THE Securities and Exchange Commission (SEC) is considering an increase in the fines and penalties imposed on corporations for the late and non-filing of their annual financial statements and general information sheet, it said in a media release on Thursday.
In its proposed guidelines, the commission will raise penalties by 20% from the base penalty per offense. Penalties will be imposed on a per report and per year basis, with a monthly fine added on top of the base fines for continued violations until the requirements are submitted by the company.
The SEC said penalties for corporations that filed their reportorial requirement late could range from P5,000 to P27,000 with an additional fine of P500 up to P1,000 per month depending on their retained earnings.
Penalties for non-filing of reports could range from P10,000 to P54,000. A monthly fine will also be imposed ranging from P500 to P1,000.
For foreign companies, a fine of up to P54,000 and P45,000 may be imposed on stock and non-stock corporations for late filings, respectively. For non-filing of financial statements, the corresponding fine could go as high as P90,000 and P45,000.
“The scale of penalties will be based on the retained earnings for domestic stock corporations, fund balance for domestic non-stock corporations, and accumulated income for foreign stock corporations,” the SEC said.
Additionally, companies may also be fined P20,000 for the violation of Memorandum Circular No. 2, series of 2023.
“Memorandum CircularNo. 2, s. 2023, provided regulated entities opportunity to settle their fines and penalties at a reduced rate to encourage compliance with reportorial requirements,” the SEC added.
The regulator may also declare a company under delinquent status after three consecutive failures to submit its requirements or intermittently after five years.
“A fourth offense may also constitute a revocation of a corporation’s registration if it has been given reasonable notice regarding its delinquent status,” it said. — Adrian H. Halili