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SEC reportorial requirements: What are the penalties for non-compliance?

SEC reportorial requirements: What are the penalties for non-compliance?

All companies registered with the Securities and Exchange Commission (SEC) are bound by law to comply with a set of reportorial requirements.

This blog post<link to Month 26, Blog 3 – Reportorial Requirements> details the requirements applicable to corporations with primary licenses, corporations with secondary licenses, and other corporate entities required by the SEC to comply on a regular or special basis.

The table below details the fines that apply to domestic stock corporations with primary license that fail to comply:

Document

 Conditions Violation Penalties

(Amounts in Php)
General Information Sheet

·  Four (4) copies required

·  Due within 30 days from date of the annual stockholders’ or members meeting

 Late filing First offense:

Based on the “Total Assets” indicated in the latest Financial statements:

·    Up to Php 100,000: 500

·    100,001 to 500,000: 1,500

·    500,001 to 5,000,000: 2,500

·    5,000,001 to 10,000,000: 3,500

·    Above 10,000,000: 5,000

 
Second offense:

Total fine, plus 10% of the total fines computed
Third offense:

Total fine, plus 15% of the total fines computed
Non-filing First offense:

Based on the “Total Assets” indicated in the latest Financial statements:

·    Up to Php 100,000: 1,000

·    100,001 to 500,000: 3,000

·    500,001 to 5,000,000: 5,000

·    5,000,001 to 10,000,000: 7,000

·    Above 10,000,000: 10,000

 
Second offense:

Total fine, plus 10% of the total fines computed
Third offense:

Total fine, plus 15% of the total fines computed
Audited Financial Statements ·  Four (4) copies required

·  Due within 120 calendar days after the end of the fiscal year, as indicated in the Financial Statements

·  Must be stamped “RECEIVED” by the BIR

 Late filing (Same as above)
Non-filing (Same as above)
Material deficiency First offense:

Based on the “Total Assets” indicated in the latest Financial statements:

·    Up to Php 100,000: 500

·    100,001 to 500,000: 1,000

·    500,001 to 5,000,000: 2,000

·    5,000,001 to 10,000,000: 3,000

·    Above 10,000,000: 4,000

 
Second offense:

Based on the “Total Assets” indicated in the latest Financial statements:

·    Up to Php 100,000: 1,000

·    100,001 to 500,000: 2,000

·    500,001 to 5,000,000: 4,000

·    5,000,001 to 10,000,000: 6,000

·    Above 10,000,000: 8,000
Third offense:

Based on the “Total Assets” indicated in the latest Financial statements:

·    Up to Php 100,000: 2,000

·    100,001 to 500,000: 4,000

·    500,001 to 5,000,000: 8,000

·    5,000,001 to 10,000,000: 12,000

·    Above 10,000,000: 16,000
Material misstatement or misrepresentation An amount based on the above scale or 1/10 of 1% of the amount of misstatement, whichever is higher
An amount based on the above scale or 2/10 of 1% of the amount of misstatement, whichever is higher
An amount based on the above scale or 4/10 of 1% of the amount of misstatement, whichever is higher
Other non-compliance with the requirements of Securities Regulation Code (SRC) Rule 68 First offense:

Based on the “Total Assets” indicated in the latest Financial statements:

·    Up to Php 100,000: 200

·    100,001 to 500,000: 300

·    500,001 to 5,000,000: 500

·    5,000,001 to 10,000,000: 1,000

·    Above 10,000,000: 2,000

 
Second offense:

Based on the “Total Assets” indicated in the latest Financial statements:

·    Up to Php 100,000: 400

·    100,001 to 500,000: 600

·    500,001 to 5,000,000: 1,000

·    5,000,001 to 10,000,000: 2,000

·    Above 10,000,000: 4,000

Third offense:

Based on the “Total Assets” indicated in the latest Financial statements:

·    Up to Php 100,000: 800

·    100,001 to 500,000: 1,200

·    500,001 to 5,000,000: 2,000

·    5,000,001 to 10,000,000: 4,000

·    Above 10,000,000: 8,000

For more details on the tiered penalties based on the company’s Total Assets, refer to this comprehensive Scale of Fines.

This official SEC reference material includes detailed breakdowns for other primary-licensed company types such as non-stock corporations, foreign corporations, and foundations, as well as registered corporations with secondary license.

 

Other requirements

 

The Corporation Code of the Philippines (Batas Pambansa Bilang 68) adds stipulations safeguarding the proper conduct of corporate activity in the Philippines. Based on this legislation, other violations that apply to domestic stock corporations include:

  • Changing the corporate name without amending the Articles of Incorporation
  • Changing the corporate purpose without amending the Articles of Incorporation
  • Changing the principal office address without amending the Articles of Incorporation
  • Increasing or decreasing the authorized capital stock without amending the Articles of Incorporation
  • Electing the company president as its secretary and/or treasurer
  • Electing a president who is not a Member of the Board or a stockholder
  • Electing a secretary who is not a Filipino citizen or a resident of the Philippines

Also refer to the SEC’s consolidated Scale of Fines for the complete list of other requirements based on the Corporation Code.

Need help with your company’s reportorial requirements? Contact FilePino and gain a reliable partner for your legal obligations so you focus on running your business. Inquire here or call +1.806.553.6552 (USA) or +63.917.892.2337 (Philippines).

References:

https://elibrary.judiciary.gov.ph/thebookshelf/showdocs/10/46410

https://www.sec.gov.ph/microfinance-ngo-regulatory-council/forms-2/#gsc.tab=0