SEC reminds corporations to clear their record as ECIP deadline draws near

Corporations have only less than a month left to clear their record and avoid higher fines and penalties for the late and non-filing of reportorial requirements to the Securities and Exchange Commission (SEC).

Ending on November 30, the SEC Enhanced Compliance Incentive Plan (ECIP) under Memorandum Circular (MC) No. 13, Series of 2024 provides eligible corporations a final chance to regain their good standing and pay penalties at significantly lower rates.

“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.

“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.

Republic Act No. 11232, or the Revised Corporation Code of the Philippines, requires all SEC-registered corporations to submit their annual financial statements (AFS) and General Information Sheets (GIS).

Noncompliance could lead to the imposition of applicable fines and penalties and, for extreme cases, the suspension or revocation of corporate registration. This strips a company of the powers and privileges granted to a registered corporation, including separate juridical personality, limited liability, and perpetual existence, among others.

Corporations who have incurred fines and penalties for the late or non-filing of their AFS or 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.

Under the program, non-compliant corporations, including those under the delinquent status, shall pay only 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, and a petition fee of P3,060 to lift their order of suspension/revocation.

However, payment of the ECIP fees does not guarantee that corporations will automatically regain their good standing. Eligible corporations will have to submit their latest due AFS and GIS as part of their application.

Suspended/revoked firms, meanwhile, will also have to submit their petition to lift the order of suspension or revocation, along with other supporting documents.

Eligible corporations, which fail to avail of ECIP, will be subjected to the updated scale of fines and penalties that the SEC implemented in April through MC No. 6, Series of 2024. The new rates are around 900% to 1,900% higher compared to the previous rates that had been in place for more than two decades.

The application process is fully online. To apply for ECIP, corporations should log in their respective accounts on the SEC Electronic Filing and Submission Tool (eFAST) and pay the fees through Electronic System for Payments to the SEC (eSPAYSEC). (PR)