MANILA, Philippines — The Securities and Exchange Commission (SEC) aims to further streamline the requirements and procedures for amending a corporation’s articles of incorporation and by-laws to ensure consistency and timeliness in the processing of such transactions.
The commission has released for public comment new rules on the amendment process for articles of incorporation of corporations through its online portal.
Through the proposed guidelines, the SEC aims to strictly enforce the maximum processing times prescribed under the Ease of Doing Business and Efficient Government Service Delivery Act of 2018 (EODB Act).
The proposed guidelines will enable applicants to submit an affidavit of undertaking instead of a monitoring clearance and clearly categorize the different types of amendment applications as either complex or highly technical transactions.
It also imposes graduated penalties for late or non-submission of the documentary requirements, among others.
“The proposed rules provide clear guidance on the filing of amendments through our online portal, thereby streamlining and improving the efficiency of our services,” SEC chairperson Francis Lim said.
“At the same time, the penalties will be put in place to promote transparency, accountability, and strict compliance with the documentary requirements,” he said.
The SEC is accepting comments on the draft memorandum circular until Nov. 17.
In July 2024, the SEC launched the Electronic Application for Modification of Entity Data (eAMEND) portal, which facilitates the acceptance, processing, and approval of payment for amendment applications of corporations.
Applications through the portal are currently classified into two options: simple processing and regular processing.
Amendment applications that undergo simple processing are eligible to receive the digital certificate of their amended articles of incorporation upon initial system approval, while those under regular processing will be issued only after review and approval by the SEC.
Under the proposed guidelines, applications that will undergo simple processing through eAMEND will be considered complex transactions.
The SEC said that, under the EODB Act, complex transactions that necessitate evaluation by a relevant government employee to resolve complicated issues must be processed within seven working days.
Transactions under simple processing will include changes to corporate name, primary/secondary purpose, and principal office address; increases/decreases in the number of directors/trustees; term of existence; and provisions for tax exemption for non-stock corporations, among others.
Meanwhile, applications under regular processing will be classified as highly technical transactions, or those that involve technical knowledge, specialized skills, or training in the processing and/or evaluation of such transactions.
The SEC said that highly technical transactions must be processed within 21 working days under the EODB Act.
Transactions under regular processing will include applications for new by-laws, amendments to by-laws involving five or more provisions, and dissolution through the shortening of corporate terms, amendments to articles of partnership, dissolution of partnerships, and all types of corporate conversions.
