SEC jacks up penalty for late filing of reports by 900%

After 22 years, the Securities and Exchange Commission (SEC) has raised penalties for companies that will be late in filing requirements set by the corporate watchdog.

“The higher fines and penalties come after the implementation of the SEC Amnesty Program, which gave corporations a chance to settle the fines and penalties they have accumulated for noncompliance with reportorial requirements at a lower cost,” the regulator said in a statement on Sunday.

Under its updated scale of fines and penalties — which will take effect on April 1 — the SEC said one-person corporations (OPCs) and domestic stock corporations with retained earnings of more than P100,000 would incur a basic penalty of P5,000 for the late filing of their general information sheet or annual financial statements.

A P1,000 fine will likewise be added for each month that the documents are not submitted.

The new rate is equivalent to a 900-percent increase from the previous P500 rate.

At the same time, OPCs and domestic stock and nonstock corporations with retained earnings and fund balance/equity, respectively, of not more than P100,000 that do not file reports on time will incur a penalty of P10,000. They will also incur P1,000 in fines for every month of continuing violation. This is a 1,900-percent jump from the previous P250 penalty, the SEC said.

Foreign stock corporations with accumulated income/fund balance/members’ equity of less than P100,000 will be fined P10,000 and a P6,000 late penalty if their report is filed after 30 days, or a P12,000 penalty if filed after 60 days.

Meanwhile, foreign nonstock corporations with less than P100,000 accumulated income/fund balance/members’ equity will be slapped with a P5,000 fine, plus a P6,000 penalty, if reports are filed after 30 days. If they file after 60 days, they will be met with an additional P12,000 penalty.

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Finally, foreign stock and nonstock corporations with an accumulated income/fund balance/members’ equity of less than P100,000 will incur a fine of P10,000, plus a P12,000 penalty.

Under the Revised Corporation Code, a filing is considered late if the report is submitted after the due date but still within a year after the prescribed deadline.

The SEC likewise doubled the penalty for violating Memorandum Circular No. 28, series of 2020, to P20,000.

MC 28 requires corporations, partnerships, associations and individuals to create an email address and designate a cell phone number for transactions with the SEC.