SEC slaps firms with higher fines for delinquencies
Higher penalties await delinquent corporations starting this month.
Starting April 1, the Securities and Exchange Commission (SEC) is imposing higher fines and penalties for the late and non-filing of reportorial requirements by corporations.
The higher fines and penalties come after the implementation of the SEC amnesty program, which gave corporations a chance to settle the fines and penalties they have accumulated for non-compliance with reportorial requirements at a lower cost.
The SEC said the previous scale of fines was implemented more than two decades ago, in July 2002.
Under the new scale of fines and penalties, one-person corporations (OPC) and domestic stock corporations with retained earnings of not more than P100,000 will incur a basic penalty of P5,000 for the late filing of their general information sheet (GIS) or unaudited financial statements (AFS), plus P1,000 for every month of continuing violation.
The same penalty applies to domestic nonstock corporations with a fund balance or equity of not more than P100,000, according to the SEC.
As for the non-filing of GIS or AFS by OPCs and domestic stock and non-stock corporations with retained earnings and fund balance/equity of not more than P100,000, a basic penalty of P10,000 will be incurred, plus P1,000 per month of continuing violation.
Foreign stock corporations with accumulated income/fund balance/members’ equity of less than P100,000, meanwhile, will incur a fine of P10,000 plus a late penalty of P6,000, if their report is filed after 30 days, or P12,000 penalty if filed after 60 days.
The base penalty for foreign non-stock corporations with less than P100,000 accumulated income/fund balance/members’ equity is P5,000, plus P6,000 penalty if filed after 30 days, or with an additional P12,000 penalty if filed after 60 days.
A fine of P10,000, plus a penalty of P12,000, shall be imposed for the non-filing of reports by both foreign stock and non-stock corporations with accumulated income/fund balance/members’ equity of less than P100,000.
The SEC said the submission of reportorial requirements such as the GIS and AFS is required under the Revised Corporation Code.
According to the commission, an OPC, stock or non-stock domestic corporation is deemed to have a late filing or submission if a report is filed after the due date, but still within a year after the prescribed deadline for filing.
If the report is filed more than one year from the prescribed period, the penalty shall be the base fine for nonfiling and the computation of the monthly penalty shall not exceed 12 months, the SEC said.
For stock and non-stock foreign corporations, the commission said late filing means a report was filed after 30 days from the anniversary date of the issuance of the SEC license for GIS or from the prescribed deadline for AFS.
Should a filing be made after 60 days, fines shall be based on the base fine for non-filing, and the computation of the monthly penalty shall not exceed 12 months, it said.
Meanwhile, the penalty for non-compliance with SEC Memorandum Circular 28, Series of 2020 (MC 28) has been doubled to P20,000 from the previous rate of P10,000.
The SEC said filing of the MC 28 report shall be considered late if made beyond 30 calendar days from the issuance of the certificate of registration, license, or authority for all types of corporations.