THE Securities and Exchange Commission (SEC) is soliciting comment on implementing rules for amendments to the Corporation Code, which was overhauled recently to allow fewer incorporators to found companies, as well as the registration of foreign corporations.
The draft memorandum circular on the number and qualifications of incorporators was published Tuesday on the SEC website, with comment accepted from stakeholders until July 17.
The new rules allow for domestic corporation to be formed by at least two but not more than 15 persons. They also permit the registration of One-Person Corporations, which will be covered by separate guidelines.
The Corporation Code of the Philippines, or Batas Pambansa Blg. 68, previously required a minimum of five and a maximum of 15 natural persons to form a corporation.
Incorporators are required to own at least one share of a company’s capital stock, and may be natural persons, SEC-registered partnerships, SEC-registered domestic corporations or associations in good standing, or foreign corporations.
“The inclusion of foreign nationals in the articles of incorporation shall be subject to the applicable constitutional, statutory, and regulatory restrictions, as well as conditions, with respect to foreign participation in certain investment areas or activities,” it said in the draft guidelines.
Foreign corporations will be asked to include in their application a board resolution authenticated by a Philippine Consulate indicating the approval of the foreign corporation’s investment in the company.
For SEC-registered partnerships, the SEC wants to require applicants to submit a Partners’ Affidavit on top of the application for registration.
Domestic corporations or associations will also be required to secure the approval of the majority of the board and ratified by two-thirds of the stockholders to incorporate.
For banks and quasi-bank institutions, pre-need, insurance and trust companies, nonstock savings and loan associations, pawnshops and other financial intermediaries, the SEC draft rules require their articles of incorporation to be “accompanied by a favorable recommendation of the appropriate government agency to the effect that the Articles of Incorporation are in accordance with law.”
The release of the proposed guidelines follow the passage of the Revised Corporation Code or Republic Act No. 11232 in February. It sought to allow one-person corporations and perpetual corporate terms, among other features.
The SEC said outstanding applications for registration compliant with the new provisions of the Revised Corporation Code will be processed manually by the Commission’s Company Registration and Monitoring Department and Extension Offices. — Denise A. Valdez