The Philippine Congress finally approved the bill which would amend the 38-year old Corporation Code of the Philippines. The lawmakers hope that the President will sign the bill into law early this year. Thereafter, once published, the amendments under the law become effective.
Implications for business in the Philippines
The corporate reforms seek to streamline doing business in the Philippines and create a more business and investor-friendly environment. The various amendments introduce policies that would enhance ease of doing business; rules that would prioritise corporate and stockholder protection; provisions that would instill corporate and civic responsibility; and amendments that would strengthen the country’s policy and regulatory corporate framework.
The following are some of the key reforms under the bill vis-à-vis the current provisions of the Corporation Code:
A single person, natural individual or juridical entity, may form a one-person corporation.
A corporation shall have perpetual term as a default option.
Minimum paid-in capital for ordinary corporations (e.g., those without nationality restrictions) is PHP62,500 (approximately USD1,179).
Alternative modes of communication in corporate meetings will be introduced and in some cases, votes may be cast in absentia.
In the event that a vacancy in the Board prevents the directors from constituting a quorum and immediate action is required to prevent grave substantial and irreparable loss to the corporation, the remaining directors may fill up the vacancy from the existing officers of the Corporation.
The bill will also require the adoption of an electronic filing system for reportorial requirements, and simplify the current name verification system of the Securities and Exchange Commission.
This alert is for general information only and is not a substitute for legal advice.