More than 100,000 businesses have been temporarily halted from operating

In the Philippines, the Securities and Exchange Commission (SEC) has taken action against a significant number of corporations for failing to fulfill their reportorial obligations. Specifically, the SEC has suspended the certificates of incorporation of 117,885 companies due to their non-compliance with filing requirements for more than five years. This move comes as a response to the prolonged inactivity and failure of these corporations to submit necessary reports within the designated timeframe.

Affected corporations have been given a 30-day window, starting from the date of the SEC’s order publication, to utilize the available remedies as outlined by existing laws and regulations overseen by the commission. According to provisions within the Revised Corporation Code, corporations that have begun operations but subsequently ceased activity for a consecutive period of at least five years may be placed under delinquent status following appropriate notice and hearings.

The SEC mandates that corporations adhere to filing their reportorial requirements, and failure to do so for three periods, whether consecutively or intermittently within five years, may result in delinquent status. To encourage compliance, the SEC introduced an amnesty program in March of the previous year. This initiative aimed to facilitate adherence to reporting obligations by allowing non-compliant, suspended, or revoked corporations to settle their late or non-filing penalties at a reduced rate.

Participation in the amnesty program permits non-compliant corporations to pay a fixed rate of P5,000, regardless of the number of reports or years they have failed to submit. Meanwhile, suspended or revoked corporations are subject to paying only 50 percent of their total assessed fines, along with a petition fee of P3,060.

Previously, corporations were given until December 31, 2023, to take advantage of the amnesty program, emphasizing the SEC’s commitment to enhancing compliance with regulatory requirements within the corporate sector.

Business News: More than 100,000 businesses have been temporarily halted from operating