Over 11k firms face stiff SEC sanctions

LOOMING DEADLINE The Securities and Exchange Commission (SEC) has again reminded delinquent firms to file their reports. —PHOTO FROMSEC WEBSITE

More than 11,600 companies in the Philippines may be suspended for failing to submit their annual financial statements in the last eight years, according to the Securities and Exchange Commission (SEC).

This already far exceeds the two-year grace period given to corporations that did not submit reportorial requirements three times within a five-year period, the SEC said in a statement over the weekend.

Should the 11,677 “delinquent” companies fail to comply, their certificate of incorporation or registration will be revoked. Once this happens, a company can no longer engage in business activities.

The SEC again encouraged these firms to apply for the agency’s Enhanced Compliance Incentive Plan (ECIP), which provides significantly lower fees until Dec. 31.

Under ECIP, noncompliant corporations and those with a “delinquent” status may only have to pay P20,000 to settle their penalties.

The SEC’s current schedule of fees stipulate that these companies may incur up to P22,000 in penalties. On top of this, they have to pay fees for every month that they fail to submit the required documents.

Requirements

Meanwhile, suspended and revoked corporations, including those that have already filed petitions to lift their suspension and revocation orders, may pay a fee of P3,060 and only 50 percent of the fines and penalties imposed on them for their violations.

Once the corresponding fees are paid, these companies need to submit their pending requirements by the end of the year. Otherwise, the SEC said their paid ECIP fees would be forfeited.

As of end-November, at least 3,200 corporations applied and paid the ECIP fees, the SEC said.

Apart from suspension, noncompliant firms also face the risk of having to pay higher fees by the time the ECIP period lapses in January.

In April, the SEC raised fees by around 900 percent to 1,900 percent, as the previous schedule of fees was unchanged for 22 years.

For example, a corporation with retained earnings of up to P100,000 that did not file its annual financial and general information statements need to pay P10,000 for each report. An additional P1,000 will be charged for every month of delay.

This is up from only P1,000 per report, without any additional charge.

The ECIP launch came more than a year after the SEC unveiled its amnesty program, which attracted 81,700 companies that “successfully complied” with requirements. INQ