Key Compliance Requirements Under the
Revised Corporation Code

On February 20, 2019, President Rodrigo R. Duterte signed into law Republic Act No. 11232, otherwise known as the Revised Corporation Code of the Philippines (RCC). The law replaced the four-decade-old Batas Pambansa Blg. 68 (Corporation Code of 1980) and introduced sweeping changes to the regulatory framework governing Philippine corporations. Nearly six years after its effectivity, full understanding of the RCC's compliance requirements remains essential for incorporators, directors, officers, and legal counsel advising corporate clients.

This article surveys the most significant compliance obligations under the RCC and the rules issued by the Securities and Exchange Commission (SEC) implementing it. It is intended as a practical overview; specific situations should be assessed with the advice of qualified legal counsel.

I. Annual Reportorial Requirements

Section 177 of the RCC imposes annual reporting obligations on all corporations. Every domestic corporation is required to submit to the SEC, on an annual basis, the following documents:

• General Information Sheet (GIS) � must be filed within thirty (30) days from the date of the annual stockholders' or members' meeting. The GIS discloses the corporation's officers, directors, stockholders (including percentage of foreign ownership), authorized and subscribed capital stock, and other organizational data.
• Audited Financial Statements (AFS) � must be filed within 120 days from the end of the fiscal year for companies whose securities are not registered under the Securities Regulation Code, or as otherwise prescribed by the SEC. The AFS must be stamped by the Bureau of Internal Revenue (BIR) as received.
• Beneficial Ownership Report � required under SEC Memorandum Circular No. 15, Series of 2019, for certain categories of corporations (see Section III below).

Failure to file the GIS or AFS within the prescribed periods subjects the corporation to administrative fines. Persistent non-compliance may result in revocation of the corporate certificate of registration under Section 177 in relation to Section 178 of the RCC.

Annual Stockholders' or Members' Meeting

Under Section 49 of the RCC, all corporations must hold an annual meeting of stockholders or members on a date fixed in the by-laws. If the by-laws are silent, the meeting must be held on any date in April of every year as fixed by the board. The RCC, for the first time, expressly authorizes meetings to be held through remote communication or other alternative modes, provided the articles or by-laws permit it and the stockholders are able to participate and vote.

II. Perpetual Corporate Existence and Related Obligations

One of the most consequential changes introduced by the RCC is the shift from a fixed fifty-year corporate term to perpetual corporate existence. Under Section 11, a corporation shall now have perpetual existence unless its articles of incorporation provide otherwise. Corporations incorporated under the old Code with a fixed term that has not yet expired are deemed to have perpetual existence upon effectivity of the RCC, unless the stockholders vote to retain the fixed term.

The practical compliance implication is that the SEC required existing corporations to amend their articles of incorporation to reflect perpetual existence if desired. The SEC issued specific guidelines and reduced filing fees for these amendments during the transition period. Corporations that wish to revert to or retain a fixed term must affirmatively act to do so through a stockholders' meeting and an amendment of the articles.

III. Beneficial Ownership Disclosure

In compliance with the Philippines' commitments under the Financial Action Task Force (FATF) recommendations on corporate transparency, the RCC and its implementing rules now require disclosure of beneficial owners � those who ultimately own or control a corporation, even if the shares are held through nominees or intermediaries.

"A beneficial owner is a natural person who ultimately owns, controls, or has ultimate effective control over a legal person or legal arrangement."

Anti-Money Laundering Council (AMLC) Resolution No. 16, Series of 2021

Under SEC Memorandum Circular No. 15, Series of 2019, the following corporations are required to identify and disclose their beneficial owners in the GIS:

• Corporations whose shares are not listed on the stock exchange
• Corporations with foreign equity
• Corporations engaged in activities covered by the Anti-Money Laundering Act (AMLA)
• Corporations with assets exceeding ?50,000,000.00

A natural person is identified as a beneficial owner when he or she holds, directly or indirectly, twenty-five percent (25%) or more of the outstanding capital stock, or exercises actual control over the management, direction, or policies of the corporation. The corporation must maintain a registry of beneficial owners and make it available to authorized government agencies upon request.

IV. Director and Officer Qualifications

The RCC has modified and clarified the qualifications and disqualifications for directors, trustees, and officers. Key points:

Citizenship and Residency

Section 22 of the RCC repeals the prior requirement that at least a majority of directors must be residents of the Philippines. However, certain industries regulated by special laws (banking, insurance, public utilities) retain residency requirements under those special statutes. Directors must still own at least one (1) share of the capital stock of the corporation � a requirement that persists from the old Code.

Independent Directors

Under Section 22 in relation to SEC Memorandum Circular No. 9, Series of 2011 (as supplemented by subsequent issuances), corporations vested with public interest are required to have independent directors constituting at least twenty percent (20%) of the board. Corporations vested with public interest include those whose securities are listed on an exchange, those with assets exceeding ?50,000,000.00 and with at least 200 shareholders holding at least 100 shares each, and banks, insurance companies, and pre-need companies.

Disqualifications

Section 26 enumerates absolute disqualifications from serving as a director, trustee, or officer, including conviction by final judgment for an offense involving moral turpitude or punishable by imprisonment exceeding six years, or a finding of liability for violation of the Corporation Code within five years prior to election or appointment. The board is now also required to conduct due diligence on the qualifications of nominees and certify their eligibility.

V. The One Person Corporation (OPC)

Perhaps the most innovative feature of the RCC is the recognition of the One Person Corporation (OPC) under Sections 115 to 136. An OPC is a corporation with a single stockholder who may be a natural person, trust, or estate. It allows a sole proprietor to enjoy the benefits of corporate limited liability without the need for dummy incorporators or co-stockholders.

The single stockholder of an OPC serves as the sole director and president. He or she must appoint a nominee and an alternate nominee who will take over the management of the OPC in the event of the stockholder's death or incapacity. The nominee and alternate nominee must consent in writing and must be named in the articles of incorporation.

OPCs are required to submit an annual report to the SEC within ninety (90) days from the close of the taxable year, and to maintain complete accounting records. A designated officer must be appointed to perform the functions of a Corporate Secretary and Corporate Treasurer � two distinct functions that the sole stockholder cannot hold simultaneously.

VI. Electronic Meetings and Remote Voting

Section 49 of the RCC expressly authorizes all types of stockholders' and directors' meetings to be held through remote communication � such as videoconferencing or teleconferencing � if permitted by the articles of incorporation or by-laws. This statutory recognition, accelerated in its practical adoption by the COVID-19 pandemic, requires corporations to take affirmative steps to update their governing documents and establish reliable procedures for electronic participation and voting.

The SEC has issued guidelines (SEC Memorandum Circular No. 6, Series of 2020) requiring corporations to ensure the security of electronic meetings, maintain records of remote participation, and provide reasonable technical means for stockholders to participate in real time.

Conclusion

The Revised Corporation Code represents the most significant overhaul of Philippine corporate law in nearly four decades. Its compliance obligations � from updated annual reports and beneficial ownership disclosures, to new director qualifications and the OPC framework � require corporations and their counsel to revisit existing corporate documents and processes to ensure conformity with current law.

Corporations should undertake a comprehensive review of their articles of incorporation, by-laws, and internal governance policies in light of the RCC. Particular attention should be given to the transition provisions applicable to existing corporations: unremedied non-compliance with the RCC exposes directors, officers, and the corporation itself to administrative and civil liability under Section 158 et seq. of the law.

The legal landscape continues to evolve as the SEC issues additional implementing rules. Rimando Law Office advises clients on corporate compliance, SEC filings, and governance reviews. For inquiries specific to your corporation's circumstances, we encourage you to contact our office directly.

References: Republic Act No. 11232 (Revised Corporation Code of the Philippines, 2019); SEC Memorandum Circular No. 15, Series of 2019 (Beneficial Ownership); SEC Memorandum Circular No. 6, Series of 2020 (Electronic Meetings); AMLC Resolution No. 16, Series of 2021. This article is current as of March 2025.