Latest Stories

Corporation Code overhaul pushed

Regulator wants rules modernized


The Securities and Exchange Commission is seeking a comprehensive reform of the basic law governing Philippine corporations to embrace modern global practices like giving a perpetual corporate term and allowing a single person to set up a corporation.

Completing a draft of proposed amendments after a review that started as soon as she assumed office in 2011, SEC chair Teresita Herbosa said in a press briefing on Friday that the proposed amendments would be “in keeping with the times.” The blueprint seeks to upgrade the antiquated Corporation Code of the Philippines, which was last amended in 1980, by drawing from practices in the US and across Southeast Asia.

Allowing a “perpetual” term for corporations in lieu of the current 50-year maximum term is one of the highlights of the proposal. Herbosa said this perpetual term was now a common worldwide practice, adding this would give corporations more flexibility in fund-raising. The corporations, however, will still be subject to reportorial requirements and periodically prove to the SEC that they still exist.

The SEC recognizes that some corporations, even those in good standing, forget to renew their term at the end of 50 years, especially when the original incorporations have passed away. “It’s a big mess. It’s not worth the trouble,” Herbosa said.

The proposed blueprint also seeks to allow less than five persons or even a single person to form a corporation. The current corporation code requires no less than five but no more than 15 persons to incorporate and organize a private corporation.

The SEC seeks to introduces a new provision governing a one-person corporation which will be part of a new category called “special corporations.” “It’s a very modern concept but it’s all over the world, ” Herbosa said. She explained that this would be different from a single proprietorship because the liability would be limited to the capital put in by the single incorporator. “In single proprietorship, all your money is out there. You can become liable,” she said.

But while the SEC is keen on allowing a one-person corporation, each person can only incorporate one such corporation at a time as there will be a prohibition against multiple one-person corporations.

“For example, if you want to sell cupcakes and invested P500,000 [in a one-person corporation] and then it went bankrupt, you can close that and set up another,” Herbosa said.

The proposed amendments also seek to strengthen penalty provisions, such as boosting the SEC’s capability to issue cease and desist orders. Stiffer penalties will be introduced, for instance, against willful certification of incomplete, inaccurate, false or misleading statements or reports; independent auditor collusion; organizing a corporation through fraud; fraudulent or unlawful conduct of business; theft of identity; acting as or engaging intermediaries for graft and corrupt practices; tolerating graft and corrupt practices and retaliation against whistleblowers.

Herbosa said the penalties under the corporation code would be aligned with the country’s Securities Regulation Code.

Follow Us

Follow us on Facebook Follow on Twitter Follow on Twitter

Recent Stories:

Complete stories on our Digital Edition newsstand for tablets, netbooks and mobile phones; 14-issue free trial. About to step out? Get breaking alerts on your mobile.phone. Text ON INQ BREAKING to 4467, for Globe, Smart and Sun subscribers in the Philippines.

Tags: Business , economy , money , News , Securities and Exchange Commission

  • joboni96

    mga collaborators sa sec
    at work again for their foreign masters

    gustong paliin pagpasok ng mga dayuhan
    para mas ma control pa pilipino economy

Copyright © 2014, .
To subscribe to the Philippine Daily Inquirer newspaper in the Philippines, call +63 2 896-6000 for Metro Manila and Metro Cebu or email your subscription request here.
Factual errors? Contact the Philippine Daily Inquirer's day desk. Believe this article violates journalistic ethics? Contact the Inquirer's Reader's Advocate. Or write The Readers' Advocate:
c/o Philippine Daily Inquirer Chino Roces Avenue corner Yague and Mascardo Streets, Makati City, Metro Manila, Philippines Or fax nos. +63 2 8974793 to 94


  • Drunk passenger triggers Bali hijack alert
  • Businesswoman allegedly killed by husband, brother-in-law
  • Roxas suspended from golf club for outburst over P5,000 guest fee
  • SC reschedules oath-taking of new lawyers
  • Ex-COA chief seeks bail after arrest for plunder
  • Sports

  • Guiao fined P100,000 for ‘mongoloid’ comment vs Meralco forward
  • Hawks and Grizzlies revel in home wins
  • Floyd: Manny’s power gone
  • Michael Phelps loses to Lochte in comeback meet
  • Sharapova advances to Stuttgart quarterfinals
  • Lifestyle

  • ‘Recovered’ Banksy works on display ahead of sale
  • Marinduque: Visiting the ‘palm of the ocean’
  • First at Vatican in 60 years
  • How Jing Monis Salon gave Krissy the pixie
  • Want to be a supermodel? Work on your inner beauty, says Joey Espino
  • Entertainment

  • Paul McCartney to play at Candlestick concert
  • Kristoffer Martin: from thug to gay teen
  • Has Ai Ai fallen deeply with ‘sireno?’
  • California court won’t review Jackson doctor case
  • Cris Villonco on play adapted from different medium
  • Business

  • PAL hailed for ban on shark fin cargo
  • BSP to change tint of P100 bill
  • Nielsen sees car buying boom in the Philippines
  • How author of best-seller exposed ‘one percent’ economic elite
  • Bangko Sentral readies new bank lending rules
  • Technology

  • Cloud strength helps Microsoft earnings top Street
  • Vatican announces hashtag for April 27 canonizations
  • Enrile in Masters of the Universe, Lord of the Rings?
  • Top Traits of Digital Marketers
  • No truth to viral no-visa ‘chronicles’
  • Opinion

  • Corruption not invincible after all
  • Editorial Cartoon, April 25, 2014
  • No deal, Janet
  • Like making Al Capone a witness vs his gang
  • MERS-CoV and mothers
  • Global Nation

  • Plane lands at Bali airport in suspected hijacking—Indonesia air force
  • Obama lands in Seoul as N. Korea nuclear test fears grow
  • Militant protests vs Obama, US set
  • Filipinos second-shortest in Southeast Asia
  • China welcomes PH apology
  • Marketplace