IN AN ERA when almost any information can be found through the Internet, a not-so-techie person can get lost in a myriad of information available on the Web. In some cases, searching for information requires a bit of navigational skill in order to get you through the stack of unnecessary search results appearing on your browser. It would be a lot easier if someone would just drop the specific uniform resource locator (URL) or Web site address needed to lead us straight to the desired location.
Similarly, in business, information such as the address of a company as appearing in corporate documents provide the means by which customers, suppliers, the government and other interested parties can identify and locate the company.
Hence, the office address can’t just be a vague location. A general address such as “Metro Manila” may prove unreliable especially for parties who need to contact or locate the company for reasons that may be critical to the operations of the business. For tax purposes, the specific address is necessary to serve summons from the court, or notices from the Bureau of Internal Revenue (BIR) in case of assessments, etc.
Recognizing the importance of indicating a specific address, earlier this year, the Securities and Exchange Commission (SEC) issued Memorandum Circular (MC) No. 6-2014, pursuant to MC 3-2006, requiring all registered corporations and partnerships to state in their Articles of Incorporation (AOI) or Articles of Partnership (AOP), the specific address of their principal office, which shall include, if feasible, the street number, street name, barangay, city or municipality.
Affected corporations and partnerships are given until Dec. 31 to amend their respective charters. In case of failure to comply, the corporation or partnership shall not be penalized but the SEC can impose sanctions by not acting on their applications (e.g. amendments, certifications, clearance, etc.).
To ease the burden on the affected entities, however, the SEC recently issued MC 16-2014. Under the new MC, in the event that the principal address of a corporation as indicated in its AOI is already specific, complete and compliant with the full disclosure requirements of the SEC, such corporation is no longer required to file an amended AOI if it has moved or should it move to another location within the same city or municipality.
Instead, under the new issuance, a firm need only declare its new or current specific address in its General information Sheet (GIS) within 15 days of transferring to its new location or the effectivity date of MC 16-2014, which will be on Jan. 1, 2015.
Needless to say, though expressly stated in the MC for the avoidance of doubt, in case the corporation transfers its principal office to a city or municipality different from its former address, it is still required to file an amended AOI to indicate its new location in another city or municipality. “Metro Manila” shall not be considered a city or municipality for purposes of interpreting the relocation rule under MC 16-2014. Nevertheless, should they choose to, the concerned corporations are not precluded from filing an amended AOI to indicate their new location within the same city or municipality of their former address.
Failure to file the GIS within the prescribed period will constitute a violation of Section 16 of the Corporation Code (covering Amendment of AOI) and will be subject to the imposition of penalty in accordance with the SEC’s existing scale of fines. In the case of a partnership, since it has no obligation to file the GIS, it is still required to file an amended AOP every time it transfers to a new location regardless of whether the new address is within the same or in another city or municipality.
To clarify that non-compliance with the updating requirements will not prejudice the SEC, the MC expressly provides that corporations and partnerships shall be deemed to have been duly notified or validly served where the SEC has sent its subpoena, summons, notice, show cause letter, and other communications to the address indicated in the AOI or AOP, and/or GIS, as the case may be.
It is worth noting that any amendment of a corporation’s AOI must be approved by a majority vote of the members of the board of directors and by the vote or written assent of stockholders representing at least two-thirds of the outstanding capital stock. Thus, in issuing MC 16-2014, the SEC aims to dispense with the tedious process and costs involved in reflecting the new address if the corporation remains within the same city or municipality. Hopefully, these less stringent rules would facilitate compliance with the SEC’s requirements.
The views or opinions presented in this article are solely those of the author and do not necessarily represent those of Isla Lipana & Co. The firm will not accept any liability arising from the article.
Mae Ann S. Acha is a senior consultant at the Tax Services Department of Isla Lipana & Co., the Philippine member firm of the PwC network. (02) 845-2728
mae.ann.s.acha@ph.pwc.com
source: Businessworld
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