THE SECURITIES and Exchange Commission (SEC) urged corporations to avail themselves of its enhanced compliance incentive plan (ECIP) before the Nov. 30 deadline to avoid higher penalties.
“With less than a month left before we officially close ECIP, we encourage noncompliant, suspended, and revoked corporations to complete their applications to ensure the continuous operations of their businesses,” SEC Chairperson Emilio B. Aquino said in a statement on Monday.
“We remind corporations that the submission of reportorial requirements is mandated by law, and failure to comply could result in the suspension or revocation of their corporate registration,” he added.
Provided under Memorandum Circular (MC) No. 13, the ECIP allows companies to clear their records at lower rates. The initiative was launched on Sept. 2.
“Corporations that have incurred fines and penalties for the late or non-filing of their annual financial statements (AFS) or general information sheets (GIS), as well as noncompliance with MC No. 28, Series of 2020, which requires corporations to designate official and alternative contact details, may apply for ECIP,” the SEC said.
Noncompliant and delinquent corporations only need to pay P20,000 to settle their fines and penalties for the covered violations, while suspended or revoked corporations will only have to pay 50% of their total assessed penalties, as well as a petition fee of P3,060 to lift their suspension or revocation order.
The SEC defines non-compliant corporations as those that have intermittently or consecutively failed to submit their GIS and AFS in previous years, or have not complied with MC 28.
On the other hand, delinquent corporations refer to those that have not filed their AFS or GIS three times, consecutively or intermittently, within a five-year period.
The SEC reminded that payment of the ECIP fees does not guarantee an automatic good standing for corporations since they still need to submit their latest AFS and GIS as part of their application.
Suspended and revoked firms also need to submit their petition to lift the suspension or revocation order along with other supporting documents.
Corporations that fail to avail themselves of the ECIP will be subjected to the updated scale of fines and penalties implemented by the SEC in April under MC No. 6.
The new rates are around 900% to 1,900% higher compared to the previous rates that had been in place for over two decades.
All SEC-registered corporations are mandated to submit their AFS and GIS as provided by Republic Act No. 11232 or the Revised Corporation Code of the Philippines. — Revin Mikhael D. Ochave