SEC extends deadline for lower fines to Dec. 31

THE Securities and Exchange Commission (SEC) has extended the deadline to Dec. 31 for companies to apply for its incentive program, which reduces fines and penalties for late or non-filing of reportorial requirements.

Memorandum Circular (MC) No. 17, signed on Nov. 28, extended the application deadline for the Enhanced Compliance Incentive Plan (ECIP) to Dec. 31, the SEC said in an e-mailed statement over the weekend. The ECIP’s original deadline was Nov. 30.

The SEC said that over 3,200 corporations had applied and paid the ECIP fees as of Nov. 28.

ECIP allows noncompliant, delinquent, suspended, or revoked corporations to pay fines and penalties for failure to submit their annual financial statements (AFS), general information sheet (GIS), and official contact details at lower rates.

Applicant corporations must submit their latest AFS and GIS by Dec. 31.

Under the ECIP, noncompliant and delinquent corporations can settle their fines and penalties for P20,000.

Suspended and revoked registrations only need to pay 50% of their assessed fines and penalties, plus P3,060 to process their petition to lift the suspension or revocation order.

Companies that fail to submit the complete requirements by Dec. 31 would be subject to the updated scale of fines and penalties implemented in April through MC No. 6.

The new rates are around 900% to 1,900% higher compared to the previous rates.

Under the MC, a corporation with retained earnings up to P100,000 that files its AFS and GIS five months late must pay a base rate of P5,000 per report, up from P500.

A corporation with retained earnings up to P100,000 that fails to file its AFS and GIS for the year must pay a base rate of P10,000 per report, up from P1,000.

Under Republic Act No. 11232, or the Revised Corporation Code, a corporation is deemed delinquent if it fails to submit reportorial requirements three times, consecutively or intermittently, within a period of five years.

Delinquent corporations have two years to resume operations or risk having their registration revoked. — Revin Mikhael D. Ochave