Submit or face suspension SEC reminds businesses to comply with reports

CEBU, Philippines – Companies should consistently comply reportorial requirements to avoid their certificates of registration from being revoked or suspended, the Securities and Exchange Commission said.

In an interview yesterday with The FREEMAN, SEC-Cebu Director Lindeza Gavino said financial statement and the general information sheet are two important reports that companies should file with the agency.

SEC issues orders of revocation or suspension to corporations that do not file reports.

Gavino explained the non-filing of these reportorial requirements for five consecutive years is the key reason for SEC to issue an order of revocation or suspension.

Earlier reports said that the SEC has decided to just issue an order of suspension -- instead of revocation -- against delinquent firms in an aim to provide a more favorable environment for Philippine companies.

According to SEC, it allows delinquent corporations to file petitions, provided that they file the required reports and pay the necessary penalties. Gavino noted the revenue that the agency gets from filing fees and penalties is an offshoot of its regulatory function.

It was in March this year when the corporate regulator released list of corporations with approved petition to set aside order of revocation.

Gavino said there were already Cebu-based corporations issued with the order but she could not specify the number, saying it’s the national office that issues the order.

The law gives SEC the authority to suspend or revoke the certificate of registration of non-compliant corporations after proper notice and hearing.

The Corporation Code of the Philippines, particularly Section 141, states that every corporation shall submit an annual report of its operations and a financial statement of its assets and liabilities to the SEC. Section 26 also says that every company is required to submit its report of election of directors, trustees and officers.

The SEC reiterates that the filing of reports is key to maintain disclosure, transparency and accountability among companies.

Gavino explained that disclosure allows investors, creditors and the public in general to know about a company’s information particularly its financial condition.

Annual company filing is important to ensure that information is made available to investors especially those of listed firms whose disclosures should be timely.

On another matter, the official could not yet confirm if the plan to put up an SEC satellite office in Cebu would push through this year. The plan was already announced by SEC Chairperson Teresita Herbosa.

But she believes the expansion of operations is one of the agency’s thrusts.

If pushed through, she said the satellite office would probably be located in a mall.

Currently, only an extension office of SEC is existing in Cebu.