Nearly 120K firms suspended by SEC

THE corporate registrations of 117,885 companies have been suspended due to non-operation and noncompliance with reportorial requirements, the Securities and Exchange Commission (SEC) said on Wednesday.

The SEC, through an order issued on February 16, suspended the certificates of incorporation of firms that had failed to submit their annual reports for five years and those inactive for more than five straight years.

The firms were given 30 days from the publication of the suspension order to avail of “existing remedies under the laws, rules, and regulations implemented by the commission.”

Pursuant to Republic Act (RA) 11232 or the Revised Corporation Code of the Philippines, registered companies are mandated to file their reportorial requirements, including annual financial statements and general information sheets.

Under Section 177 of the Code, corporations that fail to comply with reportorial requirements three times, consecutively or intermittently, within a period of five years may be placed under delinquent status, the regulator explained.

Section 21, meanwhile, gives the commission the authority to tag firms as delinquent if they continue to be inoperative despite due notice and hearing.

“The commission may also suspend, after due notice and hearing, the franchise or certificate of incorporation of corporations, in accordance with Presidential Decree 902-A, [RA] 8799, or the Securities Regulation Code, and Section 179 of the RCC,” it noted.

The suspension order was issued after a December 2023 amnesty deadline lapsed. The amnesty program had offered non-compliant, suspended and revoked firms a “chance to recover their good standing by paying the reduced fees.”

SEC Chairman Emilio Aquino earlier this month said that approximately 85,000 corporations had availed of the scheme, which started in March 2023.

The commission claimed to have recorded a “higher” compliance rate compared to regulators from neighboring countries.