SEC warns 11,600 corporations of possible suspension
The Securities and Exchange Commission (SEC) is reaching out to more than 11,600 corporations, urging them to take advantage of the Enhanced Compliance Incentive Plan (ECIP) before facing potential suspension of their corporate registration for failing to meet reportorial requirements.
According to a notice released on December 13, the SEC has identified 11,677 corporations that are at risk of having their certificates of incorporation suspended due to their lapse in submitting annual financial statements (AFS) and general information sheets (GIS) for the past eight years, from 2015 to 2022.
The Revised Corporation Code of the Philippines (RCC) mandates all registered corporations to annually submit their AFS and GIS to the SEC, alongside other required reports within specified timeframes.
If a corporation fails to meet reporting requirements three times within a five-year period, it may be classified as “delinquent” under the RCC. Delinquent corporations are given a two-year window to rectify their non-compliance, or else risk having their registration revoked.
To address this situation, the SEC is promoting the ECIP, which offers an opportunity for non-compliant and delinquent corporations, as well as those with suspended or revoked certificates of incorporation, to settle penalties at reduced rates.
Originally slated for November 30, the deadline for ECIP applications has been extended until December 31.
Through ECIP, non-compliant and delinquent corporations can resolve their fines and penalties by paying a flat fee of P20,000. Suspended or revoked corporations are required to pay 50 percent of their assessed fines and penalties, in addition to a P3,060 petition fee to lift the suspension or revocation order.
Eligible corporations must express their interest in applying for ECIP using their company accounts on the Electronic Filing and Submission Tool (eFAST). They must submit their most recent AFS and GIS by December 31, 2024, to finalize their ECIP application. Suspended or revoked corporations must also present additional documentation to the SEC extension offices via designated email addresses.
In addition to the risk of suspension, corporations on the list may also face increased fines and penalties under the updated scale that came into effect in April, as outlined in SEC MC No. 6, Series of 2024. These rates are substantially higher – around 900 percent to 1,900 percent – than the previous rates in place for the past 20 years.
For a complete list of corporations at risk of suspension due to non-submission of annual reports from 2015 to 2022, please refer to the SEC website link: bit.ly/NoticeListofCorporations.