Amendments to Corporate Code approved by Senate on 3rd reading
By Camille A. Aguinaldo
THE Senate on Tuesday passed on third and final reading the bill amending the 38-year-old Batas Pambansa Bilang 68 or the Corporation Code of the Philippines.
Senate Bill No. 1280 introduces the “one-person corporation” to address problems in filling up the current requirement of at least five stockholders for a corporation. It also grants perpetual term as the default option for corporations.
The Corporation Code of the Philippines provides the rules and regulations in the establishment and operation of stock and non-stock corporations in the country.
The bill was approved with 20 affirmative votes, zero negative vote, and no abstention. The proposed measure was authored and sponsored by Senate Minority Leader Franklin M. Drilon and co-sponsored by Senate Majority Leader Juan Miguel F. Zubiri.
In a statement, Mr. Drilon said the measure will establish a more business- and investor-friendly environment in the country.
“We must provide an environment conducive not just to big businesses, but make the corporate vehicle an appealing prospect for start-ups and entrepreneurs,” he said.
Mr. Drilon also said the bill’s provisions would ensure ease of doing business, prioritize corporate and stockholder protection, instill corporate and civic responsibility, and strengthen the country’s regulatory corporate framework.
The “one-person corporation” amendment to the bill prevents the current practice of certain investors to name even their household members and hired help as incorporators to comply with the present rule.
The measure also adopts an electronic filing system for reportorial requirements and simplifies the current name verification system to allow seamless automation of name registration for corporations.
It also permits the use of alternative modes of communication in corporate meetings, so that stockholders and directors can attend through remote communication and in some cases, can cast votes “in absentia.”
Mr. Drilon added the proposed amendments to the Corporation Code will make the country a “viable investment destination.”
“If we are to keep up with the rest of the financial world, we need to codify best international corporate practices and address the archaic bottlenecks in the areas of starting a business and protecting minority investors,” he said.