Recognizing the implications of the amendments of the Corporation Code of the Philippines, the New Era University College of Law (NEU-COL) held a webinar, “Salient Provisions of the Revised Corporation Code (RA 11232)” on January 22, 2021. Atty. Kelvin Lester Lee, the commissioner of the Securities and Exchange Commission (SEC) discussed the topic.
On February 20, 2019, President Rodrigo Duterte signed the Revised Corporation Code of the Philippines to simplify corporate governance standards. Some of the relevant changes on the legal framework of the Revised Code included the following.
1. The minimum number of shareholders, trustees, directors, and minimum capitalization requirements has been removed.
2. The number of incorporators may now be two to fifteen members. Also, artificial persons can now be incorporators.
3. Corporations now have perpetual existence unless the articles of incorporation provided a specific term otherwise. Existing corporations with expired terms may submit an application to the SEC for their renewal of existence.
4. One-Person Corporations may now be formed by a single shareholder. The law authorizes natural persons, estates, trusts to be a one-person corporation as the sole director and the president. On the contrary, banks, quasi-banks, insurance, trust, public, publicly-listed companies, non-chartered government-owned and controlled corporations may not form a One-Person Corporation.
5. The electronic system of filing and monitoring is enabled.
6. Shareholders may now participate in meetings through remote communication. Board meetings via video conferencing or other means of communication are allowed.
With these changes, Atty. Lee mentioned that almost anyone can form a corporation. The SEC has provided more business-friendly provisions that promote a healthy commercial environment. Moreover, corporations who want to retain their specific corporate terms should pass the requirements given by the SEC on or before February 23, 2021. For more information, they are encouraged to check the commission’s website: www.sec.gov.ph.