SEC to slap higher penalties on companies for delinquent reports

MANILA, Philippines — The Securities and Exchange Commission (SEC) will jack up the penalties for delinquent reportorial compliance by as high as 1,900 percent.

The corporate regulator has ordered companies to comply with their reportorial requirements on time. Otherwise, they will be slapped with higher penalties for late and non-filing of the General Information Sheet (GIS) and Annual Financial Statement (AFS).

The submission of reportorial requirements is required under Republic Act 11232 or the Revised Corporation Code.

SEC chairperson Emilio Aquino said that with stricter penalties, the commission hopes that corporations would submit their annual reports on time to help ensure an efficiently functioning Philippine corporate sector.

“Faithful compliance allows the SEC to manage our corporate database better and determine which companies are active or not, in turn allowing us to purge inactive corporations and protect the public from fraudulent entities,” he said.

Under the proposed rates, smaller companies or those with retained earnings of not more than P100,000 will incur a basic penalty of P5,000 – from P500 previously – for the late filing of their reportorial requirements, plus P1,000 for every month of continuing violation.

The same penalty applies to domestic non-stock corporations with a fund balance or equity of not more than P100,000, a 1,900 percent jump from the current penalty of P250.

Non-filing of GIS or AFS by domestic stock corporations and non-stock corporations with retained earnings and fund balance/equity, respectively, of not more than P100,000 will be slapped with a basic penalty of P10,000, plus P1,000 per month of continuing violation.

Delinquent corporations, however, may still avail of the SEC’s amnesty program until Sept. 30. After the deadline, the SEC will impose the higher penalties.

The amnesty program, issued through SEC Memorandum Circular 2, comes in the form of a reduction of fees which corporations can apply for through their electronic filing and submission tool (eFAST) accounts.

Non-compliant corporations that avail of the amnesty will pay only P5,000 for their late or non-filed reports, regardless of the number of years they failed to comply.

On the other hand, suspended or revoked corporations will be allowed to pay only half of the actual penalties they incurred, plus a petition to lift the order of revocation fee of P3,060, according to the SEC.

“Non-compliant domestic stock corporations with retained earnings of not more than P100,000 stand to save at least P25,000 should they avail of the amnesty. This is based on the fees for the late filing of GIS and AFS, as well as non-compliance with MC 28, equivalent to P30,000, versus the P5,000 amnesty,” the SEC said.