Atty. Gregorio B. Austral, CPA
A reprieve for non-compliant and suspended companies
Companies registered with the Securities and Exchange Commission (SEC) that failed to comply with reportorial requirements now have a reprieve from facing fines and penalties.
The SEC recently issued Memorandum Circular No. 2, Series of 2023, granting amnesty for non-filing and late filing of the General Information Sheet (GIS) and Annual Financial Statements (AFS) and non-compliance with Memorandum Circular No. 28, s. 2020.
It may be recalled that the Commission, in pursuit of sustainable practices and streamlined and automated processes, no longer accepts the submission of hard copies of reports and has adopted the Electronic Filing and Submission Tool (eFAST) in the filing of the GIS and AFS.
The GIS must be filed within thirty (30) calendar days from: (i) the actual annual stockholders’ meeting for stock corporations; (ii) the actual annual members’ meeting for non-stock corporations; or (iii) the anniversary date of the issuance of the Securities and Exchange Commission (SEC) license for foreign corporations; while the filing of the AFS generally depends on the last digit of a corporation’s SEC Registration or license number, subject to the schedule prescribed by the Commission, provided that corporations whose fiscal year ends on a date other than 31 December may file their AFS within 120 days from the end of their respective fiscal years.
At the height of the pandemic, Commission required corporations, partnerships, associations, and individuals to create and/or designate email account addresses and cellphone numbers for transactions with the Commission with the issuance of MC No. 28, s. 2020.
Many companies encountered difficulties with the digital shift in report submissions, especially since the shift was abrupt during the pandemic.
To encourage compliance of regulated entities, ensure prudent identification of active and inactive corporations, and enhance and organize its database as part of its continuing efforts to nurture a healthy and vibrant corporate sector, the Commission grants amnesty to companies for the following violations: a) non-filing of GIS for the latest and prior years; b) late filing of GIS for the latest and prior years; c) non-filing of AFS for the latest and prior years; and d) late filing of AFS for the latest and prior years. Associations, partnerships, and persons that failed to comply with MC No. 28 are also granted a reprieve from hefty fines.
Under the latest memorandum circular, a fine of P5,000.00 is imposed for all violations on non-filing and late filing of GIS, and AFS and its attachments, while the penalty for non-compliance with MC No. 28, s. 2020 of P10,000.00 is waived.
Suspended and revoked corporations are also given amnesty of 50% of the assessed fines encompassing all violations on non-filing and late filing of GIS and AFS while the penalty for non-compliance with MC No. 28 is likewise waived.
On or before 30 April 2023, the duly authorized representative or resident agent of the corporation shall file an Online Expression of Interest Form via the Electronic Filing and Submission Tool (eFAST) to avail of the amnesty.