THE Securities and Exchange Commission (SEC) has suspended the corporate registration of 117,885 corporations for failing to submit their annual reports for over five years.
The suspension order also encompasses corporations that initiated business operations but subsequently remained inactive for over five consecutive years, according to a SEC order dated Feb. 16.
The suspended corporations have a 30-day window, starting from the publication of the order, to avail themselves of existing remedies.
The suspension order was issued almost two months after the SEC’s amnesty program ended on Dec. 31 last year.
The program, which started in March, allowed noncompliant and suspended or revoked corporations to achieve good standing by paying lower fees.
The amnesty program allowed noncompliant corporations to pay a fixed amnesty rate of P5,000, regardless of the number of reports and years they failed to submit, while suspended and revoked corporations would pay 50% of their total assessed fines, in addition to a P3,060 petition fee.
SEC-registered corporations are mandated to submit annual financial statements and general information sheets under Republic Act No. 11232, also known as the Revised Corporation Code of the Philippines (RCC).
The law also stipulates that corporations could be tagged as delinquent if they fail to submit their reportorial requirements three times, either consecutively or intermittently, within five years.
A corporation could also be placed under delinquent status if it commenced business but became inoperative for a period of at least five consecutive years.
“The commission may also suspend, after due notice and hearing, the franchise or certificate of incorporation of corporations, in accordance with Presidential Decree 902-A, Republic Act No. 8799, or the Securities Regulation Code, and Section 179 of the RCC,” the SEC said.
Previously, the SEC issued Memorandum Circular No. 19, which contained guidelines for purging corporations under delinquent status as it strictly enforces the reportorial requirements of corporations. — Revin Mikhael D. Ochave
