December 14, 2024 | 12:00am
MANILA, Philippines — Over 11,600 corporations are in danger of being suspended by the Securities and Exchange Commission (SEC) due to failure to comply with reportorial requirements.
There are a total of 11,677 corporations that have failed to submit their annual financial statements (AFS) and general information sheets (GIS) for eight years, or from 2015 to 2022, based on SEC records as of end-October.
The SEC said these firms are under evaluation for the possible suspension of their certificates of incorporation.
The commission explained that every corporation, domestic or foreign, doing business in the Philippines is required to submit AFS and GIS, among other reportorial requirements, annually and within such period as may be prescribed by the SEC under the Revised Corporation Code of the Philippines (RCC).
The SEC has been granted power to suspend or revoke, after proper notice and hearing, the franchise or certificate of registration of corporations upon any of the grounds provided by law.
The commission said that one of the grounds for the suspension or revocation of the certificate of incorporation or registration of a corporation is failure to comply with the reportorial requirements, as provided under Section 177 of the RCC.
To avoid having their certificates of incorporation suspended, the SEC is urging the 11,677 corporations to avail themselves of the Enhanced Compliance Incentive Plan (ECIP) before the year ends.
Deadline for ECIP applications was originally set on Nov. 30, but it has been extended by the SEC until the end of the year.
The extension was given to provide corporations more time to settle the fees they have accumulated for the late and non-filing of their reportorial requirements over the years.
Through the ECIP, eligible corporations are given a chance to regain their good standing and pay penalties at significantly lower rates.
At the end of ECIP, the SEC said that non-compliant and suspended or revoked corporations would be subject to the updated scale of fines and penalties that the commission implemented last April through Memorandum Circular 6 Series of 2024.
The new rates are around 900 to 1,900 percent higher compared to the previous rates that had been in place for more than two decades.
The SEC said that the list of corporations with suspended certificates of incorporation would be finalized after ECIP ends.
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