SEC makes last-minute pitch for firms’ amnesty availment

MANILA, Philippines — The Securities and Exchange Commission (SEC) is making a last minute pitch of its amnesty program offered to corporations with pending reportorial requirements.

The SEC has reminded corporations to act quickly in order to meet the Sept. 30 deadline and take advantage of the fixed amnesty rate of P5,000 for non-compliant corporations or 50 percent of the total assessed fines for suspended or revoked corporations.

The SEC launched the amnesty program in March to give companies a reprieve from penalties that are associated with the late or non-filing of their general information sheet (GIS), annual financial statement (AFS), and non-compliance with Memorandum Circular 28, Series of 2020.

With the program, companies can now regain good standing with the SEC at a lesser cost.

Non-compliant corporations will need to pay only a P5,000 fine for failure to submit any of their annual reports, regardless of the number of years they failed to comply with the requirements, the SEC said.

On the other hand, the SEC said delinquent corporations will have to pay hefty fines once the amnesty program ends.

Once the amnesty program closes, basic penalties for the late and non-filing of required regulatory reports will increase by as high as 1,900 percent, the SEC said.

For instance, penalties for the late filing of reportorial requirements by domestic stock and non-stock corporations with retained earnings of less than P100,000 shall be at a base amount of P5,000 for the first offense, which will increase up to P9,000 for the fifth offense. An additional P1,000 per month of the continuing violation will also be added to the total fines imposed.

The SEC said corporations must maintain good standing with the Commission, so as not to lose the benefits and privileges tied to being a duly registered business.

Benefits for a corporation include being a separate juridical personality from that of its stockholders. This would allow it to enter into contracts and transactions the same way a real person would.

“Because it has a separate personality, a corporation is not affected by the death of its owners or stockholders. It can exist continuously; in fact, it can exist forever under the Revised Corporation Code of the Philippines,” the SEC also said.

The SEC said that corporations in good standing have the potential to attract more investors, as they will be able to prove their legitimacy to the investing public.

Several companies have fallen behind in submitting their annual reports, leading to many incurring hefty fines and penalties including suspension or revocation of their registration.

“Compliance with reportorial requirements mutually benefits corporations and the SEC, as this helps the Commission prudently identify active and inactive corporations, enhance and organize its digital database, and cultivate a healthy and vibrant corporate sector,” the SEC said.