Registration requirements for local firms to be eased
THE SECURITIES and Exchange Commission (SEC) is looking to further relax the requirements for the registration of new domestic corporations, particularly for the authentication of articles of incorporation.
In a notice issued on April 20, the Commission released for public comment a draft memorandum circular providing for the Guidelines on Authentication of Articles of Incorporation in Applications for Registration of New Domestic Corporations.
Under the proposed guidelines, the SEC will accept for registration articles of incorporation that are accompanied by a certificate of authentication signed by all incorporators in the form prescribed by the Commission.
Both the articles of incorporation and the certificate of authentication will no longer have to be notarized or consularized.
Nonetheless, the incorporators may choose to acknowledge the articles of incorporation before a notary public. If executed outside the Philippines,( the articles of incorporation may be apostilled or notarized or authenticated by a Philippine diplomatic or consular officer.
The proposed guidelines align with Section 13 of Republic Act No. 11232, or the Revised Corporation Code of the Philippines, which requires corporations to file with the SEC articles of incorporation, duly signed and acknowledged or authenticated, in such form and manner as may be allowed by Commission.
The proposed guidelines also reiterate provisions of the Revised Corporation Code against the use of fraud or misrepresentation in obtaining corporate registration.
The registration of a corporation, which has procured its certificate of registration through fraud or misrepresentation, shall be revoked.
Furthermore, those responsible for the formation of said corporation or who assisted directly or indirectly therein shall be punished with a fine ranging from P200,000 to P2 million. When the violation is injurious or detrimental to the public, the penalty shall be a fine ranging from P400,000 to P5 million.
Willfully certifying incomplete, inaccurate, false or misleading statements or reports shall likewise be punishable with a fine ranging from P20,000 to P200,000. When the wrongful certification is injurious or detrimental to the public, the responsible person may be punished with a fine ranging from P40,000 to P400,000.
Liability for such offenses shall be separate from any other administrative, civil or criminal liability under the Revised Corporation Code and other laws.
The SEC expects the proposed guidelines relaxing the registration requirements for domestic corporations to help improve the ease of doing business in the Philippines and subsequently bolster the economy.
The proposed set of Guidelines on Authentication of Articles of Incorporation in Applications for Registration of New Domestic Corporations is available on the SEC website. All interested parties are invited to submit their comments and inputs on the draft guidelines on or before April 30, 2020 through email at dcsotto@sec.gov.ph.