle penalties for non-compliance with reportorial requirements at significantly lower rates.

The deadline for ECIP applications was initially set for November 30. However, the SEC extended the incentive program until December 31.

Under ECIP, non-compliant and delinquent corporations will only have to pay P20,000 to settle their fines and penalties.

Meanwhile, suspended or revoked corporations will only pay 50 percent of their assessed fines and penalties, plus a P3,060 petition fee to lift the order of suspension or revocation.

To apply for ECIP, eligible corporations must submit their Expression of Interest using their company accounts on the Electronic Filing and Submission Tool (eFAST).

They must also submit their latest due AFS and GIS before December 31, 2024, to complete their ECIP application. Suspended/revoked corporations must also submit other supporting documents to the designated email addresses of SEC extension offices covering their jurisdiction.

Aside from the possible suspension of their certificates of incorporation, corporations on the list will be subject to the updated scale of fines and penalties that took effect in April.

The Commission issued SEC MC No. 6, Series of 2024, providing for the new rates, which are approximately 900 percent to 1,900 percent higher than the rates in effect for the past two decades.

The list of corporations at risk of suspension for failure to submit their annual reports from 2015 to 2022 is available on the SEC website at this link: bit.ly/NoticeListofCorporations
 

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