Security and Exchange Commission

Senate Bill No. 692: 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’ liabilities. Such exposure risks all of the assets of the proprietor, even his family’s properties.

To address these, this measure recommends the recognition of the one-person 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 for 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.

The 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 global best practices, attract more investments and start-ups in the country and specifically address the needs of entrepreneurs.

In view of the foregoing, immediate approval of this bill is earnestly sought.


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Eradicate Dummy Incorporators – Sen. Bam

Dummy incorporators will be a thing of the past if the measure filed by Senator Bam Aquino is enacted into law.

Aquino’s Senate Bill No. 2465 seeks to introduce key amendments to Batasang Pambansa Blg. 68 or the Corporation Code, which was passed in 1980 or more than three decades ago.

The senator said one of the measure’s key amendments is the introduction of a one-man corporation, which will eliminate the use of dummy incorporators in registering with the Security and Exchange Commission (SEC).

At present, a sole proprietor needs incorporators of five to fifteen individuals to be able to register with the SEC.

“If approved, this measure will encourage businessmen to do away with dummy incorporators and declare truthful and transparent information about their businesses,” said Aquino, chairman of the Senate Committee on Trade, Commerce and Entrepreneurship.

Aquino also expects the bill to strengthen ease of doing business to encourage entrepreneurs to expand and become a corporation, thus resulting in more jobs and livelihood to more Filipinos and making the country’s growth inclusive for everyone.

“Entrepreneurs must be given all the assistance they need as they serve as the country’s economic backbone, accounting for 99 percent of enterprises and providing 66 percent of jobs in the country,” he added.

Aside from the one-man corporation, the bill also aims to lessen the lifespan of perpetual corporations from the current 50 years to 25 years, giving them a chance to develop long-term plans and look into more sustainable and far-reaching strategies for more economic growth.

The measure also contains other related provisions to make the law relevant and attuned to present times, adopt the global practices, attract more investments and start-ups in the country, and specifically address the needs of entrepreneurs.

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