The Securities and Exchange Commission (SEC) said it has suspended until Dec. 31, 2026 the imposition of monthly penalties in the late or non-filing of reportorial requirements, as it seeks to reduce transaction costs and promote the ease of doing business.
The Commission En Banc, in a meeting May 5, approved the suspension of penalties imposed for every month of delay for the late or nor-filing of reportorial requirements, as provided under SEC Memorandum Circular No. 6, series of 2024 (MC 6).
MC 6 provides the scale of fines and penalties for the late or non-filing of annual financial statements (AFS) and general information sheets (GIS) submitted by corporations registered with the Commission.
Under the memorandum circular, one person corporations (OPCs) and domestic stock/non-stock corporations with retained earnings/fund balance/equity incur an additional P1,000 for every month of continuing violation for the late or non-filing of their GIS or AFS. This is on top of the base penalty imposed based on a corporation’s retained earnings/fund balance/equity.
For those with negative retained earnings, the additional penalty for every month of delay is P500.
The suspension is directed solely at the monthly penalty component, which compounds for every month a filing remains overdue, capped at 12 months, the SEC clarified. “The base fine for late or non-filing of reports will continue to be imposed in accordance with the current schedule.”
“As we celebrate the Ease of Doing Business month this May, the SEC reaffirms its commitment to foster a robust and responsive business environment,” SEC chairperson Francis Lim said in a statement May 14.
“By suspending the compounding monthly penalties, we are providing corporations an opportunity to get back their good standing without the burden of mounting transaction costs, as part of our goal of pushing corporations toward full compliance and sustainable growth,” he added.
The suspension will apply to corporations with pending monitoring applications. Corporations that have received final assessments but have not yet settled payment will be issued updated assessments excluding the per month of delay components. ||
