2025 Filing of Annual Financial Statements and General Information Sheet

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To maintain an organized and orderly filing of Annual Financial Statements (AFS) and General Information Sheet (GIS), and to comply with the zero-contact policy and automation of business-related transactions mandated by Republic Act No. 11032, otherwise known as the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, the Securities and Exchange Commission (SEC), pursuant to its authority under Republic Act No. 11232, otherwise known as the Revised Corporation Code of the Philippines, and Republic Act No. 8799, otherwise known as the Securities Regulation Code, hereby adopts the following measures in the filing of annual reports with the Commission:

• ANNUAL FINANCIAL STATEMENTS
  • All corporations, including branch offices, representative offices, regional headquarters and regional operating headquarters of foreign corporations, whose fiscal years ended on 31 December, shall file their AFS through the SEC Electronic Filing and Submission Tool (eFAST). The deadlines for filing of the AFS shall be in accordance with the following schedule, depending on the last numerical digit of their SEC registration or license numbers:

SUBMISSION DATES	Last Digit of SEC Registration/ License Number
May 2,5,6,7,8,9,12,13,14,15 and 16	1 and 2
May 19,20,21,22,23,26,27,28,29 and 30	3 and 4
June 2,3,4,5,6,9,10,11and 13	5 and 6
June 16,17,18,19,20,23,24,25,26 and 27	7 and 8
June 30/ July 1,2,3,4,7,8,9,10 and 11	9 and 0

All corporations under the jurisdiction of the SEC Extension Offices shall be governed by the same schedule in 2025.

• The above filing schedule shall not apply to the following corporations:
  • Those whose fiscal years end on a date other than 31 December. These entities shall file their AFS within 120 calendar days from the end of their respective fiscal years.
    
    However, for brokers and dealers whose fiscal years end on December 31, SEC Form 52 – AR shall be filed with the Commission on April 30. Brokers and dealers whose fiscal years end on a date other than December 31 shall file SEC Form 52- AR, 120 calendar days after the close of their respective fiscal years.
    
  • Those 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, and other entities covered under Sec. 17.2 of the SRC shall file their AFS within 105 calendar days after the end of fiscal year, as attachment to their Annual Reports (SEC Form 17-A), in accordance with the Implementing Rules and Regulations of the SRC. Non-listed registered issuers of securities which filed SEC form 17-EX (Notification of Suspension of Duty to file reports under Section 17 of the Securities Regulation Code) for 2024 shall observe the AFS filing period as prescribed in Part I(1) of 2(a), as applicable.
    
  • Those whose AFS are being audited by the Commission on Audit (COA), provided that the following documents are attached to their AFS:
    • An affidavit signed by the President and Treasurer (or Chief Finance Officer, where applicable) attesting to the fact that the company timely provided the COA with the financial statements and supporting documents and that the audit of the COA has just been concluded; and
    • A letter from the COA confirming the information provided in the above affidavit.
• All corporations may file their AFS regardless of the last numerical digit of their registration or license numbers before the first day of the coding schedule pertaining to said, as provided in Item 1
• Late filings or submission after July 11, 2025 provided in Item 1 shall be subject to the prescribed penalties which shall be computed from the date of the last day of filing stated in Item 1;
• The AFS to be submitted, other than the consolidated financial statements, shall be stamped “received” by the Bureau of Internal Revenue (BIR) or its authorized banks, unless the BIR allows an alternative proof of submission for its authorized banks (e.g., bank slips) and/or other facilities. For companies, which filed their AFS through the BIR e-AFS system, they shall attach the system-generated Transaction Reference Number/Confirmation Receipt issued by the BIR, in lieu of the manual “received” stamp.
• The following shall submit annual audited financial statements (AAFS), as provided under the general financial reporting requirements stated in Revised SRC Rule 68, which was approved by the Commission En Banc on 19 August 2019;
  • Stock corporation with total assets or total liabilities of Six Hundred Thousand Pesos (P600,000.00) or more as prescribed under the RCC and any of its subsequent revisions or such amount may be subsequently prescribed;
  • Nonstock corporation with total assets or total liabilities of Six Hundred Thousand Pesos (P600,000.00) or more as prescribed under the RCC and any of its subsequent revisions or such amount as may be subsequently prescribed;
  • Branch offices/representative offices of stock foreign corporations with assigned capital in the equivalent amount of Ine Million Pesos (Php1,000,000.00) or more
  • Branch offices/representative offices of nonstock foreign corporations with total assets in the equivalent amount of One Million Pesos (Php1,000,000.00) or more;
  • Regional operating headquarters of foreign corporation with total revenues in the equivalent amount of One Million Pesos (Php1,000,000.00) or more;
    
    Financial statements of branch offices of foreign corporations licensed to do business in the Philippines by the Commission shall comply with the requirements of this Rule unless they are otherwise determined by the Commission as not applicable.
• Corporations. which do not meet the thresholds stated in Item 6 herein, may submit their AFS, certified under oath by the corporation’s treasurer or chief financial officer.
  
• GENERAL INFORMATION SHEET (GIS)
  All corporations shall file with the Commission, through eFAST, their GIS within 30 calendar days from:
  • For Stock Corporations, the date of actual annual stockholders’ meeting;
  • For Nonstock Corporations, the date of actual annual members’ meeting.
  • For Foreign Corporations, the anniversary date of the issuance of their respective SEC licenses.

• SEC FORM FOR APPOINTMENT OF OFFICERS (FOR ONE PERSON CORPORATIONS ONLY)
  
  Within 15 days from the date of issuance of the OPC’s Certificate of incorporation or within 5 days from when the change was reflected (MC No. 7 s. 2019).
  
• ALL REPORTS
  • All corporations, both stock and nonstock, are required to file their annual reportorial requirements through eFAST, formerly known as the Online Submission Tool (OST) and which may be accessed at https://efast.sec.gov.ph/ following the deadline specified in Item 1 in the case of AFS submissions. All filers of GIS and AFS, regardless of the number of reports to be filed with the Commission, shall be accommodated through fast.
    
    Other reports not yet accepted through eFAST may be submitted through email at ic************@*****ov.ph. Submission of reports over the counter and/or through mail or courier shall no longer be accepted.
    
    Any problem encountered in the enrollment and submission of AFS and GIS in eFAST shall be accommodated through the email addresses and telephone numbers provided in the SEC Contact Center posted at https://www.sec.gov.ph/contact-us/
    
  • The SEC shall accept all reports filed through eFAST regardless of their form and contents. Reports will be reverted only after acceptance for post review for the following reasons:
    • Poor image quality (e.g., blurred and unreadable);
    • Horizontal image orientation;
    • Wrong company profile;
    • Wrong period covered and Submission type.
    • Other requirements, please refer to MC 3 series of 2021.
      
      Reports reverted for the abovementioned reasons shall be deemed as not filed.
  • eFAST Operating Hours. The eFAST shall be open twenty four (24) hours. However, all review, acceptance and reversion shall be done only from Mondays to Fridays.
  • Submissions made on a Saturday, Sunday, holiday or during work suspension shall be considered filed on the next working day.
    
    Non-listed registered issuers and non-listed public companies that timely filed their SEC Form 17-L (Notification of Inability to file all or any Portion of SEC form 17-A or 17-Q) to extend the submission of their SEC Form 17-A (Annual Report) or SEC Form 17-Q (Quarterly Report) pursuant to SRC Rule 17.1.1.6.2.2 shall strictly observe the respective 15 and 5- calendar day extension period for the said reports such that if the last day of the said extension period falls on a Saturday, Sunday, holiday or during work suspension, the Annual or Quarterly Report shall be filed no later than the last working day within the respective 15 to 5 – calendar day extension period.
    
  • The reckoning date for the receipt of reports is the date they are initially submitted through eFAST, if the filed report is compliant with the requirements stated above.
    
    A report, which is reverted, is considered not filed or not received. A notification will be sent to the filer, stating the reason for the rejection of the report in the remarks box based on the reasons stated above.
    
    All reportorial requirements submitted by the corporations shall, subject to review by the Commission, and if warranted, may impose appropriate penalties for violation of existing laws, rules and regulations, if any.
    
    All other circulars, memoranda and implementing rules and regulations inconsistent with the foregoing provisions shall be deemed modified or amended accordingly.

This Memorandum Circular shall be published in two newspapers of general circulation.

2024 Filing of Annual Financial Statements and General Information Sheet 

All Corporations, including branch offices, representative offices, regional headquarters and regional operating headquarters for foreign corporations, whose fiscal years ended on 31 December 2023, shall file their AFS through the SEC Electronic Filing and Submission Tool (eFAST). The deadlines for filing of the AFS shall be in accordance with the following schedule, depending on the last numerical digit of their SEC registration or license numbers: 

SUBMISSION DATES	LAST DIGIT OF SEC REGISTRATION/LICENSE NUMBER
April 29 , 30 May 2,3,6,7,8,9,10	1 and 2
May 13,14,15,16,17,20,21,22,23, 24	3 and 4
May 27,28,29,30,31/ June 3,4,5,6,7	5 and 6
June 10,11,13,14,17,18,19,20,21	7 and 8
June 24, 25, 26, 27, 28 /July 1,2,3,4,5	9 and 0

All corporations under the jurisdiction of the SEC Extension Offices shall be governed by the same schedule om 2024. 

The above filing schedule shall not apply to the following corporations: 

Those whose fiscal years end on a date other than 31 December 2023. These entities shall file their AFS within 120 calendar days from the end of their respective fiscal years. 

However, for brokers and dealers whose fiscal years end on December 31, SEC Form 52-AR shall be filed with the Commission on April 30. Brokers and dealers whose fiscal years end on a date other than December 31, shall file SEC Form 52-AR, 120 calendar days after the close of their respective fiscal years. 

Those 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, and other entities covered under Sec. 17.2 of the SRC. These entities shall file their AFS within 105 calendar days after the end of fiscal year, as attachment to their Annual Reports (SEC Form 17-A), in accordance with the Implementing Rules and Regulations of the SRC. Non-listed registered issuers of securities which filed SEC Form 17-EX (Notification of Suspension of Duty to file reports under Section 17 of the Securities Regulation Code) for 2024 shall observe the AFS filing period as prescribed by in Part I (1) of (2a), as applicable. 

Those whose AFS are being audited by the Commission on Audit (COA), provided that the following documents are attached to their AFS: 

An affidavit signed by the President and Treasurer (or Chief Finance Officer, where applicable) attesting to the face that the company timely provided the COA with the financial statements and supporting documents and that the audit of the COA has just been concluded; and 

A letter from the COA confirming the information provided in the above affidavit. 

Late Filings or submissions after the due dates provided in Item 1 shall be accepted starting July 8, 2024 and shall be subject to the prescribed penalties which shall be computed from the date of the last day of filing stated in Item 1;  

The AFS to be submitted, other than the consolidated financial statements, shall be stamped “received” by the Bureau of Internal Revenue (BIR) or its authorized banks, unless the BIR allows an alternative proof of submission for its authorized banks (e.g., bank slips) and/or other facilities. For companies, which filed their AFS through the BIR a-AFS system, they shall attach the system-generated Transaction Reference Number issued by the BIR, in lieu of the manual “received” stamp. 

The AFS shall include the basic components prescribed under Revised SRC Rule 68. Failure to comply with any of the formal requirements under said Rule, including any material deficiency or misstatement that may be found upon evaluation of the specific contents thereof, shall be considered a sufficient ground for the imposition of penalties by the SEC. The acceptance and receipt by the Commission of the financial statements shall be without prejudice to such penalties. 

The following shall submit annual audited financial statements (AAFS), as provided under the general financial reporting requirements stated in Revised SRC Rule 68, which was approved by the Commission En Banc on 19 August 2019: 

Stock Corporation with total assets or liabilities of Six Hundred Thousand Pesos (Php600,000.00) or more as prescribed under the RCC and any of its subsequent revisions or such amount as may be subsequently prescribed; 

Nonstock corporations with total assets or total liabilities of Six Hundred Thousand (Php600,000.00) or more as prescribed under the RCC and any of its subsequent revisions or such amount as may be subsequently prescribed; 

Branch offices/representative offices of stock foreign corporations with assigned capital in the equivalent amount of One Million Pesos (Php1,000,000.00) or more; 

  Branch offices/representative offices of nonstock foreign corporation with total assets in the equivalent amount of One Million Pesos (Php1, 000,000.00) or more; 

Regional operating headquarters of foreign corporations with total revenues in the equivalent amount of One Million Pesos (Php1, 000,000.00) or more; 

Financial statements of branch offices of foreign corporations licensed to do business in the Philippines by the Commission shall comply with the requirements of this Rule unless they are otherwise determined by the Commission as not applicable. 

Corporations, which do not meet the thresholds stated in Item 6 herein, may submit their AFS, certified under oath by the corporation’s treasurer or chief financial officer. 

 
II. GENERAL INFORMATION SHEET (GIS) 

1. All corporations shall file with the Commission, through eFAST, their GIS  within 30 calendar days from: 

(a) For Stock Corporations, the date of actual annual stockholders’ meeting; 

(b) For Nonstock Corporations, the date of actual annual members’ meeting;  

(c) For Foreign Corporations, the anniversary date of the issuance of their respective SEC licenses. 

III. SEC FORM FOR APPOINTMENT OF OFFICERS (FOR ONE PERSON CORPORATIONS ONLY) 

Within 15 days from the date of issuance of the OPC’s Certificate of Incorporation or within 5 days from when the change was reflected (MC No. 7 s. 2019). 

IV. ALL REPORTS  

1. All corporations, both stock and nonstock, are required to file their annual reportorial requirements through eFAST, formerly known as the Online Submission Tool (OST) and which may be accessed at https://efast.sec.gov.ph/ following the deadline specified in Item 1 in the case of AFS submissions. All filers of GIS and AFS, regardless of the number of reports to be filed with the Commission, shall be accommodated through eFAST.  

Other reports not yet accepted through eFAST may be submitted through email at ic************@*****ov.ph. Submission of reports over the counter and/or through mail or courier under the SEC Express Nationwide Submission (SENS) facility shall no longer be accepted. 

Any problem encountered in the enrollment and submission of AFS and GIS in eFAST shall be accommodated through the email addresses and telephone numbers provided in the SEC Contact Center posted at https://www.sec.gov.ph/contact-us/ 

2. The SEC shall accept all reports filed through eFAST regardless of their form and contents. Reports will be reverted only for the following reasons: 

(a) Poor image quality (e.g., blurred and unreadable); 

(b) Horizontal image orientation; 

(c) Wrong company profile; 

(d) Wrong period covered and Submission type. 

Reports reverted for the abovementioned reasons shall be deemed as not filed. 

3.eFAST Operating Hours. The eFAST shall be open twenty four (24) hours. However, all review, acceptance and reversion shall be done only from Mondays to Fridays. 

4. Submissions made on a Saturday, Sunday, holiday or during work suspension shall be considered filed on the next working day. 

Non-listed registered issuers and non-listed public companies that timely filed their SEC Form 17-L (Notification of Inability to file all or any Portion of SEC form 17-A or 17-Q) to extend the submission of their SEC Form 17-A (Annual Report) or SEC Form 17-Q (quarterly Report) pursuant to SRC Rule 17.1.1.6.2.2 shall strictly observe the respective 15 and 5-calendar day extension periodfor the said reports such that if the last day of the said extension period falls on a Saturday, Sunday, holiday or during work suspension, the Annual or Quarterly Report shall be filed no later than the last working day within the respective 15 to 5 –calendar day extension period. 

5. The reckoning date for the receipt of reports is the date they are initially submitted through eFAST, if the filed report is compliant with the requirements stated above. 

A report, which is reverted, is considered not filed or not received. A notification will be sent to the filer, stating the reason for the rejection of the report in the remarks box based on the reasons stated above. 

All reportorial requirements submitted by the corporations shall, subject to review by the Commission, and if warranted, may impose appropriate penalties for violation of existing laws, rules and regulations, if any. 

All other circulars, memoranda and implementing rules and regulations inconsistent with the foregoing provisions shall be deemed modified or amended accordingly. 

This Memorandum Circular shall be published in two newspapers of general circulation. 

WHEREAS, Section 179 (o) and (p) of Republic Act (RA) No. 11232, otherwise known as the “Revised Corporation Code of the Philippines” (“RCC or Code”), grants the Commission the power and authority to: (i) formulate and enforce standards, guidelines, policies, rules and regulations to carry out the provision of the RCC; and (ii) exercise such other powers provided by law or those which may be necessary or incidental to carry out the powers expressly granted to it.

WHEREAS, Section 13 therein provides that the articles of incorporation and other applications for amendments thereto may be filed in the form of an electronic documents in accordance with its rules and regulation on electronic filing as supported by Section 180 where the Commission is directed to develop and implement an electronic filing and monitoring system.

WHREAS, Section 16 of the RCC provides that no articles of incorporation or amendment to articles of incorporation of banks, banking and quasi-banking institutions, preneed, insurance and trust companies, NSSLAs, pawnshops, and other financial intermediaries shall be approved by the Commission unless accompanied by a favorable recommendation of the appropriate government agency to the effect that such bylaws or amendments are in accordance with law.

WHEREAS, Section 45 of the RCC provides that the Commission shall not accept for filing the bylaws or any amendment thereto of any bank, banking institutions, building and loan association, trust company, insurance company, public utility, educational institution, or other special corporations governed by special laws, unless accompanied by a certificate of the appropriate government agency to the effect that such bylaws or amendments are in the accordance with law.

WHEREAS, in pursuit of sustainable practices, streamlined and automated processes, the Securities and Exchange Commission allows the amendment application through the eAMEND portal.

WHEREAS, the eAMEND portal is a user-friendly online filing and submission amendment portal that facilitates the acceptance, processing, approval for payment, and issuance of the digital copy of the Certificate Amendment of Domestic Stock and Non-stock Corporation which aims to provide the following:

e – Electronic

A – Application

M – Modification of

EN – ENtity

NOW THEREOF, the Commission hereby promulgates the following requirements and guidelines for the application for amendments under Section 15 and/ or 47 of the Revised Corporation Code, among others:

SECTION 1. COVERAGE AND APPLICABILITY

This Memorandum Circular shall cover applications within the competent jurisdiction of the Corporate and Partnership Registration Division (CPRD) of the Company Registration and Monitoring Department (CRMD) and the respective Extension Offices of the Commission.

A. Application Subject to Issuance of Digital Certificate

Application for Amendment of the Articles of Incorporation and/or By-Laws filed by Domestic Stock or Non-stock corporations concerning the following provisions or any combinations thereof:

• Articles of Incorporation:
  • Change in the Principal Office Address;
  • Increase or Decrease in the Number of the Board of Directors/Trustees;
  • Fiscal Year for One Person Corporations (OPCs); or
  • Deletion and/or Additional of New Provisions in the Existing Articles of Incorporation except those provisions on purposes, capitalization and reclassification of shares.
• By-Laws:
  • Date of Annual Meeting of the stockholders/members;
  • Fiscal Year.

B. Application Subject to Regular Processing through the eAMEND Portal:

• Amendment of Partnership
• Dissolution of Partnership;
• Amendment of Articles of Incorporation of a Domestic Corporation whether stock or non-stock other than those indicated in Section 1.A.a;
• Amendments of By-Laws of a Domestic Corporation whether stock or non-stock other than those indicated in Section 1.A.b;
• Application for Conversion of One Person Corporation (OPC) to Ordinary Stock Corporation (OSC) and vice versa;
• Application for Increase of Capital Stock for One Person Corporation via Cash;
• Combination of any of Section 1.A and Section 1.B;

All other applications not included in the list above shall be filed through the Official electronic mail platforms of the Commission and/or its Extension Offices.

SECTION 2. WHO ARE ALLOWED TO FILE

Only registered and active Partnership and Corporations may apply as stated in Section 1.

SECTION 3. DOCUMENTARY REQUIREMENTS FOR APPLICATIONS SUBJECT TO ISSUANCE OF DIGITAL CERTIFICATE

The applicant shall submit the following documents:

• System-generated/downloaded Cover Sheet for Amendment;
• System-generated/downloaded, signed and notarized or apostilled/authenticated Amendment Form
• Monitoring Clearance from the Compliance Monitoring Division (CMD) or from other Department/s of the Commission and proof of payment, if applicable;
  
  In lieu of the Monitoring Clearance from the Compliance Monitoring Division (CMD), applicant shall have the option to submit an Affidavit of Undertaking to submit CMD Monitoring Clearance and proof of payment; and
  Note: Affidavit of Undertaking is not applicable to corporations which are under supervision and monitoring with the Corporate Governance and Finance Department (CGFD) and Markets and Securities Regulation Department (MSRD).
• Certification and/or Favorable Endorsement of the appropriate government agency or from other Department/s of the Commission, if applicable.

Articles of Incorporation

Business Activity/Industry	Government Agency
Banks, banking and quasi-banking institutions, Non-stock Saving and Loan Associations (NSSLAs), pawnshops and other financial intermediaries	Bangko Sentral ng Pilipinas (BSP)
Preneed, insurance and trust companies	Insurance Commission (IC)

By-Laws:

Business Activity/Industry	Government Agency
Banks, banking institutions, building and loan association, Non-stock Savings and	Bangko Sentral ng Pilipinas (BSP)
Loan Associations (NSSLAs), pawnshops and other financial intermediaries
Preneed, insurance and trust companies	Insurance Commission (IC)
Public Utility	Government agency concerned
Educational institutions	Commission on Higher Education (CHED) Department of Education (DepEd) Technical Education and Skills Development Authority (TESDA)
Other activities governed by special laws	Other government agency concerned

SECTION 4. DOCUMENTARY REQUIREMENTS FOR APPLICATIONS SUBJECT TO REGULAR PROCESSING THROUGH THE eAMEND PORTAL:

Documentary requirements provided in the SEC’s latest Citizen’s Character as posted in the SEC Websites

SECTION 5. SUBMISSION OF HARD COPIES

The filing of the hard copies shall be filed and submitted to the appropriate addresses of SEC Offices chosen by the applicant as indicated in Annex “D”.

SECTION 6. APPROVAL AND ISSUANCE OF CERTIFICATE

• Digital Certification
  
  For applications subject to Section 1.A, a Digital Certificate of Filing of Amendments will automatically be issued through the eAMEND Portal upon payment of the amendment fees and shall be received by the applicant in their e-mail.
  
  The amendment documents submitted shall be subjected to post-evaluation/post-audit to determine completeness and consistency of the information provided in the system vis-à-vis the hard copies. If found compliant, the original copy of the Certificate of Filing of Amendment will be released.

• Original Certification
  
  For application subject to Section 1.B, the Original Certificate shall be issued only upon submission of the hard copies of application documents after the necessary payment has been made. No digital certification shall be issued through the eAMEND Portal.

Section 7. GROUND FOR PURGING AND CANCELLATION OF APPLICATION

• PURGING OF APPLICATION
  The application shall be automatically purged by the eAMEND Portal on the following grounds:
  • Failure TO COMPLETE the filling up the required details and TO UPLOAD the documentary requirement in the system within sixty (60) calendar days from the time of the creation of the account; or
  • Failure TO COMPLY with the Commission’s compliance order within thirty (30) calendar days from receipt of the system email compliance notification in cases of incomplete or non-compliant submission; or
  • Failure TO PAY the amendment fees within forty-five (45) calendar days from the date reflected in the PAF.

In any instance, the corporation may re-apply through the eAMEND portal.

• CANCELLATION OF APPLICATION
  The application may be cancelled motu proprio by the Commission on the following grounds:
  • Non-submission of three (3) original sets (in hard copies) to the appropriate SEC Office of the documentary requirements that have been approved in the portal system within thirty (30) calendar days from the date indicated in the digital copy of the Certificate of Amendment; and
  • Non-compliance of any lawful order of the Commission in instances of incomplete documentary requirements and/or inconsistent entries of the documents processed in the system with the submitted hard copies of the documentary requirements.

SECTION 8. INTER-AGENCY RECOGNITION OF THE AMENDMENT FORMS

The Amendment Form shall form part of the original Articles of Incorporation and/or By-laws of the corporation and any changes made to the Articles of Incorporation and/or By-laws, as provided in the Amendment Form and duly approved by the Commission, shall be considered official and legally valid when presented to other government agencies for any purpose.

SECTION 9. TRANSITION GUIDELINES

Pursuant to the implementation of the eAMEND starting on 23 February 2024, please be guided by the following procedures:

• All applications (such as on-going, unpaid and expired PAF) submitted through the electronic mail platform may opt to proceed with the email application or apply through the eAMEND portal;

• All applications that have been filed and paid prior to the implementation of the eAMEND Portal, shall proceed through the electronic mail platform for approval.

Beginning 23 February 2024, only system generated Amendment Form shall be acceptable for applications covered under Section 1.A. Any alternation, erasure, modification, or revision in the system-generated application under Section 1.A and the uploaded application under Section 1.B shall result in the automatic cancellation of the application after non compliance of any lawful order of the Commission.

SECTION 10. ANNOTATION ON THE ARTICLES OF PARTNERSHIP, ARTICLES OF INCORPORATION, and BY-LAWS

For purposes of effecting the implementation of the eAMEND Portal provided for and adopted in this Circular, an annotation to the Articles of Partnership, Articles of

Incorporation, the By-Laws, as the case may be, filed through the eAMEND Portal undertaken by the Corporation, shall be listed therein.

SECTION 11. APPLICABILITY OF OTHER RULES

The pertinent provisions of the Rules of Procedure of the Commission and the Rules of Court of the Philippines may, in the interest of expeditious dispensation of justice and whenever practicable, be applied by analogy or in suppletory character and effect.

In compliance with the Commission’s future issuances, specifically those focused on digitalization, the eAMEND Portal shall promptly incorporate any applicable requirements into its framework, provided they are relevant to the scope outlined in this Memorandum Circular.

SECTION 12. EFFECTIVITY

This Memorandum Circular shall take effect immediately upon its publication in newspaper of general circulation.

Circularizing the List of Qualified Personal Equity and Retirement Account (PERA) Eligible Products Duly Approved by the Securities and Exchange Commission 

Under Section 9 of Republic Act No. 9505, otherwise known as the Personal Equity and Retirement Account (PERA) Act of 2008 and its implementing Revenue Regulations (RR) No 17-2011 as amended, all income earned from the investments and reinvestments of the maximum amount allowed by the said Act is tax exempt provided the said PERA investment products have been duly approved by the concerned Regulatory Authority. 

Attached are the Lists of PERA Eligible Products duly approved by the Securities and Exchange Commission (SEC) as confirmed in its letter dated February 21, 2023, together with its detailed Annexes which are composed of the following: 

Annex A – Government Securities (e.g., Treasury Bills and Treasury Bonds)
Annex B – Securities issued by the Banko Sentral ng Pilipinas (BSP) Bills
Annex C – Corporate Bonds with an investible rating issued by an accredited Credit Rating Agency (e.g., Non-Bank Issued Corporate Securities- Commercial Papers and Enrolled Securities–Corporate Bonds)
Annex D – Corporate Bonds issued by Banks in compliance with the requirements of the BSP (e.g., LTNCTD, TIER2, Bank Bonds, Digital Bond)
Annex E – REIT Shares
Annex F – PSE Dividend Yield Index Securities (as of February 2023)
Annex G – PSEi constituents/shares that are compliant with the PERA requisites of being non-speculative, readily marketable with a track record of regular income payment to investors (as certified by PSE on 01 February 2023) 

The above lists are already posted and published on the SEC Website at https://www.sec.gov.ph on its PERA microsite. 

It is emphasized that only income earned from the investments and re-investments of PERA assets in duly accredited/approved PERA investment products shall be exempt from income taxes under Rule 11 of the Rules and Regulations Implementing the PERA Act 2008 and Section 9 of RR No. 17-2011, as amended. Moreover, income from investments and re-investments of PERA assets in government securities is likewise exempt from income taxes under the said provisions.  

(Originally published in GPP CPAs Website)

As we live in a modern world, where everything you see is digital. Everyone needs to be up to date and must conform to the new rules and regulations of the world. And as everything now can be seen online, be it pictures, videos, music, anything, all can be looked up on the internet. That is why the rights of individuals over their personal data and enforcing the responsibilities of entities who process them are being acknowledged in the Data Privacy Act of 2012.

From then an independent body was created under RA No. 10173 or the Data Privacy Act of 2012 which is the National Privacy Commission or NPC. It is mandated to monitor and ensure compliance of the country with international standards set for data protection. The Commission safeguards the fundamental human right of every individual to privacy, particularly information privacy while ensuring the free flow of information for innovation, growth, and national development. One of its functions is to develop, promulgate, review, or amend rules and regulations for the effective implementation of the DPA (Data Privacy Act).

The Registration Process is where a PIC or PIP shall create an account by signing up on the NPC’s official registration platform (NPCRS) where it shall provide details about the entity.

Step 1. Account Creation

a. Access the National Privacy Commission Registration System (NPCRS) at https://npcregistration.privacy.gov.ph

b. Upon signing up, the PIC or PIP shall input the name and contact details of the Data Protection Officers (DPO) together with a unique and dedicated *email address, specific to the position of DPO.

The DPO email address should be unique per PIC/PIP. The email address and Philippine Cellphone Number provided will be treated as the official contact channels.

Step 2. Registration Proper

a. Login using credentials.

b. Select the Type of DPO/DPS Registration

– During registration proper, the PIC or PIP shall:

1) Encode the organizational details; name and contact details of the Head of the Organization or Head of the Agency.

2) Encode Data Processing System(s) details; all Data Processing Systems of the PIC or PIP at the time of initial registration.

3) Encode the details of Compliance Officer(s) for Privacy if applicable.

4) Upload the prescribed supporting documents as provided under Section 11, NPC Circular No. 22-04.

5) Click “Save Registration”

c. For Notarization

1) Export DPO Form (PDF Format) automatically created during DPS Registration.

2) Print and sign the downloaded form (both DPO and Head of the Organization or Agency).

3) Have the completely filled out form notarized.

4) Scan, upload, and submit notarized DPO Form.

NOTE: The submission of the PIC or PIP shall undergo review and validation by the Commission. In case of any deficiency, the PIC or PIP shall be informed of the same and shall be given five (5) days to submit the necessary requirements.

Step 3. Download the Certificate of Registration and NPC Seal of Registration

– Once the submissions have been validated and considered complete, the PIC or PIP shall be informed that the Certificate of Registration together with the NPC Seal of Registration is available for download.

An application for registration filed by a PIC or PIP must be duly notarized and be accompanied by the following documents:

A. For government agencies:

Special or Office Order, or any similar document, designating or appointing the DPO of the PIC or PIP;

B. For domestic private entities:

1. For Corporations:

a) A duly notarized Secretary’s Certificate authorizing the appointment or designation of DPO, or any other document demonstrating the validity of the appointment or designation of the DPO signed by the Head of the Organization with an accompanying valid document conferring authority to the Head of Organization to designate or appoint persons to positions in the organization.

b) Securities and Exchange Commission (SEC) Certificate of Registration.

c) Certified true copy of the latest General Information Sheet.

d) Valid business permit.

2. For One Person Corporation (OPC)

a) A duly notarized Secretary’s Certificate authorizing the appointment or designation of DPO, or any other document that demonstrates the validity of the

appointment or designation of DPO signed by the sole director of the One Person Corporation.

b) SEC Certificate of Registration

c) Valid business permit.

3. For Partnerships

a) A duly notarized Partnership Resolution or Special Power of Attorney authorizing the appointment or designation of DPO, or any other document that demonstrates the validity of the appointment or designation

b) SEC Certificate of Registration.

c) Valid business permit.

4. Sole Proprietorships:

a) A duly notarized document appointing the DPO and signed by the sole proprietor, in case the same should elect to appoint or designate another person as DPO.

b) DTI Certificate of Registration.

c) Valid business permit.

C. For foreign private entities:

1. Authenticated copy or Apostille of Secretary’s Certificate authorizing the appointment or designation of DPO, or any other document that demonstrates the appointment or designation, with an English translation thereof if in a language other than English.

2. Authenticated copy or Apostille of the following documents, with an English translation thereof if in a language other than English, where applicable:

a) Latest General Information Sheet or any similar document.

b) Registration Certificate (Corporation, Partnership, Sole Proprietorship) or any similar document.

c) Valid business permit or any similar document.

Non-stock corporations or foundations in the Philippines may be formed for charitable, religious, educational, professional, cultural, fraternal, literary, scientific, social, civic service, or similar purposes, such as trade, industry, agricultural, and like chambers, or any combination thereof. 

Certain accredited non-stock, non-profit corporations in the Philippines are exempt from income tax on donations, grants, and gifts provided they are: 

1. Organized “exclusively” for one or more of the following purposes: religious, charitable, scientific, athletic, social welfare, cultural purposes, or for the rehabilitation of veterans and; 

2. No part of their net income or asset belongs to or inures to the benefit of any member, organizer, officer, or any specific person. 

To set up a non-stock non-profit corporation in the Philippines, you must first be registered with different government agencies. This article might be a help to your generous and big heart, having in mind the welfare of the less fortunate, or just want to start a non-stock non-profit corporation. 

Incorporators 

Incorporators shall be not less than five (5) in number but not more than fifteen (15) and the majority of whom are residents of the Philippines. Resident or non-resident aliens (foreigners) can be incorporators of a non-stock corporation, provided that the majority of the incorporators are residents of the Philippines. 

Basic requirements for registration with the Securities and Exchange Commission (SEC) 

The documentary requirements of the Securities and Exchange Commission (SEC) in the Philippines are as follows: 

1. Name Verification Slip 

2. Articles of Incorporation and By-laws; 

3. Joint affidavit of two incorporators to change the corporate name; 

4. List of members certified by the corporate secretary, unless already stated in the Articles of Incorporation; and 

5. List of the names of contributors or donors and the amounts contributed or donated certified by the treasurer 

There is no fixed amount of contribution required but only such reasonable amount as the incorporators and trustees may deem sufficient to enable the corporation to start operation, except in the case of foundations which must have a minimum contribution of at least One Million Pesos (P1,000,000.00). 

Additional requirements: 

1. Endorsement/clearance from other government agencies, if applicable; 

2. For Foundations: Notarized certificate of bank deposit of the contribution which shall not be less than P1,000,000.00 and statement of willingness to allow the Commission to conduct an audit; 

3. For Religious corporations: Refer to Sections 109-116 of the Code, and an affidavit of affirmation or verification by the chief priest, rabbi, minister, or presiding elder; 

4. For Federations: Certified list of member associations by the corporate secretary or president; 

5. For Condominium corporations/associations: Master Deed with the primary entry of the Register of Deeds and Certification that there is no other existing similar condominium association within the condominium project. 

Once an application was submitted, the SEC evaluator will review the initial drafts for seven (7) working days and will email that the application is preapproved. After signing and uploading the generated forms, SEC will send another email if the application was approved and qualified for payment and you will receive a payment assessment form that should be paid within 45 days. Once paid, the digital COI will be received, and the original documents together with proof of payment will be submitted to the SEC office within 60 days from the date of incorporation in order to claim the original Certificate of Incorporation. 

Registration with the BIR 

The non-stock non-profit corporation must be registered with the BIR within 30 days from the date of Incorporation and obtain a Tax Identification Number (TIN), registration of book of accounts, and official receipts or invoices. Certain registration fees and taxes will be paid.  

If you wish to be tax-exempt, non-stock non-profit corporations in the Philippines are required to secure a BIR Tax Exemption Ruling.  

Business Permits and Licenses 

Non-stock non-profit corporations must also be registered in the Local Government unit (LGU) where the principal office address of the company is located and secure the business permit, barangay clearance, sanitary permit, fire safety inspection certificate, and other clearances in order to go operational. Certain registration fees will be paid. 

Employer Registration 

Employers for non-stock non-profits are required to be registered with Social Security System, Philippine Health Insurance Corporation, and Home Development Mutual Fund for the benefit of their employees. 

A Corporation is a legal entity that is separate and distinct from its owner or incorporators. It has legal rights and obligations similar to an individual. It can enter into contracts, loans, hire employees, pay taxes, etc. The ownership of a corporation is divided into shares of stock.

A Corporation issues the stock to individuals or other businesses, who then become owners or stockholders, of the corporation.

Advantages of a Corporation

• The risk and liability is limited only to the corporation. Owners are not personally liable.
• It is easy to increase capital through the issuance of stocks to investors
• It can be passed on to different owners
• It can exist indefinitely
• It has the capacity to act independently similar to individual
• The management or decision-making is shared by the board of directors, not the sole individual.

Disadvantages of a Corporation

• More costly to set up than a sole proprietor
• It is mandated by more government reportorial requirements and laws
• Higher capital requirements and operating cost
• Higher tax rates

Where to Register a Corporation?

Here are the government agencies where the corporation are required to register in the Philippines:

• Securities and Exchange Commission (SEC)
• Local Government Units (LGU) where your business is located:
  • Barangay
  • Mayor’s Office
• Bureau of Internal Revenue (BIR)
• If you have employees, you need to register with the following:
  • Social Security System (SSS)
  • Philippine Health Insurance Corporation(PHIC)
  • Home Development Mutual Fund(HDMF)
  • Department of Labor and Employment(DOLE)

Who may form a Corporation?

Any person, partnership, association, or corporation, singly or jointly with others but not more than fifteen (15) in number, may organize a corporation for any lawful purpose or purposes. Provided, that natural persons who are licensed to practice a profession, and partnerships or associations organized for the purpose of practicing a profession, shall not be allowed to organize as a corporation unless otherwise provided under special laws. Incorporators who are natural persons must be of legal age.

Each incorporator of a stock corporation must own or be a subscriber to at least one (1) share of the capital stock.

How much is the Capitalization?

Stock corporations shall not be required to have a minimum capital stock, except as otherwise specifically provided by special law. However, some highly regulated companies or corporations are required to have a minimum capitalization based on the industry or equity of that certain entity.

Some domestic corporations with more than 40% foreign equity are required to have at least U$200,000.00 minimum paid-up capital if the registering corporation intends to operate as a Domestic Market Enterprise

Basic Documentary Requirements

• Name Verification Slip (may be secured online or at SEC Name Verification Unit)
• Articles of Incorporation (AI) and By-laws (BL)
• Treasurer’s Affidavit
• Joint affidavit of two incorporators to change the corporate name (not required if already stated in AI)

Additional Requirements

• Endorsement/clearance from other government agencies, if applicable
• Clearance from other Department of the Commission*
• For Corporations with more than 40% foreign equity: Application Form for registration under the Foreign Investments Act of 1991 (R.A. 7042, as amended)
• Endorsement/clearance from (a) Philippine Economic Zone Authority (PEZA) for the applicant under R.A. 7916, (b) Subic Bay Metropolitan Authority (SBMA) or Clark Development Corporation (CDC) for the applicant under R.A. 7227 and (c) Cagayan Economic Zone Authority (CEZA) for the applicant under R.A. 7922

References:
Republic Act 11232 or Act of Providing for the Revised Corporation Code
Republic Act No. 7042, as amended, also known as the Foreign Investment Act of 1991 (FIA)

Starting your business right is crucial to its future success. Starting right means everything should be legal and registered. Registering a business in the Philippines requires entrepreneurs to comply with various requirements provided by relevant government agencies, such as SEC and DTI. Depending on your business entity, the documents you provide may differ from one or the other.

Where to Register?

Here are the government agencies where the company or entity is required to register in the Philippines and the stages of registration.

Stage 1: Register the Company Name with the following government agencies:

• Securities and Exchange Commission the registrant is any of the following:
  1. Domestic Corporations(Stock or Non-Stock)
  2. Partnership
  3. One Person Corporation or
  4. Foreign Corporations

• Department of Trade and Industry for Sole Proprietorship

Stage 2: Obtain Business Permits from Local Government Unit (LGU) where the business address is located

Stage 3: Register and process registration with the Bureau of Internal Revenue

Stage 4: Register as an Employer with the relevant government agencies, such as:

1. Social Security System
2. Philippine Health Insurance Corporation
3. Home Development Mutual Fund
4. Department of Labor and Employment

What are the capital requirements?

• Securities and Exchange Commission

Under the Revised Corporation Code of the Philippines or Republic Act No. 11232, Section 12.

“Stock Corporations shall not be required to have a minimum capital stock, except as otherwise specifically provided by special law.”

However, some highly regulated companies or entities are required to have a minimum capitalization based on the industry or equity of that certain entity.

There is no minimum capital requirement to form a Partnership. Partners can mutually decide the capitalization to start a partnership business unless otherwise, the partnership has foreign participation.

• Department of Trade and Industry

The Philippine Law does not recognize a Sole Proprietorship as an entity separate from its owner, there is no formal capitalization of a sole proprietorship. The assets of the owner and the assets of the sole proprietorship are one and the same which is why sole proprietors are limited by the amount of capital available.

Where to start the registration process?

For Corporations (stock or non-stock), partnerships, One Person Corporations and Foreign Corporations, the registration process will start with the Securities and Exchange Commission (SEC) using the SEC Electronic Simplified Processing of Application for Registration of Company (eSPARC).

The system allows the applicant or his duly appointed representative to submit the proposed company name and input details of the articles of incorporation for review of the Commission.

The Regular Processing of the ESPARC application form is grouped into six (6) steps. Each step is composed of sections. The applicant must be able to complete all six steps to enable him to submit his application.

1. Name Verification
2. Company Details
3. Capital Structure
4. Company Officers
5. File Uploading
6. Application Review

For Sole Proprietorship with Business Name, the registration process will start on the online platform of the Department of Trade and Industry (DTI), the Business Name Registration System (BNRS) wherein it is the responsibility of the proprietor to ensure that the proposed Business Name conforms to the terms and conditions set forth under Republic Act. 3883 or otherwise known as the Business Name Law.

A Business Name (BN) shall refer to any name that is different from the true name of an individual which is used or signed in connection with her/his business on any written or printed receipts, including receipts for business taxes, duties, and fees and withdrawal or delivery receipts; any written or printed evidence of any agreement or business transaction; and any sign or billboard conspicuously exhibited in plain view in, or at the place of her/his business or elsewhere, announcing his /her business.

One indicator that a business is in good financial standing is it has excessive retained earnings or accumulated profits. With this, users of the financial statements, for example, investors can decide whether to put up additional funds to expand business operations or banks may approve loan applications. The question is, when do you consider retained earnings excessive and what is the regulatory compliance associated with it?

Retained Earnings; definition and classification

Retained earnings in simplest words, is the excess profit accumulated and generated from business operations net of dividend payment to shareholders. It represents a portion of your business equity that may be used for investment in Research and Development, equipment, or business expansion for example. Retained Earnings may be classified further into two: Unrestricted and Restricted. Restricted retained earnings are those that a business may not distribute as dividends such as appropriation of retained earnings for a loan (as required by loan covenant) while unrestricted retained earnings are those that are available for dividend distribution.

When Retained Earnings Is Excessive and Its Exemption?

Retained Earnings are considered excessive if unrestricted retained earnings are more than the 100% paid-up capital of your company.

If your Philippine Company has excess retained earnings, the financial statements must include the following information in accordance with Section 42 of the Revised Corporation Code (RA 11232):

“Stock corporations are prohibited from retaining surplus profits in excess of one hundred (100%) percent of their paid-in capital stock, except:

Regulatory Compliance Requirement So, unless covered by the limitations listed above, the Securities and Exchange Commission (SEC) in the Philippines requires that the Audited Financial Statements include a Statement of Reconciliation of Retained Earnings Available for Dividend Declaration. The template for such a statement provided by SEC MC No.11-2008 is attached to this article for reference.

It is a key takeaway that the amount of retained earnings of the Company for the reconciliation statement should be based on Retained Earnings of “stand-alone” or Separate Financial Statements. So, if your Company is a Philippines Subsidiary of a Parent Corporation, the amount of retained earnings for such reconciliation is of the PH Subsidiary Company. This is because retained earnings based on consolidated financial statements include a surplus of subsidiaries, which are not yet actual earnings of the parent unless distributed in the form of dividends by the subsidiaries. However, in accordance with Revised SRC Rule 68, the Parent company’s retained earnings reconciliation must be submitted along with the consolidated financial statements.

In reference with PAS 1, the notes to financial statements of Corporations shall disclose information that is relevant to an understanding of the financial statements which includes any provisions indicating retention for expansion projects must be definite and approved by the Board of Directors. The following disclosures are relevant pursuant to PAS 1 to provide an understanding on the impact of the retention of earnings on the financial statements:

(i) Details of the expansion (e.g., description of the project, timeline) to render the project definite;

(ii) The date of the approval of the project by the Board of Directors

Noncompliance of such regulatory requirements will be subjected to appropriate sanction of the SEC upon review of the audited financial statements as per SEC MC 6-2005: “Failure to Comply with any of the requirements of SRC Rule 68 or Incomplete Disclosures in the Financial Statements”

• First Offense: P 25,000.00 + P 500.00 per day of violation
• Second Offense: P 50,000.00 + P 1,000.00 per day of violation
• Third Offense: P 100,000.00 + P 1,000.00 per day of violation

Tax Implications Prior to CREATE LAW, improper accumulated earnings tax (IAET) is at 10%. IAET was imposed on the excessive accumulated taxable income of a corporation founded for the intention of avoiding income tax on its shareholders by allowing the corporation’s revenues and profits to accrue rather than distributing them to the shareholders as dividends. Its implementation was intended to discourage or penalize firms for improperly accumulated earnings in order to avoid paying dividend taxes that would have been required had the earnings been distributed as dividends to shareholders.

The 10% IAET has been REPEALED with the implementation of CREATE LAW, and there is no retroactivity clause for 10% IAET. According to RR No. 5-2021, the repeal of IAET applies to the entire tax year for all fiscal years/taxable years ending after the effective date of CREATE LAW. Because CREATE LAW went into effect on April 11, 2021, your financial statements of prior to 2021 that contain improperly accumulated earnings over the “reasonable needs” of the business may still be subject to IAET evaluation during tax audit.

At the end of the day, knowing that your firm is in conformity with local regulations in the Philippines can help you save money on penalties and avoid having to deal with future tax or regulatory evaluations. So, if you’re an accountant, you should check your retained earnings before year-end reporting to see if there’s any reporting or disclosure required.

By: Farida B. Honrado, CPA

The Securities and Exchange Commission (SEC) has extended the deadline for applications for amnesty for late and non-filing of annual financial statements (AFS), general information sheets (GIS), as well as non-compliance with SEC Memorandum Circular No. 28, series of 2020 (Requirement for Corporations, Partnerships, Associations, and Individuals to Create and/or Designate E-mail Account Address and Cellphone Number for Transactions with the Commission) (MC28). 

Eligible companies have until June 30 to finish their amnesty applications and we encourage all eligible companies to not miss the chance to avail lower fines and penalties.  

Below are the reduced rates for non-compliant and suspended/revoked corporations: 

To check who is eligible to avail the amnesty program, go to http://amnesty.sec.gov.ph/ and input your company name or SEC registration number. 

This extension was granted through SEC Memorandum Circular No. 6, Series of 2023, entitled “Amendment of SEC Memorandum Circular No. 2, Series of 2023, and Extending the Deadline of Amnesty Applications” (SECMC No. 6-2023 or the “Circular”) which is issued last April 28, 2023, and took effect immediately following its publication in newspapers nationwide. 

The deadline for amnesty applications was extended for another two months, until June 30 from the previous deadline when the amnesty program was initially launched in March 2023. Companies availing of the amnesty will now be given 90 calendar days, instead of 45 days, from the date of payment of the fixed amnesty amount to submit and comply with the complete and correct set of requirements for the amnesty application. 

The amnesty program is part of the Commission’s efforts to encourage its supervised entities to comply with their reportorial requirements under Republic Act No. 11232, or the Revised Corporation Code of the Philippines which was initially launched last March for non-compliant corporations or for those whose certificates of registration have been suspended or revoked. 

The objective is to review and clean up the submissions of all regulated entities, enhance and organize the SEC’s database, encourage compliance, and deter violations of laws and current regulations. This will give all parties concerned more reasons to avail of the amnesty while there is still time and not to wait for the looming deadline. 

After the extended June 30 deadline, the SEC will implement an updated scale of fines and penalties for the late filing and non-filing of the covered reportorial requirements effectively.  

The content is for general information purposes only and should not be used as a substitute for specific advice. 

 
References: 

SEC Memorandum Circular No. 2, Series of 2023 

SEC Memorandum Circular No. 6, Series of 2023