Senate Bill No. 2465: Amending Sec. 6; Bp 68 (Corporation Code)
The Philippines is enjoying the best economic growth it has seen in years and has deemed to be a rising star in the region. But the challenge remains to enhance the local markets and business environment in order for investments to continuously come in. Updating pertinent laws is needed to keep up with the fast-changing business landscape and sustain this unprecedented progress.
This measure seeks to introduce key amendments to Batas Pambansa Blg. 68 or the Corporation Code, which was passed in 1980 or more than three decades ago.
Two key provisions aim to address the needs of entrepreneurs in the country.
Firstly, a sole proprietor presently needs to have incorporators of five to fifteen individuals to be able to register with the Security and Exchange Commission (SEC). The policy has created cases for dummy incorporators.
In addition, sole proprietorship exposes all the properties of the entrepreneur for the business’s liabilities. Such exposure risks all of the assets of the proprietor, even his family’s properties.
To address these, this measure recommendsthe recognition of the one-man corporation to encourage entrepreneurs to declare truthful and transparent information about their businesses, limit liabilities and spare family assets, and further grow their businesses.
Secondly, the law currently provides a limited corporate term of 50 years maximum. Many big firms forget to renew after 50 years and they end up dissolving the company, liquidating their assets and transferring their properties. This unfortunate event leads to loss of income and livelihood for families, and the loss of legacy and dreams for entrepreneurs and employees.
This bill seeks to allow corporations to have perpetual corporation existence but with renewal requirements every 25 years. Failure to comply with the requirements will not end corporate existence but penalties will be imposed. It allows a corporation to develop long-term plans and to look into more sustainable and far-reaching strategies for more economic growth.
Other related provisions have been proposed to make the policy relevant and attuned to present times, adopt best global practices, attract more investments and start-ups in the country, and specifically address the needs of entrepreneurs.
In view of the foregoing, the approval of this bill is earnestly sought.
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