11,000+ companies facing serious SEC sanctions
A significant number of companies in the Philippines might face suspension due to failures in submitting their annual financial statements, warns the Securities and Exchange Commission (SEC). Over 11,600 firms have not met their reporting obligations over the past eight years, surpassing the grace period typically granted for such lapses.
If these 11,677 “delinquent” companies do not act promptly, the SEC may revoke their certificate of incorporation or registration, preventing them from conducting business activities. To avoid this, the SEC urges these companies to consider its Enhanced Compliance Incentive Plan (ECIP), which offers reduced fees until December 31.
Through the ECIP, noncompliant companies and those labeled as “delinquent” may settle their penalties for as little as P20,000, significantly less than the potential penalties and monthly fees outlined in the SEC’s fee schedule.
Suspended or revoked companies, even those with petitions in progress to reverse their status, can mitigate their fines and penalties by paying a fee of P3,060 and only half of the monetary obligations imposed on them.
To maintain a good standing, these companies must fulfill their outstanding requirements by the year’s end. Failure to do so would result in the forfeiture of their ECIP fees. As of November, around 3,200 entities have already applied for and paid the ECIP fees.
Apart from financial consequences, noncompliant companies risk facing higher penalties once the ECIP window closes in January. Earlier this year, the SEC updated its fee structure by up to 1,900 percent, marking the first adjustment in over two decades.
For instance, a business with retained earnings below P100,000 that misses filing its financial statements must now pay P10,000 per report, with an additional P1,000 fee for each month of delay. This is a significant increase from the previous charge of just P1,000 per report, without any additional monthly fees.
