Authentication requirements for registration of new domestic corporations eased
THE Securities and Exchange Commission (SEC) has made it easier for people to start a business when it recently issued new rules adopting the best practices recommended by the World Bank’s Doing Business team and that aim to improve the global competitiveness of the Philippines’ corporate sector.
These are contained in SEC Memorandum Circular 16, Series of 2020 (MC16, s. of 2020), or “Guidelines on Authentication of Articles of Incorporation in Applications for Registration of New Domestic Corporations.”
The SEC issued MC16, s. of 2020 in line with Section 13 of Republic Act 11232, or the “Revised Corporation Code of the Philippines,” which requires corporations to file with the SEC their articles of incorporation, duly signed, acknowledged or authenticated and done in such a way that is allowed by the commission. The circular took effect on April 30, 2020.
This circular is a game-changer for new domestic corporations because the SEC now accepts articles of incorporation accompanied by a certificate of authentication signed by all incorporators in the form prescribed by the commission.
Through this mode of authentication, both the articles of incorporation and certificate of authentication need not be notarized or consularized (Section 2, MC16, s. of 2020). But should the incorporators choose to have the documents notarized, they may still do so (Section 3, MC16, s. of 2020).
For articles of incorporation executed abroad, the authentication may be apostilled, as long as it is in line with the “Apostille Convention” or notarized/ authenticated by a Philippine consular or diplomatic office (Section 4, MC16, s. of 2020).
Note that, for registration of foreign investments or those with more than 40-percent foreign equity, the application shall be accompanied by SEC Form F-100, an application for registration of investments of non-Filipino citizens. This authentication requirement, made in accordance with Section 4 of MC16, s. of 2020, is only required if the SEC Form F-100 is executed abroad. Otherwise, no additional authentication is required.
With the new rules in place, the SEC hopes that this would make registering businesses easier for businessmen. I personally believe this would make things much easier for all our stakeholders, especially during the coronavirus pandemic. KelvinLesterK.Leeisacommissioner Exchange Commission. The viewsandopinionsherearehis own.Emailyourcommentsand questionstooclee@sec.gov.ph.