Enthusiasm among entrepreneurial Filipinos rose earlier in the year when Republic Act No. 11232, also known as the Revised Corporation Code of the Philippines, was enacted on February 20, 2019.
The legislation details the rules and regulations that govern how corporations can be established and operated in the Philippines.
Here is part 2 of our overview of the key provisions implemented through the Revised Corporation Code. Read Part 1 here(link to Part 1-April 2019):
The single stockholder of a One Person Corporation must appoint personnel for key positions in the company
For a One Person Corporation (OPC), the sole stockholder is considered the sole director and president of the OPC. It is the stockholder’s responsibility to appoint a treasurer, corporate secretary, and other relevant positions within 15 days from the issuance of the certificate of corporation.
The single stockholder is allowed to appoint himself or herself as the corporation treasurer by approval of the Securities and Exchange Commission (SEC). In this case, the corporation may be required by the SEC to give a bond every two (2) years. However, the position of corporate secretary must be appointed to another person.
The SEC must be notified within five days of filling all necessary positions.
The duration allowed for non-use of corporate charter and continuous inoperation has been extended
In the original Corporation Code, a corporation that has not operated in two (2) years from the date of its incorporation shall be deemed dissolved. Under the Revised Code, the minimum period shall be five (5) years.
A corporation that commenced operation upon incorporation but has been idle for a minimum of five consecutive years shall be given notice of the fact and then placed under delinquent status. This may be lifted if the corporation resumes operations within a two-year grace period. The business must also submit requirements as prescribed by the SEC. The corporation’s certificate of corporation will be revoked if the above conditions are not fulfilled.
Stockholders are allowed to use remote communication to attend meetings
The Revised Corporation Code enables company stockholders to use modern telecommunications technology to attend and participate in meetings. Through teleconferencing, video conferencing, and other modern alternative modes of communication, they are allowed to elect directors through vote given in absentia.
Securities and Exchange Commission to develop an electronic filing and monitoring system
The Revised Code mandates that the SEC develop and implement an electronic filing and monitoring system. The provision intends to streamline government procedures by enabling and automating online company registration, licensing of foreign corporations, amendments of the articles of incorporation, information exchange between the corporation and the government, and other corporate applications.
This electronic filing system is in line with the Philippine government’s drive to curtail red tape that hinders the ease of doing business in the country.
If you need further assistance to understand and interpret these new rules and regulations for your business, reach out to Duran & Duran-Schulze Law. Consult with our experts at (+632) 478 5826 or send your inquiries via email at [email protected].