Delinquents face stiff penalties — SEC

Regulator Securities and Exchange Commission, or SEC, is raising by up to 2,000 percent basic penalties on corporations which fail to comply with reportorial requirements on time.

An amnesty, however, is being offered to companies to prevent them from paying the hefty charges.

SEC is set to release a new scale of fines and penalties for the late and non-filing of the General Information Sheet, or GIS and Annual Financial Statement, or AFS.

The submission of reportorial requirements is required under Republic Act 11232, or the Revised Corporation Code.

"With the stricter penalties, we hope corporations will be more mindful of submitting their annual reports on time, as these are vital in ensuring the efficient functioning of the corporate sector," SEC chairperson Emilio Aquino said.

"Faithful compliance allows the SEC to manage our corporate database better and determine which companies are active or not, in turn allowing us to purge inactive corporations and protect the public from fraudulent entities," he added.

Proposed rates

Under the proposed rates, domestic stock corporations with retained earnings of not more than P100,000 will incur a basic penalty of P5,000 for the late filing of their GIS or AFS, plus P1,000 for every month of continuing violation. This represents a 900 percent increase from the current rate of P500.

The same penalty applies to domestic non-stock corporations with a fund balance or equity of not more than P100,000, a 1,900 percent jump from the current penalty of P250.

Meanwhile, non-filing of GIS or AFS by domestic stock corporations and non-stock corporations with retained earnings and fund balance/equity, respectively, of not more than P100,000 will be slapped with a basic penalty of P10,000, plus P1,000 per month of continuing violation.

The penalty for non-compliance with MC 28 will be set at P20,000, double the current rate of P10,000.

After the amnesty program, the Commission will proceed with the full implementation of the new rates.

Amnesty deadline looms

SEC urged non-compliant and suspended or revoked corporations to take advantage of the amnesty program that runs until the end of this month.

The amnesty program, issued through SEC Memorandum Circular 2, Series of 2023, comes in the form of a reduction of fees which corporations can apply for through their Electronic Filing and Submission Tool, or eFAST, accounts.

Non-compliant corporations which avail of the amnesty will pay only P5,000 for their late or non-filed reports, regardless of the number of years they failed to comply.

On the other hand, suspended or revoked corporations will be allowed to pay only half of the actual penalties they incurred, plus a petition to lift order of revocation fee of P3,060.