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Senate OKs bill relaxing rules in establishing corporations in PH

/ 04:50 PM August 07, 2018

The Senate has approved on final reading a bill that would amend the country’s Corporation Code of 1980 to attract both large and small businesses.

Senate Bill No. 1280 was approved with 20 affirmative votes, zero negative votes, and no abstention, according to a statement from the Senate on Tuesday.

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“A reform in our corporate sector will certainly make the country more investment-attractive and, therefore, investments can generate jobs that can help our country and our people,” said Drilon, one of the authors and sponsors of the bill.

Drilon lamented the “many complexities” in the business sector, citing the World Bank 2017 survey where the Philippines ranked 171st in countries where starting a business is easiest.

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Under the bill, the “one person corporation” concept would permit a single person to form a corporation.

“We must provide an environment conducive not just to big businesses, but make the corporate vehicle an appealing prospect for startups and entrepreneurs,” the senator said.

Drilon also explained the bill would amend the existing requirement of at least five stockholders for a corporation, which mostly becomes a “stumbling block.”

The bill would also grant a perpetual term as the default option for corporations, the statement read.

An electronic filing system will also simplify the “confusing” name verification system for corporations, while alternative or remote modes of communication in corporate meetings will be allowed.

“If we are to keep up with the rest of the financial world, we need to codify best international corporate practices and address the archaic bottlenecks in the areas of starting a business and protecting minority investors,” Drilon said.   /vvp

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TAGS: Business, Corporation Code of 1980, corporations, economy, Franklin Drilon, Philippine news updates
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