The Securities and Exchange Commission (SEC) said over the weekend it is imposing higher fines and penalties on erring corporations for the late and non-filing of reportorial requirements starting April 1, 2024.
The imposition of higher fines and penalties will be implemented three months after the SEC Amnesty Program, which gave corporations a chance to settle the fines and penalties they have accumulated for non-compliance with reportorial requirements at a lower cost, ended in December 2023.
The SEC on March 27 issued Memorandum Circular No. 6, Series of 2024, providing for the updated fines and penalties on the late and non-submission of unaudited financial statements (AFS), general information sheet (GIS) and non-compliance with SEC Memorandum Circular No. 28, Series of 2020 (MC 28).
The previous scale of fines was implemented about 22 years ago in July 2002.
Under the new scale of fines and penalties, one-person corporations (OPC) and domestic stock corporations with retained earnings of not more than P100,000 will incur a basic penalty of P5,000 for the late filing of their general information statement (GIS) or annual financial statement (AFS), plus P1,000 for every month of continuing violation.
The same penalty applies to domestic non-stock corporations with a fund balance or equity of not more than P100,000.
Meanwhile, non-filing of GIS or AFS by OPCs and domestic stock and non-stock corporations with retained earnings and fund balance/equity, respectively, of not more than P100,000 will incur a basic penalty of P10,000, plus P1,000 per month of continuing violation.
Foreign stock corporations with accumulated income/fund balance/members’ equity of less than P100,000 will incur a fine of P10,000 plus P6,000 late penalty, if their report is filed after 30 days, or P12,000 penalty, if filed after 60 days.
The base penalty for foreign non-stock corporations with less than P100,000 accumulated income/fund balance/members’ equity is at P5,000, plus P 6,000 penalty if filed after 30 days, or with an additional P12,000 penalty if filed after 60 days.
A fine of P10,000, plus a penalty of P12,000, shall be imposed for the non-filing of reports by both foreign stock and non-stock corporations with accumulated income/fund balance/members’ equity of less than P100,000.
The penalty for non-compliance with MC 28 is set at P20,000, double the previous rate of P10,000.