Businesses urged to start ‘fresh’ in amnesty trade-off as filing deadline looms

MANILA  -The Securities and Exchange Commission (SEC) is urging corporations and associations that have failed to submit their annual reports to avail themselves of an amnesty program or face higher penalties starting Oct. 1 this year.

The corporate watchdog said around 40,000 companies had already filed their amnesty applications, although it was unclear how many entities were still noncompliant. There are over 600,000 active corporations registered with the SEC.

The deadline for all amnesty applications is on Sept. 30, as provided under memorandum circular No. 9, series of 2023.

“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 chair Emilio B. Aquino said in a statement over the weekend.

“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.

A hefty increase

Firms will face an estimated 90-percent increase in the payment of fines and penalties for late and nonsubmission of reportorial requirements starting Oct. 1.

The SEC will also start strictly imposing fines for noncompliant firms on that date. The fine will be equivalent to P20,000, representing a 100-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 offense and it has been given reasonable notice regarding its delinquent status,” the SEC said.

The regulator issued the guidelines for the amnesty program last March 15.

This comes in the form of a waiver or reduction of fees and is part of the SEC’s efforts to encourage its regulated entities to comply with their reportorial requirements under Republic Act No. 11232, or the Revised Corporation Code.

On June 30, the regulator streamlined the amnesty application process in order to encourage more corporations to avail of the program.

Corporations will need to submit 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 annual financial statement within 90 days from amnesty application. INQ