Caloocan Rep. Edgar Erice. FILE PHOTO
MANILA, Philippines—A lawmaker has cautioned the Securities and Exchange Commission (SEC) against harassing local companies for failing to renew their 50-year corporate life, an antiquated provision in the Corporation Code which Congress is in the process of abolishing.
Caloocan Rep. Edgar Erice said that the SEC should be more flexible in imposing Marcos-era rules deemed obsolete in the modern corporate world.
“We’ve received reports about the SEC going strict on this provision especially in this day and age when corporations in the world have no age limit,” said Erice.
Both the House of Representatives and the Senate have pending bills authored by Western Samar Rep. Mel Senen Sarmiento and Sen. Juan Edgardo Angara, respectively, pushing for the amendment of the Batas Pambansa Blg. 68, or the Corporation Code of the Philippines, enacted 35 years ago.
Both bills propose the grant of perpetual life for corporations and ending the 50-year limit under the Corporation Code which Sarmiento and Angara identified as stumbling blocks to doing business in the country.
The two bills also the required minimum of incorporators and allowing the registration of one-person corporations in which only a single stockholder is needed to register with the SEC.
“Corporations in general will have perpetual existence, enabling a more long-term mindset that will foster sustainability; smaller business may reap the advantages of the corporate vehicle with as few as two incorporators; and single proprietors may protect their personal properties by setting up one-person corporations,” said Angara in his explanatory note.
Aside from easing requirements on doing business in the country, the two bills are also aimed at improving corporate governance to protect shareholders and deter corporate abuses, fraud, and graft and corruption.