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SEC Philippines to Businesses and Organizations: Apply for Amnesty to Avoid Higher Penalties8/22/2023 The Securities and Exchange Commission (SEC) implored corporations and associations that have incurred penalties due to the late or non-filing of their annual reports to avail of the amnesty program before higher penalties kick in starting October 1. The Commission last March 15 issued SEC Memorandum Circular No. 2, Series of 2023, or the Grant of Amnesty for Non-filing and Late Filing of the General Information Sheet (GIS) and Annual Financial Statements (AFS), and Non-Compliance with Memorandum Circular No. 28, Series of 2020 (MC 28).
The amnesty, which comes in the form of a waiver or reduction of fess, is part of the Commission’s efforts to encourage its regulated entities to comply with their reportorial requirements under Republic Act No. 11232, or the Revised Corporation Code. Around 40,000 corporations have since completed their amnesty application with the SEC, allowing them to reclaim their good standing or corporate registration with the SEC. “The SEC Amnesty Program is a chance for corporations and associations to get a fresh start in their compliance with reportorial requirements, so they continue to enjoy the benefits and privileges of being a registered corporation,” SEC Chairperson Emilio B. Aquino said. “We reiterate our reminder to all corporations that starting a business does not end with registration with the SEC. This is just the first step—they must faithfully comply with reportorial requirements thereafter to ensure their continuity and sustainability,” he added. On June 30, the SEC streamlined the amnesty application process in order to encourage more corporations to avail of the program. Corporations now need only answer a web-based form available on their Electronic Filing and Submission Tool (eFAST) accounts, replacing the submission of notarized Expression of Interest Form and Amnesty Application Form. Likewise, corporations no longer need to file an undertaking to submit the latest due AFS within 90 days from amnesty application. Corporations that are able to submit their correct reportorial requirements, including those reverted for compliance, within the submission period or until the deadline will be considered to have undergone the complete amnesty process and are entitled to receive a Confirmation of Payment. Otherwise, payment of amnesty fees will be forfeited in favor of the SEC. The deadline for all amnesty applications is on September 30, as provided under SEC Memorandum Circular No. 9, Series of 2023. The SEC is currently preparing guidelines for the new set of fines and penalties for the late and non-filing of reportorial requirements that will be imposed starting October 1. Under the proposed guidelines, the late filing of reportorial requirements by domestic stock and non-stock corporations with retained earnings of less than P100,000 will incur fines at a base amount of P5,000 for the first offence, which will increase to P9,000 for the fifth offense. There will also be a P1,000 monthly fine for every month of the continuing violation. Non-filing of reportorial requirements by both stock and non-stock corporations with retained earnings of less than P100,000 will incur fines amounting to P10,000 for the first offense up to P18,000 for the fifth offense, plus a fine of P1,000 for every month of the continuing violation. Currently, stock corporations with retained earnings of up to P100,000 are fined P1,000 per year, while non-stock corporations are fined P500 for non-filing of reports. Fines for late filing are equivalent to 50% of the aforementioned rate. If non-compliant, suspended, and revoked corporations will not avail of the amnesty, they will be subject to an estimated 90% increase in the payment of fines and penalties for late and non-submission of reportorial requirements starting October 1. In addition to the increased fines and penalties for late and non-submission of reportorial requirements, the SEC will also start strictly imposing fines on non-compliance with MC 28. Starting October 1, the fine will be equivalent to P20,000, representing a hundred percent increase from the current penalty. Aside from monetary fines, the SEC may declare a corporation under delinquent status after it has failed to submit its reportorial requirements for three times, consecutively or intermittently within five years. The Commission can also revoke a corporation’s registration should it incur a fourth offence and it has been given reasonable notice regarding its delinquent status. The draft memorandum circular on the Revised Fines and Penalties on Reportorial Requirements may be accessed through the SEC website: https://www.sec.gov.ph/notices/request-for-comments-on-the-proposed-revised-fines-and-penalties-on-reportorial-requirements/#gsc.tab=0
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