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SEC renews call for erring firms to seek amnesty

THE SECURITIES and Exchange Commission (SEC) reminded corporations and associations to avail of its amnesty program until Sept. 30 to avoid higher fees and penalties.   

“With fees and penalties increasing on October 1, the SEC strongly encourages companies to regain their good standing with the commission and take advantage of the lower fines offered by the program,” the corporate regulator said in a statement on Wednesday. 

Noncompliant corporations are only required to pay P5,000 for failure to submit their general information sheet (GIS), annual financial statement (AFS), or Memorandum Circular (MC) No. 28 report, regardless of the number of years of non-submission, under SEC MC No. 2 issued on March 15 that launched the amnesty program.

Suspended or revoked corporations only need to pay half of their total fines and penalties, plus the petition to lift the order of suspension/revocation fee of P3,060, subject to the submission of additional documents. 

The SEC previously extended the amnesty program to Sept. 30 from the initial deadline of June 30.   

“The SEC amnesty program is a chance for corporations and associations to get a fresh start in their compliance with reportorial requirements, so they continue to enjoy the benefits and privileges of being a registered corporation,” SEC Chairperson Emilio B. Aquino said. 

“Since the amnesty program’s launch in March, we have made it our mission to encourage as many companies as we can to avail, since we know this is a huge financial relief for our registered corporations,” he added.

According to the SEC, the amnesty program prods more companies to comply with the law, maintain the integrity of the capital market, as well as update the commission’s database for the benefit of the investing public.

“Registration with the SEC marks the first step toward legitimately setting up a corporation in the Philippines. This entails certain duties and responsibilities in order to maintain a good standing with the commission, including compliance with reportorial requirements provided under Republic Act No. 11232, or the Revised Corporation Code of the Philippines,” the SEC said. 

“The amnesty program is also an opportunity for companies to regain their good standing, return to their normal operations, and gain the trust of potential investors,” it added.

On June 30, the SEC fast-tracked the amnesty process as companies only need to answer a web-based form on the electronic filing and submission tool (eFAST) account.

Meanwhile, the SEC said the amnesty program also serves as a buffer as the commission finalizes the guidelines that will impose higher penalties for noncompliance with reportorial requirements.

The proposed fines and penalties are about 90% higher than the existing scale.

Based on proposed guidelines, the late filing of reportorial requirements by domestic stock and nonstock corporations with retained earnings of less than P100,000 will be fined a base amount of P5,000 for the first offense. The fine could increase up to P9,000 for the fifth offense. A P1,000 monthly fine will also be imposed for every month of the continuing violation.

The draft guidelines also provide that the non-filing of reportorial requirements by both stock and nonstock corporations with retained earnings of less than P100,000 will face fines worth P10,000 for the first offense up to P18,000 for the fifth offense, as well as an additional monthly fine of P1,000 per month of the continuing violation.

“Moreover, should a company fail to submit its reportorial requirements for three consecutive times or intermittently within five years, the SEC may declare said company under delinquent status,” the regulator said.

If a company has incurred a fourth offense, the commission may also revoke its registration “given that the company is sent a reasonable notice regarding its delinquent status prior to the revocation,” it added. — Revin Mikhael D. Ochave

Neil Banzuelo

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