DOF encourages corporations to avail of SEC amnesty program

The Department of Finance (DOF) encourages corporations that have incurred fines or whose certificates of registration have been suspended or revoked due to the late and non-filing of certain reportorial requirements to avail the Securities and Exchange Commission (SEC)’s amnesty program.

Issued on March 15, 2023, SEC Memorandum Circular No. 2, Series of 2023 provides for the Grant of Amnesty for Non-filing and Late Filing of the General Information Sheet (GIS) and Annual Financial Statement (AFS), and Non-Compliance with Memorandum Circular No. 28, Series of 2020 (MC 28).

The SEC subsequently issued on April 25, 2023 SEC Memorandum Circular No. 6, Series of 2023 to extend the deadline for applications for amnesty to June 30, and to give applicants a longer period of 90 days within which to submit certain requirements.

After the extended deadline of June 30, an updated scale of fines and penalties for the covered reportorial requirements shall be implemented.

“The amnesty offered by the SEC is a great opportunity for eligible corporations to start anew, maintain their good standing, and ensure that they will continue enjoying the benefits and advantages of being a corporation,” Finance Secretary Benjamin Diokno said.

Under the guidelines, the SEC will provide amnesty on the unassessed and/or already assessed unpaid fines and penalties imposed by the Commission for the non-filing and late filing of the GIS for the latest and prior years, as well as the non-filing and late filing of AFS, including its attachments such as the Certificate of Existence of Program/Activity, Non-Stock, Non-Profit Organization Forms, for the latest and prior years.

The amnesty program reduces the penalty for the non-filing and late filing of GIS and AFS for Non-Compliant Corporations to PHP5,000. The rates will apply provided that the corporation or entity will submit the latest reportorial requirement due at the time of the application, and comply with MC 28.

Meanwhile, Revoked or Suspended Corporations will only need to settle 50 percent of the total assessed fines, encompassing all violations on the non-filing and late filing of GIS and AFS.

Furthermore, the PHP10,000 fine for the noncompliance with MC 28 for both Non-Compliant and Revoked or Suspended Corporations will be waived.

Pursuant to the Guidelines on the Imposition of Fines or Penalties for Non-Compliance with Reportorial Requirements, a corporation that fails to submit their GIS or AFS is fined for PHP1,000 to PHP10,000 per report per year, depending on the retained earnings reflected in the corporation’s latest AFS.

On the other hand, a nonstock corporation is fined for PHP500 to PHP5,000 for non-filing of their GIS and AFS. The late filing of reportorial requirements, for both stock and non-stock corporations, is subject to a fine equivalent to 50 percent of the fines imposable for non-filing of reports.

Covered entities

The amnesty will be extended to corporations, including branch offices, representative offices, regional headquarters, and regional operating headquarters of foreign corporations and foundations.

It shall also cover associations, partnerships, and persons under the jurisdiction and supervision of the Commission that failed to comply with MC 28.

However, the amnesty program does not cover corporations whose securities are listed on the Philippine Stock Exchange (PSE); those whose securities are registered but not listed on the PSE; those considered as public companies; those with intra-corporate dispute; those with disputed GIS; and other corporations covered under Section 17.2 of Republic Act (RA) No. 8799, or the Securities Regulation Code.

Application process

To qualify for amnesty, the duly authorized representative or resident agent of the corporation must file an online Expression of Interest Form (EOI) via the Electronic Filing and Submission Tool (eFAST).

Applicants for both domestic and foreign corporations must submit the following requirements: the latest due AFS or the undertaking to submit said AFS within 90 calendar days from the issuance of confirmation of payment; the latest due amended FS; latest due GIS and amended GIS, if any; and proof of compliance with MC 28.

Non-Compliant Corporations must file their EOI through the eFAST, together with the proof of compliance with MC 28.

A Payment Assessment Form (PAF) reflecting the fixed amnesty amount of PHP5,000 will then be generated by the system. The fee can be settled only through the Electronic System for Payment to SEC (eSPAYSEC).

The applicant must then upload the notarized Application for Amnesty Form and all other requirements provided in the memorandum circular.

Afterwards, a confirmation of payment of amnesty fees will be issued to their registered email address once the submitted documents have been evaluated and deemed compliant.

As for Revoked or Suspended Corporations, they must file their online EOI and upload the Petition to Lift Order of Suspension/Revocation and proof of MC 28 compliance through eFAST.

Applicants must first settle the petition fee of PHP3,060 via eSPAYSEC, then upload the Notarized Application for Amnesty Form and all other requirements. They will then receive a PAF containing the amount reflecting 50 percent of the total assessed fines.

After the payment for the fines has been settled, the applicant will receive the payment confirmation for amnesty through their registered email address.

The corporation’s status will subsequently be updated, subject to the processing and issuance of the Lifting of Revocation and/or Order of Revival.

“The success of the amnesty program will ultimately redound to the benefit of the corporate sector, investors, consumers and other stakeholders. Furthermore, it will give government agencies insights on how to better supervise and support corporations,” Secretary Diokno said.

Applicants may visit https://bit.ly/AmnestyTutorial to get a step-by-step guide on how to avail of the program.