Rules Requiring Non-Stock Corporations to Keep Accounting Records and to Submit Annual Financial Statements

November 20, 1980 RULES REQUIRING NON-STOCK CORPORATIONS TO KEEP ACCOUNTING RECORDS AND TO SUBMIT ANNUAL FINANCIAL STATEMENTS In order to enable the Securities and Exchange Commission to closely supervise and properly monitor the operations and activities of non-stock corporations for the purpose of protecting the membership participation therein as well as the interest of the public in general, all non-stock corporations duly registered with the Commission are hereby required to keep proper accounting records and to prepare and submit to the Commission their annual financial statements, consisting of a balance sheet and income statement in accordance with the following provisions: * 1. The annual financial statements of non-stock corporations must be submitted to the Commission within 120 days for corporations whose securities are not registered and 105 days for corporations whose securities are registered after the end of their fiscal year . However, under meritorious cases and provided a written request is made within the above prescribed period, an extension of thirty (30) days may be granted by the Commission for the submission of the said financial statements; 2. The financial statements of non-stock corporations with total assets of P500,000, or more, or with gross receipts of P100,000, or more, for the fiscal year covered must be duly audited and certified by an Independent Certified Public Accountant. In other cases where the total assets is less than P500,000 and the gross receipt is less than P100,000, the said financial statements, may, instead, be attested and sworn to by the Treasurer of the corporation. 3. Gross receipts as stated under the preceding paragraph should include revenues from all sources, such as donations received in cash or in kind, deposits received in whatever nature, and the amount of cash sales or sales on account made, provided, however, that when the corporation is using the cash basis of accounting, only cash or goods actually received should be included as gross receipts, subject to the provision of the following paragraph; 4. The financial statements can be prepared either on the accrual basis or cash whichever is deemed more appropriate under the circumstances, provided, that once a method is selected, it should be consistently followed; 5. The financial statements must show in sufficient detail the breakdown of the accounts with the proper nomenclature and the necessary material disclosures thereto pursuant to the accepted standards of auditing; 6. Non-stock corporations which are supervised by other government agencies must furnish this Commission within the period provided herein copies of the financial statements as submitted to the appropriate government agency; 7. Non-stock corporations which are duly licensed to offer and sell proprietary shares, membership certificates, or other forms of securities to the public are exempted from these rules but shall comply with the requirements under other laws and rules of the Commission for particular cases; 8. Any violation of these rules shall be dealt with in a manner authorized under R.A. 1143 and P.D. 902-A without prejudice to taking such further actions as may be warranted by applicable laws. These rules shall take effect fifteen (15) days after their publication in a newspaper of general circulation in the Philippines. (SGD.) ANGEL L. LIMJOCO, JR. Chairman Footnotes * Amended Rules dated July 9, 1982. CIRCULAR REMINDING BANKING INSTITUTIONS, PUBLIC UTILITY CORPORATIONS AND INSURANCE CORPORATIONS TO FILE THEIR ANNUAL FINANCIAL STATEMENTS WITH THE SECURITIES AND EXCHANGE COMMISSION PURSUANT TO EXISTING REGULATIONS (AS AMENDED) For the information of all concerned, the following clarification and guidelines for compliance with the SEC Regulations on Form and Content of Financial Statement required to be filed by corporations with the Securities and Exchange Commission, which took effect on July 1, 1973, are hereby issued: cdlex 1. Pursuant to Rule 4-1 of the aforesaid regulations, all banking institutions, public utility corporations and insurance corporations are required to furnish the Securities and Exchange Commission with at least two (2) copies of their annual financial statements in the same form and with the same content as submitted to the appropriate government agencies regulating their operations. 2. The aforesaid regulations are applicable to all banking institutions, public utility corporations and insurance corporations regardless of the number of their stockholders and irrespective of whether or not their shares of stock are being offered or sold to the public. 3. The aforesaid financial statements shall be submitted to the Securities and Exchange Commission within three and a half (3 1/2) months from the end of the fiscal year of the corporation. However financial statements of rural banks for the fiscal year ending 1982 and thereafter shall be filed with the Commission within one hundred twenty (120) days from the end of their fiscal years, the same to be accompanied by a copy duly stamped "Received" by the Bureau of Internal Revenue (BIR). 4. Corporations who failed to comply previously with the aforesaid regulations are given up to December 31, 1981 within which to furnish the Securities and Exchange Commission with at least their 1980 financial statements, without penalty. In the case of rural banks, the deadline for submission of their annual financial statements for the fiscal year ending 1981 and prior years is extended to April 30, 1983, without the covering penalty. Thereafter, however, violations of these regulations shall be subject to the sanctions provided for under the said regulations and other applicable laws. Mandaluyong Metro Manila, Philippines. June 10, 1981 (SGD.) ANGEL L. LIMJOCO, JR. Chairman MEMORANDUM CIRCULAR NO. 1 (Monitoring Series of 1985) SUBJECT : Revised Scale of Fines for Late -Filing of Reportorial Requirements by Non-Stock Corporations Without Secondary Franchise(S) Starting October 1, 1985, the attached Scale of Fines for non-stock corporations without secondary franchise(s) shall be imposed on the late-filing of the following reportorial requirements: 1. Financial Statements; 2. General Information Sheet; and 3. Corporate Books Any party seeking reconsideration and/or reduction of the penalties herein provided shall file a letter of justification properly supported by evidence thereto and submit the same to the Director of the Department concerned for proper evaluation and other appropriate action on the same. In the case of corporations which are not operating, an affidavit to that effect should likewise be submitted. In meritorious cases, if a corporation fails to hold its annual members' meeting and organizational meeting of the board of trustees, an affidavit to that effect should also be presented. LibLex Mandaluyong, Metro Manila, Philippines. October 1, 1985. MANUEL G. ABELLO Chairman MEMORANDUM CIRCULAR NO. 2 (Monitoring Series, 1986) TO : All Stock Corporations SUBJECT : Revised Due Date for Filing of Statement Sources and Application of Funds (SSAF) All stock corporations registered after the date of effectivity of this Memorandum Circular shall file the Statement of Sources and Application of Funds together with the Income Statement and Balance Sheet covering their first year of operation within the due date required for the submission of their financial statements as provided for under existing rules and regulations. This provision repeals paragraph numbered "4" of the "GUIDELINES FOR THE VERIFICATION OF THE PAID-UP CAPITAL (CASH) OF CORPORATIONS" which requires the submission of SSAF within fifteen (15) days from the end of the three-month period from the date of registration of the articles of incorporations. Rule 4(4) of the "RULES AND REGULATIONS ON FORM AND CONTENT OF FINANCIAL STATEMENTS" requiring corporations governed thereunder to include Statement of Changes in Financial Position in the yearly submission of their Financial Statements shall not in any manner be construed as having been modified or repealed by this circular. This circular shall take effect immediately, January 17, 1986, Mandaluyong, Metro Manila. MANUEL G. ABELLO Chairman MEMORANDUM CIRCULAR NO. 3 (Monitoring Series of 1986) SUBJECT : Scale of Fines for Dissolving Corporations Starting March 17, 1986 the attached scale of fines for dissolving corporations shall be imposed on the late filing of the following reportorial requirements: 1. Financial Statements; 2. General Information Sheet/Minutes of Meeting; 3. Affidavit of Non-Operation; 4. Affidavit of Non-Holding of Meeting; and 5. Notice of Postponement of Meeting. Mandaluyong, Metro Manila, Philippines. prcd March 17, 1986. JULIO A. SULIT, JR. Officer-in-Charge SCALE OF FINES * FOR DISSOLVING CORPORATIONS I. FOR DISSOLVING STOCK CORPORATIONS WITH RETAINED EARNINGS Requirements/Violation FINES FINES 1 Financial Statements P25.00 plus an additional fine of P1.00 for each day of default but not to exceed the maximum fine prescribed under Table A. 2 General Information Sheet/ P25.00 plus an additional fine of P1.00 for Minutes of Meeting each day of default but not to exceed the maximum fine prescribed under Table A. 3 Affidavit of Non-Operation P25.00 per year 4 Affidavit of Non-Holding of Meeting P100.00 per year 5 Notice of Postponement of Meeting P25.00 per year 6 Statement of Sources and Condoned Application of Funds 7 Stock and Transfer Book Condoned Note: *Covers the fine to be assessed corporations which have actually filed their dissolution papers with the Commission. Table A MAXIMUM FINES FOR LATE FILING OF FINANCIAL STATEMENTS OR GENERAL INFORMATION SHEET/MINUTES OF MEETING CURRENT PAID-UP CAPITAL RETAINED EARNINGS Over P100,000 Over P300,000 Over P500,000 Up to P100,000 to P300,000 to P500,000 to P1,000,000 Over P1,000,000 UP TO P100,000 P100 P150 P200 P250 P300 OVER P100,000 to P300,000 150 200 250 500 350 OVER P300,000 to P500,000 200 250 300 350 400 OVER P5,000 to P1,000,000 250 300 350 400 450 OVER P1,000,000 300 350 400 450 500 II. FOR DISSOLVING STOCK CORPORATIONS WITH DEFICIT/CAPITAL DEFICIENCY Requirement/Violation FINES 1 Financial Statements P25.00 plus an additional fine of P.50 for each day of default but not to exceed the maximum fine prescribed under Table B. 2 General Information Sheet/ P25.00 plus an additional fine of P.50 for Minutes of Meeting each day of default but not to exceed the maximum fine prescribed under Table B. 3 Affidavit of Non-Operation P25.00 per year 4 Affidavit of Non-Holding of Meeting P50.00 per year 5 Notice of Postponement of Meeting P25.00 per year 6 Statement of Sources and Condoned Application of Funds 7 Stock and Transfer Book Condoned CIRCULAR NO. 4 (Monitoring Series 1986) SUBJECT : Revised Scale Of Fines Starting March 26, 1986, the attached revised scale of fines for stock corporations and non-stock corporations with secondary franchise shall be imposed on the late filing of the following reportorial requirements: cdll 1. Stock and Transfer Book 2. Financial Statements 3. General Information Sheet 4. Affidavit of Non-Operation 5. Affidavit of Non-Holding of Meeting 6. Notice of Postponement of Meeting Corporations which are not operative shall submit an affidavit of non-operation. In meritorious cases, if a corporation failed to hold its annual stockholders/members meeting and organizational meeting of the board of trustees/directors shall submit an affidavit of such non-holding of meeting. Mandaluyong, Metro Manila, Philippines. March 26, 1986. JULIO A. SULIT, JR. Officer-in-Charge IV. OTHER VIOLATIONS 1. Late Filing of Affidavit of Non-Holding of Meetings P100.00 per year 2. Late filing of Affidavit of Non-Operation P25.00 per year 3. Late Filing of Notice of Postponement of Meeting P25.00 per year MEMORANDUM CIRCULAR NO. 5 (SMD Series of 1986) SUBJECT : Compromise Penalties for Non-Submission/Late Submission of Reportorial Requirements In line with the Commission's policy of delisting dormant/inactive corporations from the registry of corporations in order to concentrate on its close supervision over the activities of active corporations, and in implementation of the government's program of economic recovery through, among other means. the encouragement of investors and the promotion of the welfare of corporations, the Commission, by this Circular, suspends the penalties imposed on corporations which have defaulted in their reportorial requirements. cdll For purposes of this Circular, the fines under Memorandum Circular Nos. 1, 3, and 4, Series of 1985 and 1986, respectively, are hereby suspended until November 15, 1986. In lieu thereof, corporation shall be allowed to pay the compromise penalties under the hereunder prescribed conditions. SECTION 1. Scope and Amount of Compromise Penalty . The Circular extends only to routine reportorial requirements, namely, General Information Sheet, Financial Statements, Stock and Transfer Book for stock corporations and five (5) Corporate Books for non-stock corporations. Corporations which have regularly submitted on time their 1981 to 1985 General Information Sheet and Financial Statements are hereby exempted from the coverage of this Circular provided they submit their 1985 General Information Sheet, or 1986, for corporations whose annual meeting falls within January to June 1986, within the period provided under Section 4 hereunder. The companies penalties shall be as follows: I. Non-Filing/Late Filing Of: Penalty for every year Maximum of default a) General Information Sheet P50.00 P500.00 b) Financial Statements P50.00 for stock corporations with retained earnings P250.00 for non-stock corporations and for stock corporations with deficit c) Affidavit of Non-Operation P25.00 P250.00 by Corporations which have temporarily ceased business operations. d) Affidavit of Non-Holding of P25.00 P250.00 meeting by corporations which failed to submit the General Information Sheet because of failure to hold the scheduled meeting specified in the by-laws. II. Late registration of: Stock and Transfer Book/Corporate Books P50.00 SECTION 2. Documents to be Submitted : A. Submit to the Supervision and Monitoring Department, 8th Floor, SEC Building, EDSA, Mandaluyong, Metro Manila. the following: 1. Sworn statement specifying therein the reportorial requirements not filed/submitted fate and the years covered; 2. General Information Sheet for 1985 or 1986, for corporations whose annual meetings fall between January to June 1986 (use format prescribed under Annex "A"). Corporations which have not held their annual organizational meeting since 1985 up to June 1986, are required to submit the General Information Sheet as of their latest scheduled organizational meeting as set forth in their By-Laws. 3. 1985 Financial Statements, if the same have not yet been submitted to the Commission, 4. Affidavit of non-operation with an undertaking to notify the SEC upon resumption of business operations, for corporations which have temporarily ceased operations prior to and up to the effectivity date of this Circular. An affidavit of non-operation shall exempt a corporation from reportorial requirements only for a period of less than five (5) years, beyond which an inactive corporation shall be subject to suspension/revocation under the New Corporation Code and P.D. 902-A. B. Register Stock and Transfer Book/Corporate Books in case said books have not been registered and pay the registration fee of P25.00. SECTION 3. Exemption from the Payment of Compromise Penalty . Corporations which have paid starting 1981, either partially or fully, penalties for violations of routine reportorial requirements are exempt from the payment of compromise penalty provided they comply with the applicable provisions of Section 2 hereof and submit at the same time a sworn statement attesting to the fact of payment or any proof thereof. SECTION 4. Period of Submission of Documents and Payment of Compromise Penalty . The comprise penalty shall be paid either in cash, or in manager's or cashier's check payable to the Securities and Exchange Commission; within the following period: CORPORATIONS PLACE (AREA) SUBMISSION PERIOD (DATES) OF BUSINESS 1986 National Capital Region (NCR) (1) Manila, Quezon City, Caloocan, August 1 to September 9 Pasay City (2) Makati Malabon, Mandaluyong, September 10 to October 7 Navotas, Paraaque, San Juan (3) Las Pias, Marikina, Muntinlupa, October 8 to October 13 Pasig, Pateros, Taguig, Valenzuela REGIONS I TO V October 14 to October 22 REGIONS VI TO XII October 23 to October 31 Provided that corporations which will submit the required documents and/or pay the compromise penalty after the period assigned to them but before November 15, 1986 shall pay, in addition to the compromise penalty, P50.00 surcharge for non-stock corporations, stock corporations with deficit, and corporations which are not in operation, and a surcharge of P100.00 for stock corporations with retained earnings. SECTION 5. Misrepresentation in the Sworn Statement : Any misrepresentation in the sworn statement required under this circular shall subject the corporation to the scale of fines prescribed under the present rules, in addition to the criminal prosecution of the affiant. SECTION 6. Effect of Failure to Avail of the Compromise Penalty . All corporations which fail to avail of the above-mentioned compromise penalty shall be subject to the scales of fines presently prescribed, in addition to suspension/revocation of their certificate of registration whenever applicable. SECTION 7. Effectivity . This Circular shall take effect immediately. LexLib EDSA, Mandaluyong, Metro Manila, Philippines July 1, 1986. JULIO A. SULIT, JR. Chairman SECURITIES AND EXCHANGE COMMISSION Metro Manila GENERAL INSTRUCTION ON THE USE OF THE REVISED INFORMATION SHEET (G.I.S.) 1. The report is to be submitted within thirty (30) calendar days following the date of the annual stockholders/member's meeting and organizational meeting of directors/trustees. Do not leave any item blank, Write N.A. if information required is not applicable to the corporation. 2. If no meeting was held, the corporation shall submit the GIS together with an affidavit of non-holding of meeting within thirty (30) calendar days from the date of scheduled meeting (as provided in the by-laws) 3. The report should be certified and sworn to by the corporate secretary, or by the President or Chairman of the Board. 4. Submit these (3) copies to the Records Division, Ground Floor, SEC Building, EDSA, Greenhills, Mandaluyong, Metro Manila GENERAL INFORMATION SHEET AS OF ____________________________ (Date of Actual Meeting) Name of Corporation __________________________________________________ Principal Office _______________________________________________________ Number Street City/Town Province A. ORGANIZATIONAL PROFILE 1. Date Registered ________ 2. Reg. No. _______ 3. TAN ______ 4. Purpose for which the corporation was organized: a) Primary ________________________________________________ b) Secondary ______________________________________________ 5. Board of Directors/Trustees Name Position Nationality Residence 1) _______________________________________________________________ 2) _______________________________________________________________ 3) _______________________________________________________________ 4) _______________________________________________________________ 5) _______________________________________________________________ 6) _______________________________________________________________ 7) _______________________________________________________________ 8) _______________________________________________________________ 9) _______________________________________________________________ 10) _______________________________________________________________ (Use Extra Sheet if Necessary) Note: Should a director, trustee or officer die, resign or in any manner, cease to hold office, the corporation shall report such fact to the Commission within fifteen (15) days after such death, resignation or cessation of office. cdlex 11) _______________________________________________________________ 12) _______________________________________________________________ 13) _______________________________________________________________ 14) _______________________________________________________________ 15) _______________________________________________________________ 6. Corporate Officers: (as provided for in the by-laws) Name Position Nationality Residence 1) _______________________________________________________________ 2) _______________________________________________________________ 3) _______________________________________________________________ 4) _______________________________________________________________ 5) _______________________________________________________________ 6) _______________________________________________________________ 7) _______________________________________________________________ 8) _______________________________________________________________ 9) _______________________________________________________________ 10) _______________________________________________________________ 11) _______________________________________________________________ 12) _______________________________________________________________ 13) _______________________________________________________________ 14) _______________________________________________________________ 15) _______________________________________________________________ (Use Extra Sheet if Necessary) 7. Inter-company affiliation: a) Parent company Name Nationality Address b) Subsidiary(ies): 1) Name Nationality Address 2) Name Nationality Address B. FINANCIAL PROFILE: 1. Capital Structure: Authorized Subscribed Paid-Up ____________________________________________________________________ ____________________________________________________________________ 2. Breakdown of Subscribed Capital: Nationality No . of Stockholders Amt . Subscribed % to Total ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ ____________________________________________________________________ 3. Total Yearly compensation of directors during the immediately preceding year (in lump sum) P___________ 4. Net Profit before tax during the year prior to the immediately preceding year P___________. (Ex. Assume that your corporation is filing this G.I.S. in 1986, the net profit that is required to be disclosed is the net profit for 1984) 5. Investment of Corporate Funds: a) Investment of corporate funds in another corporation(s) 1. Date of Board Resolution ______________________ 2. Date of Stockholders Resolutions ________________ b) Investment of corporate funds in any of the secondary purpose(s) 1. Date of Board Resolution ______________________ 2. Date of Stockholders Resolutions ________________ 6. RETAINED EARNINGS as of the end of the immediately preceding year P _____________________ 7. Dividends declared during the immediately preceding year: a) Cash dividend P ___________________________ b) Property dividend P ________________________ c) Stock dividend P __________________________ Republic of the Philippines In the City of _________) S.S. I, _______________________________________________________ of the Name Position above mentioned corporation, do solemnly swear that all the matters set forth in the above report is true and correct to the best of my knowledge and belief. _______________________ Signature SUBSCRIBED AND SWORN to before me this _______ day of _____, 19___, affiant exhibited his/her Residence Certificate No. _____, issued on _______________ at _____________. _________________ Doc No. ______ | Affix P2.00 | _______________________ Page No. ______ | Documentary | NOTARY PUBLIC Book No. ______ | Stamp | Until December 31, 19____ Series No. ______ |________________ |