House approves revised Corporation Code on second reading

The House of Representatives has approved on second reading the proposed Revised Corporation Code of the Philippines, putting the chamber on track for the scheduled implementation in January 2019.

Among other significant provisions, House Bill 8374 (revised Corporation Code) allows perpetual existence of a corporation and its creation with only one person as incorporator.

The measure consolidates three different proposals filed by Reps. Xavier Jesus D. Romualdo (PDP-Laban, Camiguin); Evelina Escudero (NPC, Sorsogon) and Edgar Mary Sarmiento (LP, Samar).

Romualdo, chairman of the House Committee on Good Government and Public Accountability

is confident of the measure’s approval on third reading as the House leadership aims the bill to be signed into law by December.

“Our targets then are to have the conference committee report approved by both chambers in November, have the bill signed into law by the President in December, and for the Revised Corporation Code to take effect by January 2019,” Romualdo said.

“Our current Corporation Code was enacted in 1980. Obviously, much has changed in how the world does business, communicates, and undertakes commercial transactions over the last 38 years,” he explained.

Create new businesses Sponsored by the House Committee on Trade and Industry chaired by Iloilo City Rep. FerjenelBiron, HB 8374 also removes the required paid up capital stock for the purposes of incorporation.

Romualdo said the bill also authorizes the electronic submission of articles of incorporation or its amendments.

Remote communication for attendance in meetings, voting in absentia during meetings and issuance by the Securities and Exchange Commission (SEC) of certificates of incorporation in the form of an electronic document are provided in the measure.

Romualdo said the Revised Corporation Code adopts international best practices and standards in corporate law and will allow corporations in the Philippines to respond to and meet the needs and realities of the present times.

“By updating and modernizing our main body of corporate law, the Revised Corporation Code will encourage entrepreneurship and the creation of new businesses, contribute to ease of doing business, strengthen corporate governance, better protect the rights of stockholders, deter corporate abuse and fraud, and bolster anti-corruption measures and the regulatory authority of the Securities and Exchange Commission (SEC),” Romualdo explained.

The Senate approved its version of the measure last August.