The Securities and Exchange Commission (SEC) is set to ease the requirements for the registration of new domestic corporations, particularly when it comes to authenticating the articles of incorporation.
The SEC expects the proposed guidelines to “help improve the ease of doing business in the Philippines and subsequently bolster the economy.”
In a notice issued on April 20, the SEC released for public comment a draft memorandum circular stating that it would accept articles of incorporation that are accompanied by a certificate of authentication signed by all incorporators in the form prescribed by the SEC.
Both the articles of incorporation and the certificate of authentication will no longer have to be notarized. Nonetheless, the incorporators may still choose to acknowledge the articles of incorporation before a notary public. If executed outside the Philippines, the incorporators may opt for the articles of incorporation to be 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 the SEC.
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 any corporation that had procured its certificate of registration through fraud or misrepresentation will be revoked. Furthermore, those responsible for the formation of such corporations will be fined ranging from P200,000 to P2 million. When the violation is injurious or detrimental to the public, the fine ranges from P400,000 to P5 million.
Willfully certifying incomplete, inaccurate, false or misleading statements or reports will 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 will be separate from any other administrative, civil or criminal liability under the Revised Corporation Code and other laws.
All interested parties are invited to submit their comments and inputs on the draft guidelines on or before April 30, 2020.
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