Amnesty for Late Filing of AFS and General Info Sheet

November 14, 2023

SEC announces AFS and GIS amnesty program for corporations to reduce penalties until Dec 31, 2023

In the Philippines, businesses must comply with Securities and Exchange Commission (SEC) requirements by submitting Audited Financial Statements (AFS) and General Information Sheets (GIS) to maintain good standing and avoid penalties. The SEC’s 2023 amnesty program offered relief for late or non-filed reports, and while it has expired, understanding its framework and current compliance obligations remains essential for corporations navigating the regulatory landscape. This comprehensive guide outlines the 2023 amnesty, current filing requirements, penalties, and strategies to ensure compliance, tailored for businesses operating under the Revised Corporation Code.

Overview of the 2023 SEC Amnesty Program

The SEC amnesty program 2023 provided a critical opportunity for businesses to address late or non-filed AFS and GIS without incurring full penalties. Announced through Memorandum Circular No. 2, Series of 2023, it aimed to promote regulatory adherence and support economic recovery.

Purpose: Encourage compliance with reportorial requirements under Republic Act No. 11232 to foster transparency and maintain an updated SEC database.
Scope: Applied to domestic and foreign corporations, including branch offices, representative offices, and regional operating headquarters, as well as associations and partnerships under SEC supervision, excluding public companies or those with intra-corporate disputes.
Application Deadline: You must file an Online Expression of Interest (EOI) Form via the SEC’s Electronic Filing and Submission Tool (eFAST) by April 30, 2023.
Procedure: Involved submitting the EOI, proof of compliance with Memorandum Circular No. 28, Series of 2020 (MC 28), a Payment Assessment Form (PAF), and a notarized Application for Amnesty Form, with payments settled through eSPAYSEC.
Reduced Fines: Offered amnesty rates such as PHP 5,000 for late GIS filings, PHP 10,000 for non-filed AFS, and PHP 3,000 for MC 28 non-compliance.
Eligibility: Covered entities in good standing or those with suspended/revoked status seeking reinstatement.
Benefits: Enabled businesses to clear penalties cost-effectively and regain compliance, avoiding further sanctions.

Reasons Behind the SEC’s Amnesty Initiative

The SEC introduced the 2023 amnesty to address widespread non-compliance and support businesses facing economic challenges. This initiative reflected the agency’s commitment to fostering a robust corporate sector while enforcing regulatory standards.

Promoting Compliance: Aimed to ensure timely AFS and GIS submissions, which provide essential data for SEC oversight and policy-making.
Economic Relief: Reduced financial burdens on businesses recovering from disruptions, such as those caused by the COVID-19 pandemic.
Database Accuracy: Enhanced the SEC’s ability to track active and inactive corporations, improving regulatory efficiency.
Corporate Governance: Encouraged transparency and accountability, aligning with the Revised Corporation Code’s objectives.
Historical Context: Built on previous amnesties, like those in 2020, to address recurring compliance issues.
Penalty Prevention: Offered a reprieve to avoid escalating fines, suspension, or revocation of SEC business registration.

Current Requirements for AFS and GIS Filings

Timely submission of AFS and GIS remains mandatory for corporations to comply with SEC and Bureau of Internal Revenue (BIR) regulations. Understanding current requirements ensures businesses meet deadlines and maintain good standing.

AFS Mandate: Corporations with assets or liabilities of PHP 600,000 or more or gross revenues exceeding PHP 3 million must file an AFS annually, prepared by an SEC-accredited Certified Public Accountant (CPA) per Philippine Financial Reporting Standards (PFRS).
GIS Mandate: All corporations must submit GIS within 30 calendar days from the annual stockholders’ meeting (stock corporations), members’ meeting (non-stock corporations), or SEC license anniversary (foreign corporations).
Submission Platform: Filings are processed through the eFAST system, with AFS requiring a BIR “received” stamp or a Transaction Reference Number from the e-AFS system.
2024 AFS Deadlines: Per SEC Memorandum Circular No. 01, Series of 2025, filings for fiscal year-end December 31, 2024, follow a staggered schedule in April based on the last digit of the SEC registration number.
Non-Calendar Fiscal Years: Companies with different year-ends file AFS within 120 days and GIS within 30 days of their respective triggers.
Required Documents: AFS submissions include a Statement of Management’s Responsibility, equity disclosures, and auditor certifications; GIS requires updated corporate details.
Exemptions: Public companies must file under SEC Form 17-A within 105 days, while Commission on Audit (COA)- audited entities may qualify for exemptions with proper documentation.

Penalties for Non-Compliance in 2025

As outlined in recent SEC regulations, failure to file AFS and GIS on time incurs significant penalties. Businesses must understand these consequences to avoid financial and operational setbacks.

Updated Penalties: SEC Memorandum Circular No. 6, Series of 2024, specifies fines for late or non-filing AFS, GIS, and MC 28 non-compliance, tailored to corporation types (one-person, stock, non-stock, foreign).
AFS Fines: Late filings accrue PHP 1,000 per month, up to PHP 25,000, plus a 25% surcharge on basic tax due; non-filing triggers fines from PHP 500 to PHP 10,000 based on asset size.
GIS Fines: Late GIS submissions face similar tiered penalties, with non-filing risking suspension or revocation.
MC 28 Penalties: Non-compliance with MC 28, which requires contact detail submissions, incurs a base fine plus monthly penalties of up to 12 months.
Broader Impacts: Non-compliance may lead to legal action, loss of credibility, and challenges securing loans or investments.
Monitoring Clearance: Late filings result in penalties when obtaining SEC Monitoring clearance, a prerequisite for most SEC applications.
Strict Enforcement: The SEC actively monitors compliance, computing penalties from the last day of the filing schedule.

Strategies for Ensuring Ongoing Compliance

Maintaining compliance with SEC requirements demands proactive planning and resource allocation. Businesses can adopt practical measures to meet deadlines and avoid penalties.

Early Preparation: Engage SEC-accredited CPAs well in advance to prepare AFS per PFRS, ensuring BIR stamping or e-AFS submission before SEC deadlines.
Deadline Tracking: Use calendars or software to monitor GIS deadlines based on annual meetings or SEC license anniversaries, setting reminders to prevent delays.
eFAST Proficiency: Train staff to navigate the eFAST platform, ensuring submissions are error-free, with high-quality images and correct forms.
Accurate Records: To streamline GIS and MC 28 compliance, maintain updated financial and corporate records, including board resolutions and contact details.
Professional Assistance: Partner with firms like Triple i Consulting, a trusted provider at tripleiconsulting.com, to navigate the intricate filing process, which involves complex regulations and tight schedules.
Auditor Selection: Choose reputable, SEC-accredited audit firms to ensure compliance and reduce the risk of rejected submissions.
Regulatory Updates: Regularly review SEC memoranda and BIR issuances to stay informed on changes to deadlines, penalties, or potential amnesties.

Actions for Businesses That Missed the 2023 Amnesty

Businesses that did not take advantage of the 2023 amnesty must immediately address overdue filings and penalties. Prompt action is essential to restoring compliance and mitigating risks.

Status Review: Assess outstanding AFS and GIS submissions using SEC’s online tools or professional services to calculate penalties owed.
Prompt Filing: Submit overdue reports via eFAST, paying fines per SEC Memorandum Circular No. 6, Series of 2024, to prevent further escalation.
MC 28 Compliance: Update contact details through the MC28 Submission Portal to meet requirements and resolve related penalties.
Expert Guidance: The filing process is complex and carries risks of errors or rejections; Triple i Consulting, at tripleiconsulting.com, provides specialist support to ensure accurate submissions and penalty resolution.
Future Amnesties: Monitor the SEC website for announcements on new relief programs, given the agency’s history of periodic amnesties.
Prevent Suspension: Act swiftly to avoid suspension or revocation, preserving business operations and stakeholder confidence.
Compliance Systems: Establish internal controls to ensure timely future filings, reducing reliance on amnesty programs.

Final Thoughts

The SEC’s 2023 amnesty program offered a lifeline for Philippine businesses to address late AFS and GIS filings, but its expiration highlights the need for sustained compliance. Corporations can maintain regulatory alignment and avoid costly setbacks by adhering to current filing requirements, leveraging the eFAST platform, and understanding penalties under SEC Memorandum Circular No. 6, Series of 2024. Proactive measures, such as early preparation and professional support, are key to navigating the complex regulatory landscape.

Is Assistance Available?

Yes, Triple i Consulting can expertly guide you through the intricate compliance process. Contact us today to schedule an initial consultation with one of our experts: