NextGen Day

Corporations and other regulated businesses are being given a pass by the Securities and Exchange Commission (SEC) on filing some reportorial requirements late or not at all.

The SEC Memorandum Circular No. 2, Series of 2023, also known as the Grant of Amnesty for Non-filing and Late Filing of the General Information Sheet (GIS) and Annual Financial Statement (AFS), as well as Non-Compliance with Memorandum Circular No. 28, Series of 2020, was released by the Commission on March 15. (MC 28).

The commission’s attempts to urge its regulated firms to comply with the reportorial obligations under Republic Act No. 11232, or the Revised Corporation Code, include amnesty, which will take the form of remission or reduction of fines.

The prompt filing of reportorial requirements will also enable the commission to expand and organize its database in order to foster a thriving and healthy corporate sector, as well as prudently identify active and inactive firms.

Rates of amnesty

According to the rules, the SEC will grant an amnesty on the commission’s unassessed and/or already assessed but unpaid fines and penalties for the non-filing and late filing of the GIS for the most recent and prior years as well as the non-filing and late filing of AFS, including its attachments like the certificate of existence of program/activity, non-stock, and non-profit organization forms, for the most recent and prior years.

In lieu of the customary fines and penalties the commission imposes, an overall fee of PHP5,000 will be assessed for all such offenses.

The rates will be in effect provided that the corporation or other entity complies with MC 28 and submits the most recent reportorial obligation that is due at the time of the application.

The PHP10,000 fine for breaking MC 28 will not be applied.

The assessed fines for all offenses relating to the failure to file or the late filing of GIS and AFS will be reduced by 50% for suspended and revoked corporations, including those who have requested the relief of the suspension or revocation.

Stock corporations that fail to submit their GIS or AFS are currently fined between PHP1,000 and PHP10,000 per report annually, depending on the retained earnings from their most recent AFS, in accordance with the regulations on the imposition of fines or penalties for non-compliance with reportorial requirements.

In contrast, non-stock corporations which fail to file their GIS and AFS are subject to fines ranging from PHP500 to PHP5,000.

Stock and non-stock corporations who fail to comply with the reporting requirements on time will be fined 50% of these rates.

Protected parties

The amnesty will be extended to businesses, including regional operational headquarters, branch offices, representative offices, and regional headquarters of foreign firms and institutions.

Additionally, it must include partnerships, associations, and anyone who was under the commission’s control and jurisdiction but disregarded MC 28.

However, the amnesty will not apply to corporations whose securities are listed on the Philippine Stock Exchange, those whose securities are registered but not listed on the PSE, those considered to be public companies, those involved in intra-corporate disputes, those whose Global Identification System (GIS) is in dispute, and other corporations covered by Section 17.2 of Republic Act No. 8799, or the Securities Regulation Code.

applying procedure

The properly authorized representative or resident agent of the corporation must submit an online expression of interest form (EOI) using the Electronic Filing and Submission Portal in order to be eligible for the amnesty (eFAST).

Both domestic and international firms must submit the most recent due FS or an undertaking to do so within 45 days of receiving payment confirmation, as well as the most recent due amended FS, most recent due GIS, and any revised GIS, if any, as well as documentation of MC 28 compliance.

Non-compliant firms must submit their EOI via eFAST along with documentation demonstrating their adherence to MC 28.

The petition to lift the order of suspension or revocation and the documentation of MC 28 compliance must be uploaded through eFAST and revoked and suspended corporations must submit their online EOI during this time.

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