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Philippines: Revised Corporation Code signed into law
MANILA, Philippines — President Duterte has signed into law the Revised Corporation Code of the Philippines, a move which the Securities and Exchange Commission (SEC) said would lead to a stronger and more competitive corporate sector.
The new law, aimed at improving ease of doing business in the country, will provide more protection to corporations and stockholders and promote good corporate governance, the SEC said.
SEC chairperson Emilio Aquino said the new legal framework would be in tune with the fast-evolving business landscape.
“We look forward to a more competitive corporate sector, as the Revised Corporation Code adopts international best practices and standards, tailored to address the needs and realities of the Philippine corporate setting, and introduces new concepts and mechanisms to help the Philippines keep up with the changing times,” Aquino said.
Among the notable amendments to the Corporation Code is the grant of a perpetual corporate term for existing and future corporations compared to the previous 50-year term.
Aquino said allowing corporations to perpetual existence would eliminate the possibility of legitimate and productive businesses prematurely closing down only because they failed to renew their registration. It will also foster a sense of longevity that can translate to long-term and sustainable projects and investments.
As part of the shift to a perpetual corporate term, the Revised Corporation Code mandated the SEC to allow corporations with expired registration papers to apply for the revival of their corporate existence together with all the rights and privileges under their certificates of incorporation.
The new law, which amended the almost four-decade-old Batas Pambansa Blg. 68, forms part of the current administration’s legislative priorities.
It aligns with Duterte’s 10-point economic agenda, specifically on increasing the economy’s competitiveness and improving the ease of doing business in the country.
The Revised Corporation Code also allows for the formation of one-person corporation, a corporation with a single stockholder and without a minimum authorized capital stock required.
A one-person corporation instead of a corporation with several stockholders and a board of directors allows for more flexibility in pursuing businesss, the SEC said.
The lone stockholder can make decisions without having to seek board consensus and provides greater protection to the stockholder by limiting liability to the corporate entity.
The old Code required at least five stockholders in the formation of corporations.
The Revised Corporation Code also mandates the Commission to develop and implement an electronic filing and monitoring system.
“Collectively, the amendments are aimed at encouraging entrepreneurship and the formation of new businesses, improving the ease of doing business in the country, promoting good corporate governance, increasing protection afforded to corporations and stockholders, and deterring corporate abuses and fraud,” Aquino said.
Source: https://www.philstar.com/business/2019/02/22/1895640/revised-corporation-code-signed-law#DBd5m96k8HI05hCA.99