SEC launches amnesty program as over 22K ‘non-compliant’ firms in danger of revocation

The Securities and Exchange Commission (SEC) has launched an amnesty program for corporations which failed to comply with the regulator’s reportorial requirements.

This, as the SEC said 22,403 ordinary corporations are in danger of having their certificates of incorporation revoked for failure to submit their general information sheets (GIS) within five years from the date of their incorporation.

The corporate regulator had also released a list of 298,335 ordinary corporations, which have failed to submit their GIS for three times consecutively or intermittently within a five-year period.

Under Section 21 of Republic Act No. 11232, or the Revised Corporation Code of the Philippines (RCC), a corporation that does not formally organize and commence its business within five years from the date of its incorporation shall have its Certificate of Incorporation be deemed revoked following the end of the five-year period.

On the other hand, Section 177 of the RCC provides that the SEC may place a corporation under delinquent status should they fail to submit their reportorial requirements three times, consecutively or intermittently, within a period of five years.

However, to give non-compliant and inactive corporations a chance to bring their company back to good standing, the SEC has launched an amnesty program.

It said that eligible corporations may avail of the amnesty by accepting the web-based Expression of Interest form on their SEC Electronic Filing and Submission Tool (eFAST) accounts, and paying the amnesty fee and petition fee, in the case of suspended and revoked corporations.

After signifying their intention to avail of amnesty, eligible corporations must submit their latest due GIS and audited financial statements (AFS) on eFAST.

Suspended and revoked corporations must also submit their petitions to lift their suspension or revocation, according to the SEC.

For suspended and revoked corporations, additional requirements such as copies of their certificates of incorporation, latest mayor’s or business permits, and certificates of registration with the Bureau of Internal Revenue must be submitted to the SEC Company Registration and Monitoring Department or to the nearest SEC Extension Office initially through email.

“Corporations applying for amnesty may proceed to the SEC Amnesty Microsite at amnesty.sec.gov.ph for the step-by-step guidance on how to avail of the program,” the corporate regulator said.

The SEC has also issued Memorandum Circular No. 19, Series of 2023, providing the Guidelines on Declaration of Delinquent Status and Revocation of Certificate of Registration of Corporations under Sections 21 and 177 of the Revised Corporation Code.

The guidelines cover corporations which have failed to formally organize and commence their business within five years from the date of their incorporation; those which have commenced operations but became inoperative for at least five consecutive years; and corporations which have failed to file their reportorial requirements three times, consecutively or intermittently, within any five-year period.

“In line with our mandate of ensuring the integrity of the corporate sector and championing good corporate governance, we will strictly enforce the reportorial requirements of corporations provided under the Revised Corporation Code and other pertinent laws, rules and regulations,” said SEC chairperson Emilio Aquino.

“Corporations are required to submit their annual financial statements, general information sheet, official contact details and other reports for good reasons. Among others, the pieces of information contained in these reports ensure transparency and accountability in a corporation’s dealings for the benefit of its stakeholders, particularly the investors, consumers and employees,” he said.—AOL, GMA Integrated News