SEC ZERO: Revolutionizing Philippine company registration

In line with Republic Act No. 11032 or the Ease of Doing Business and Efficient Government Service Delivery Act of 2018, the Securities and Exchange Commission (SEC) took another bold step in digital transformation with the launch of the SEC Zuper Easy Registration Online (SEC ZERO) on July 17, 2024, which was subsequently made mandatory under SEC Memorandum Circular No. 3, Series of 2025.

This initiative makes company registration in the Philippines completely paperless, digital, and available 24/7. SEC ZERO is a game-changer in ease of doing business as it modernizes one of the most fundamental processes in corporate law.

SCOPE, FEATURES, PROCESS
SEC ZERO currently applies to all corporations, including domestic corporations, foreign corporations, and One Person Corporations. Other company types like financing and lending companies are currently covered under regular processing for incorporation but are expected to transition fully soon.

The core features of SEC ZERO include the use of an Electronic SEC Universal Registration Environment (eSECURE) account for all signatories and the online authentication of signatures through the SEC Electronic Submission Authentication Portal (eSAP). The incorporation process starts with each signatory creating a verified eSECURE account, then paying the verification fee online, submitting two government-issued IDs, and completing a live photo capture using the in-app camera.

Once the accounts are set up, the applicant inputs the eSECURE IDs of all signatories into the application form within the SEC’s Electronic Simplified Processing of Application for Registration of Company (eSPARC) platform. The system then generates draft documents such as the Articles of Incorporation, By-Laws, and Certificate of Authentication. After an initial review, the SEC issues its pre-approval and instructs the signatories to individually authenticate their signatures on the drafts electronically via eSAP.

Following successful authentication, the applicant proceeds to pay the filing fees. Once the application passes post-audit, the SEC issues a digitally authenticated Certificate of Incorporation, which holds the same legal validity as a traditional hard-copy certificate.

BENEFITS
The shift to SEC ZERO offers several benefits that improve the ease of doing business. Entrepreneurs can register companies anytime and anywhere, removing the need for in-person visits to SEC offices and cutting down the long queues often associated with traditional registration. This is particularly beneficial to foreign applicants since they need not personally appear or place their wet signatures on documents, plus it does away with the tedious and costly process of authenticating the documents executed abroad.

Processing times are shortened, as the elimination of notarization, courier services, and physical submissions streamlines the entire workflow. Applicants are no longer required to prepare their own Articles of Incorporation and By-Laws, as SEC ZERO automatically generates draft versions. This not only reduces the need for legal or professional assistance in the initial stages, but also ensures that the drafts follow SEC-prescribed formats, minimizing errors and expediting the approval process.

The integration of identity verification through eSECURE and document authentication via eSAP likewise adds a layer of security, helping reduce the risk of fraud and falsification. Taken together, these gains highlight SEC ZERO’s potential not only to modernize registration but also to foster a more dynamic business climate in the Philippines.

ISSUES
Although SEC ZERO marks a significant step forward, certain challenges persist.

Digital inclusion remains a pressing issue, as applicants in remote areas may struggle with limited internet access or lack of digital resources.

Those accustomed to traditional methods may also face a learning curve in adapting to the new system. The system poses difficulties for less tech-savvy individuals, who may encounter problems such as incorrect verification codes, mismatched information, invalid government IDs, or exceeding the three-attempt limit during the verification process.

For instance, some applicants encounter issues when the names on their government-issued IDs do not exactly match the details in their eSECURE accounts. Even if the ID itself is valid, the system may reject it due to discrepancies such as the use of a maiden name, middle initial variations, or differences in suffixes. These mismatches, though minor, can prevent successful verification and delay the registration process.

Another challenge is that applicants may not always possess the two valid government-issued IDs required by eSECURE for verification, making it difficult for some individuals, especially those with limited identification documents, to complete the process.

Finally, system reliability and cybersecurity risks also demand careful oversight, especially as personal data is increasingly digitized.

MILESTONE
SEC ZERO marks a milestone in Philippine corporate law, ushering in a fully digital era for company registration. By streamlining incorporation processes, the SEC positions the Philippines closer to global best practices in ease of doing business. While challenges in access must be addressed, the benefits of SEC ZERO point to a future where incorporation is not just faster but smarter, safer, and more inclusive.

Sabrina Marie E. De Guia is an associate of ACCRALAW’s Corporate and Special Projects Department.

sedeguia @accralaw.com

8830-8000