Grant of Amnesty for Non-Filing and Late Filing of the GIS and AFS, and Non-Compliance with Memorandum Circular No. 28, S. 2020

March 16, 2023 SEC MEMORANDUM CIRCULAR NO. 2, S. 2023 TO : All Concerned SUBJECT : Grant of Amnesty for Non-Filing and Late Filing of the General Information Sheet (GIS) and Annual Financial Statement (AFS), and Non-Compliance with Memorandum Circular No.28, S. 2020 WHEREAS, Section 179 (o) and (p) of Republic Act (RA) No. 11232, otherwise known as the "Revised Corporation Code of the Philippines" (RCC), grants the Commission the power and authority to: (i) formulate and enforce standards, guidelines, policies, rules and regulations to carry out the provisions of the RCC; and (ii) exercise such other powers provided by law or those which may be necessary or incidental to carry out the powers expressly granted to it; aDSIHc WHEREAS, Section 13 of the RCC provides that the articles of incorporation and applications for amendments thereto may be filed with the Commission in the form of an electronic document, in accordance with the Commission's rules and regulations on electronic filing; WHEREAS, in pursuit of sustainable practices, and streamlined and automated processes, the Commission no longer accepts submission of hard copies of reports, and has adopted the use of the Electronic Filing and Submission Tool (eFAST) 1 in the filing of GIS and AFS; WHEREAS, the filing of the GIS is within thirty (30) calendar days from: (i) the actual annual stockholders' meeting for stock corporations; (ii) the actual annual members' meeting for non-stock corporations; or (iii) the anniversary date of the issuance of the Securities and Exchange Commission (SEC) License for foreign corporations; while the filing of the AFS generally depends on the last numerical digit of a corporation's SEC Registration or license number, subject to the schedule to be prescribed by the Commission, provided that corporations whose fiscal year ends on a date other than 31 December may file their AFS within 120 days from the end of their respective fiscal years; WHEREAS, Section 177 (b) of the RCC provides that the Commission may place corporations under delinquent status in case of failure to submit the reportorial requirements three (3) times, consecutively or intermittently, within a period of 5 years; WHEREAS, the Commission imposes fines and/or penalties to regulated entities for failure to file the required reportorial requirements in a timely manner; aScITE WHEREAS, the Commission has issued Memorandum Circular (MC) No. 28, s. 2020, 2 which necessitates the creation and designation of an official email address and cellphone number of every corporation, association, partnership, and person under its jurisdiction and supervision; aScITE WHEREAS, an administrative penalty of Ten Thousand Pesos (Php10,000.00) is imposed upon corporations, associations, partnerships, and persons under the jurisdiction and supervision of the Commission that failed to comply with MC No. 28; WHEREAS, the power and authority to grant amnesty on all fines and penalties that may be imposed by the Commission on corporations is necessary and incidental to carry out the power to impose administrative sanctions under Section 158 of the RCC; WHEREAS, providing an amnesty on fines and penalties will provide corporations ample and cost-effective opportunity to update and make current their compliance with the documentary and reportorial requirements under the RCC, and the rules promulgated by the Commission; WHEREAS, it is the policy of the Commission to encourage compliance of its regulated entities, ensure a prudent identification of active and inactive corporations, and enhance and organize its database as part of continuing efforts to nurture a healthy and vibrant corporate sector; and WHEREAS, the Commission shall be reevaluating its existing scale of fines and penalties upon a thorough review of all active regulated entities, to meaningfully deter violations and/or noncompliance with current regulations; NOW THEREFORE, the Commission hereby promulgates the following guidelines and procedures on availing the amnesty on fines and penalties to be assessed and collected by the Commission for: (i) the non-filing and late filing of the GIS for the latest and prior years; (ii) the non-filing and late filing of the AFS for the latest and prior years; and (iii) the non-compliance with MC No. 28, s. 2020: SECTION 1. Covered Violations . Unless otherwise provided under Section 5 of these Circular, an amnesty on the unassessed (not yet assessed) and/or uncollected fines and penalties by the Commission (already assessed not yet paid) is hereby authorized to be granted to all corporations, including branch offices, representative offices, regional headquarters, and regional operating headquarters of foreign corporations and foundations, for the following violations: a. Non-filing of GIS for the latest and prior years; b. Late filing of GIS for the latest and prior years; c. Non-filing of AFS, including fines for its attachments ( i.e. , Certificate of Existence of Program/Activity, Non-Stock, Non-Profit Organization Forms), for the latest and prior years; and d. Late filing of AFS, including fines for its attachments ( i.e. , Certificate of Existence of Program/Activity, Non-Stock, Non-Profit Organization Forms), for the latest and prior years. ETHIDa In addition to corporations, this shall also cover associations, partnerships, and persons under the jurisdiction and supervision of the Commission, that failed to comply with MC No. 28. 3 SECTION 2. Amnesty Rates . The applicable rates under this Circular will be as follows: A. Non-Filing and Late Filing of GIS and/or AFS, and MC No. 28 violation: Violation Fine Non-Filing of GIS Php5,000 (encompassing all violations on non-filing and late filing of GIS, and AFS and its attachments) Late Filing of GIS Non-Filing of AFS Late Filing of AFS MC No. 28, s. 2020 Waived (Php10,000) The foregoing rate will apply, provided that, the applicant corporation or entity will (i) submit the latest reportorial requirement due at the time of application; AND (ii) comply with MC No. 28, s. 2020 through the MC28 Submission Portal . B. Suspended and Revoked Corporations: The amnesty rate for Suspended and Revoked Corporations, including those which have filed for the lifting of suspension/revocation, are as follows: Violation Fines Non-Filing of GIS 50% of the assessed fines (encompassing all violations on non-filing and late filing of GIS, and AFS and its attachments) Late of GIS Non-Filing of AFS Late Filing of AFS MC No. 28, s. 2020 Waived (Php10,000) The foregoing rate will apply, subject to the payment of filing/petition fee and the appropriate proceedings 4 to be filed with the Company Registration and Monitoring Department (CRMD) and Extension Offices (EOs) and compliance with the requirements under Section 3 of this Circular. SECTION 3. Filing of Application and Supporting Documents . On or before 30 April 2023, the duly authorized representative or resident agent of the corporation ("Applicant") shall file an Online Expression of Interest Form ("EOI") (see Annex A) via the Electronic Filing and Submission Tool (eFAST). TIADCc The Applicant must present proof of his or her authority ( e.g. , Notarized Secretary's Certificate or Board Resolution, or written Power of Attorney of the resident agent duly filed with the Commission in compliance with Section 128 of Batas Pambansa Blg. 68, 5 or Section 145 of the RCC) with the following requirements: a. For Domestic Corporations (Ordinary Stock and Non-Stock): i. Latest due FS or undertaking to submit FS within forty-five (45) calendar days from the issuance of confirmation of payment; ii. Latest due Amended FS, if any; iii. Latest due GIS; iv. Latest due Amended GIS, if any; and v. Proof of compliance with MC No. 28. b. For Foreign Corporations (Branch Offices, Representative Offices, Regional Area Headquarters, and Regional Operating Headquarters): i. Latest due FS or undertaking to submit FS within forty-five (45) calendar days from the issuance of confirmation of payment; ii. Latest due Amended FS, if any; iii. Latest due GIS; iv. Latest due Amended GIS, if any; and v. Proof of compliance with MC No. 28. 3.1. Application and Payment Procedures for Non-Compliant Corporations. Non-Compliant corporations include corporations who have neither complied with the prescribed submission of GIS and AFS intermittently or consecutively in the previous years, nor complied with MC No. 28, or both. Corporations that fall under this type of category will primarily file an online EOI Form through the eFAST. After uploading of EOI and proof of MC No. 28 compliance, the eFAST will automatically generate a Payment Assessment Form ("PAF") with an amount of Five Thousand Pesos (Php5,000.00) reflecting the fixed amnesty amount. The Applicant must settle this fee through the Electronic System for Payment to SEC ( eSPAYSEC ) only, where the electronic Official Receipt (eOR) is generated. Once the payment is settled, the Applicant shall upload the Notarized Application for Amnesty Form (see Annex B-1) and all other requirements cited in Section 3 of this Circular. Subsequently, once the submitted documents have been evaluated and deemed compliant, a Confirmation of Payment of Amnesty Fees will be issued to their registered email address. 3.2. Application and Payment Procedures for Revoked and Suspended Corporations. Similar to the non-compliant corporations under Section 3.1, Revoked and Suspended corporations eligible for amnesty under this Circular are those non-compliant with the prescribed submission of AFS and GIS, intermittently or consecutively, in the previous years, non-compliant with MC No. 28, or both. Corporations that fall under this type of category will primarily file an online EOI Form and upload the Petition to Lift Order of Suspension/Revocation, and proof of MC No. 28 compliance through the eFAST. If the Applicant lacks compliance with MC No. 28, then enrollment through the MC28 Submission Portal shall be a prerequisite. Further, the applicant is directed to pay its corresponding petition fees via eSPAYSEC only, through a PAF that will be generated by the system. cSEDTC After the petition fee has been settled, the Applicant shall upload the Notarized Application for Amnesty Form (see Annex B-2) and all other requirements cited in Section 3 of this Circular through the eFAST. After submission of the documents, the Applicant is advised to wait for the verification of its corporate status. Once the conduct of assessment and monitoring process is completed to determine the total amount of fines and penalties, the Applicant will receive an email notification from the CMD, appropriate Operating Department or EO, with the PAF that contains the amount reflecting the 50% of the total assessed fines. The Applicant must settle this fee through eSPAYSEC or LBP's On-Coll Facility and secure a copy of an electronic Official Receipt (eOR) from espaysec.sec.gov.ph/eor . After payment has been settled, and submitted documents have undergone monitoring and evaluation, the Applicant shall receive a Confirmation of Payment for Amnesty on Fines and Penalties through their registered email address. A corporation's status will be updated, subject to the processing and issuance of the Lifting of Revocation and/or Order of Revival. SECTION 4. Issuance of Confirmation of Payment . Corporations, which have fully complied with all the conditions set forth in these rules, including the payment of the relevant fines and penalties, shall be issued with a Confirmation of Payment for Amnesty on Fines and Penalties arising from the non-filing or late filing of the GIS and/or AFS, and non-compliance with MC No. 28. The amnesty granted under this Circular is final and irrevocable, covering the period/s indicated in the said Confirmation. The issuance, however, of the Confirmation of Payment for Amnesty on Fines and Penalties shall not exempt the corporation from filing its subsequent mandatory reportorial requirements in a timely manner and, in the case of Revoked/Suspended Corporations, shall not automatically lift its Suspended/Revoked status which shall be a separate proceeding before the CRMD. SECTION 5. Exceptions . The following entities are excluded from the coverage of the amnesty under this Circular: AIDSTE a. Corporations whose securities are listed on the Philippine Stock Exchange ("PSE"); b. Corporations whose securities are registered but not listed on the PSE; c. Corporations considered as Public Companies; d. Corporations with intra-corporate dispute; e. Corporations with disputed GIS; and f. Other corporations covered under Sec. 17.2 of RA No. 8799 or the "Securities Regulation Code." SECTION 6. Validity of Amnesty . Only those which have filed an amnesty application and secured a PAF through the eFAST, and paid through the eSPAYSEC 6 or LBP On-Coll Facility 7 until 30 April 2023 shall be eligible for an amnesty under this Circular. Thereafter, the existing scale of fines and penalties issued by the Commission shall be observed. SECTION 7. Effectivity . This Circular shall take effect immediately upon completion of its publication in a newspaper of general circulation. Done this 15th day of March 2023, Makati City, Philippines. For the Commission: (SGD.) EMILIO B. AQUINO Chairperson ANNEX A Expression of Interest to Avail Amnesty of Fines and Penalties ANNEX B-1 Application for Amnesty of Fines and Penalties ANNEX B-2 Application for Amnesty of Fines and Penalties of Suspended/Revoked Corporations Footnotes 1. SEC Memorandum Circular No. 2, s. 2022, n entitled "Schedules for Filing of Annual Financial Statements and General Information Sheet" dated 19 January 2022. n 2. SEC MC No. 28, s. 2020, or the "Requirement for Corporations, Partnerships, Associations, and Individuals to Create and/or Designate Email Account Address and Cellphone Number for Transactions with the Commission" dated 27 August 2020. 3. It may be recalled that the Commission extended the deadline for compliance with MC No. 28 to 11 November 2021, as stated in the Notice dated 8 September 2021 or the "Extension of Submission of Forms/Notices pursuant to Memorandum Circular No. 28, series of 2020." 4. The grant of amnesty and payment of the prescribed rate herein does not automatically lift the suspension and revocation. Hence, suspended and revoked corporations are still required to file a Petition to Lift Order of Suspension/Revocation of Certificate of Registration. 5. Otherwise known as the "Corporation Code of the Philippines." 6. Payment of amnesty for non-compliant corporations and Petition Fees for lifting of Order of Revocation/Suspension will only be accepted through eSPAYSEC. 7. This payment option is only available for settlement of amnesty fees for suspended/revoked Corporations. n Note from the Publisher: Copied verbatim from official document. "SEC Memorandum Circular No. 2, s. 2020" should be "SEC Memorandum Circular No.2, s. 2022". n Note from the Publisher: Copied verbatim from official document. "21 January 2020" should be "19 January 2022". Published in the Manila Bulletin and Philippine Daily Inquirer on March 17, 2023. Filed with UP Law Center on March 16, 2023.