SEC to further streamline amendment process

The Securities and Exchange Commission (SEC) is further streamlining the requirements and procedures for the amendment of a corporation’s articles of incorporation (AOI) and by-laws, to ensure consistency and timeliness in the processing of such transactions.

The Commission on November 5 issued for public comment the draft memorandum circular providing for  the Guidelines on the Classification, Processing, and Submission of Amendment Applications Filed through the Electronic Application for Modification of Entity Data (eAMEND) Portal, and the Imposition of Penalties for Non–submission of Amendment Documents.

Through the proposed guidelines, the SEC aims to strictly enforce the maximum processing times prescribed under Republic Act No. 11032, or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018 (EODB Act).

To this end, the proposed guidelines will allow applicants to submit an affidavit of undertaking in lieu of a monitoring clearance; clearly classify the different kinds of amendment applications into complex or highly technical transactions; and impose graduated penalties for late or non-submission of the documentary requirements, among others.

“The proposed rules provide clear guidance on the filing of amendments through our online portal, thereby streamlining and improving the efficiency of our services. At the same time, the penalties will be put in place to promote transparency, accountability, and strict compliance with the documentary requirements,” SEC Chairperson Francis Lim said.

Processing times

Launched in July 2024, eAMEND facilitates the acceptance, processing and approval of payment for amendment applications of corporations.

Applications through the portal are currently classified into two options: Simple Processing and Regular Processing.

Amendment applications that undergo Simple Processing are eligible to receive the digital certificate of their amended AOI upon initial system approval, while those under Regular Processing shall be issued only after review and approval by the SEC.

Under the proposed guidelines, applications that will undergo Simple Processing through eAMEND will be considered complex transactions. Under the EODB Act, complex transactions, which require evaluation by the concerned government employee for the resolution of complicated issues, must be processed within seven working days.

Transactions under Simple Processing will include change of corporate name, primary/secondary purpose, and principal office address; increase/decrease in number of directors/trustees; term of existence; and provision for tax exemption for non-stock, among others.

Meanwhile, applications under Regular Processing will be classified as highly technical transactions, or those that involve technical knowledge, specialized skills, or training in the processing and/or evaluation of such transactions. Under the EODB Act, highly technical transactions must be processed within 21 working days.

Transactions under Regular Processing will include applications for new Bylaws, amendments to by-laws involving five or more provisions, and dissolution through shortening of corporate term, amendments of articles of partnership, dissolution of partnerships, and all types of corporation conversions.

Simple Processing

Under the proposed guidelines, companies applying for amendments under Simple Processing should submit the system-generated or downloaded cover sheet for amendment, signed and notarized revised amendment form for Simple Processing, name reservation slip for transactions involving change of corporate name, and certification and/or favorable endorsement of the appropriate government agency or other SEC department.

They are also required to submit a monitoring clearance from the appropriate SEC departments, or an affidavit of undertaking.

Prior to the submission of the amendment application through the eAMEND portal, the applicant shall be required to pay an upfront fee equivalent to 100 percent of the filing fees.

The eAMEND portal will automatically generate a payment assessment form indicating the amount due for the application. Payment forms part of the submission of the amendment application for Simple Processing and must therefore be settled immediately.

A digital certificate of filing of amendments of AOI and/or amended By-laws will then be issued after payment and review by the assigned specialist/processor.

However, applications under Simple Processing will still be subject to postevaluation. The original hard copy of the Certificate of Filing of Amended AOI and/or Amended By-laws shall only be released after such evaluation.

Should deficiencies be found, a notice for compliance will be sent and the applicant should comply within 15 days. In case of non-submission of the compliance requirement, the application will automatically be cancelled. Incomplete or non-compliant submissions shall be given another 15 calendar days to comply based on the compliance notification they receive via email.

Penalties for Simple Processing

Failure to submit the amendment documents within 15 days from payment of the required filing fees for applications under Simple Processing will incur penalties.

A company, which will submit after the 15 day-prescribed period, but within 45 days from the issuance of the digital certificate or the payment of fees, will face a P5,000 penalty.

Failure to submit the hard copies within 45 days will render the company’s digital certificate null and void. The application and fees paid shall then be forfeited in favor of the Commission.

Regular Processing

Corporations applying for amendments must submit the following: systemgenerated/downloaded cover sheet for amendment; amended AOI and/or amended by-laws; new by-laws; directors/trustees’ certificate; secretary’s certificate; monitoring clearance from the appropriate SEC department, or an affidavit of undertaking; and certification and/or favorable endorsement of the appropriate government agency or SEC departments, if applicable.

Meanwhile, partnerships must submit a cover sheet and the signed and notarized, or apostilled/authenticated if signed and executed abroad, amended articles of partnership.

Companies applying for amendments via Regular Processing will be given five calendar days from the creation of an account to provide the required details and upload the complete documentary requirements. A compliance mark/letter will be issued to companies with incomplete submission, from which the applicant is given 15 days to comply.

The payment assessment form will be issued only after review and pre-approval by the assigned processor. The applicant shall pay within 15 days from the date reflected in the form.

The certificate will be issued only after the conduct of the review, in accordance with the timeline provided in the SEC Citizen’s Charter.

The SEC may allow a noncompliant company to file a motion for reconsideration for its cancelled application due to valid and justifiable reasons, provided that the prescribed penalties have been duly paid and subject to the payment of applicable fees.

The SEC Company Registration and Monitoring Department is accepting comments on the draft memorandum circular until November 17. Comments may be sent via email at mhssjangeles@sec.gov.ph.