Rural Bank of Minglanilla

February 27, 1990 Rural Bank of Minglanilla C/o Mr. Apolonio M. Dedamo, Jr. Minglanilla, Cebu Gentlemen : This refers to your letter dated September 6, 1989, requesting information on the SEC required fees for amended articles of incorporation/increase of capital stock of Rural Banks. cdll You stated that the Rural Bank of Minglanilla (Cebu), Inc. is proposing to amend its articles of incorporation increasing its authorized capital stock from P10 M to P20 M. The corporation was made to understand that rural banks are exempted from SEC fees. However, it came to know that when another rural bank, the Rural Bank of Compostela, filed its amendment for increase of capital stock, it was levied by the Cebu SEC Office fees for its registration. The bank therefore would like to know whether it is exempted from payment of SEC filing fees for increase of capital stock or not. A perusal of RA No. 720, as amended by RA Nos. 1097, 4106, 5939, PD. Nos. 1955 and 2026, otherwise known as the Rural Bank Act, disclosed that not all rural banks enjoy exemption from fees. The law provides, thus: "SECTION 14. All rural banks created and organized under the provisions of this Act with net assets less than thirty million pesos, excluding the counterpart capital subscribed and paid in by the Government under Sections seven and eight of this Act, shall be exempt from the payment of all taxes, charges and fees of whatever nature and description : Provided, however, That when the net assets of a rural bank is thirty million pesos, the taxes, charges and fees shall be levied in the proportion that such excess bears the said net assets ; Provided, finally, That the tax privileges shall be exempted only for a period of five years from February 3, 1986, subject to further extension as may be recommended by the Minister of Finance." (emphasis supplied). Under the aforecited provision, the exemption of rural banks from payment of fees depends upon the amount of their net assets. If the net assets of a rural bank is less than thirty million pesos, excluding the counterpart assumed by the government, the rural bank is considered exempt. If the net assets is thirty million pesos or more, payment of fees shall accrue. It appearing that the present authorized capital stock of Rural Bank of Minglanilla (Cebu), Inc. is only P10 M, there is a presumption that its net assets is less than P30 M. Accordingly, it is not subject to the required SEC filing fees for increase of capital stock and amended articles of incorporation. Please be advised accordingly. Very truly yours, (SGD.) RODOLFO L. SAMARISTA Associate Commissioner