Regulator Securities and Exchange Commission (SEC) is bent on having amendments to the Corporation Code of the Philippines passed by Congress before the May 2016 elections.
The revised corporate law seeks to promote investments in line with international best standards and practices an on a par with the Association of Southeast Asian Nations (Asean).
SEC Chairperson Teresita Herbosa said the commission is gathering comments from stakeholders on the proposed amendments and expects the Senate Committee on Trade, Commerce and Entrepreneurship to complete its report on the bill before the year ends.
“Senator [Paolo Benigno IV] Bam Aquino is very active. He plans to finish… the committee report by the end of the year. He is really helpful to us and he understands,” Herbosa said.
Senate Bill 2194, introduced by Sen. Juan Edgardo Angara, seeks to revise the 50-year limit on corporate life to perpetuity for “a more long-term mindset that will foster sustainability…”
The amendment allows corporations to apply for an extension three years before the corporate franchise expires. All firms will then be required to signify the intent to continue operating in 25-years intervals.
The proposed revisions remove the minimum number of incorporators so that “smaller businesses may reap the advantages of the corporate vehicle with as few as two incorporators.”
One-person corporations will also be allowed, so that “single proprietors may protect their personal properties,” Angara said.
The name verification process will be simplified to improve the ease of doing business through “distinguishability” as a criterion through electronic submissions and notices with the SEC having the authority to develop new systems such as online registration.
The amendments also clarify the procedures for dissolution, as well as give non-compliant corporations a grace period for compliance.
“In lieu of immediate revocation, action on matters brought by delinquent corporations to the SEC shall be withheld until full compliance is made,” Angara said.
Amended provisions on corporate governance will improve the rights of stockholders, deter corporate abuses and fraud, as well as graft and corrupt practices.
A solution to the problem of perpetual holdovers gives the SEC authority to order a stockholders’ meeting if the company fails to do so.