On 20 February 2019, Philippine President Rodrigo Duterte signed into law Republic Act (RA) No. 11232 or the Revised Corporation Code of the Philippines (Revised Code). The Revised Code expressly repeals Batas Pambansa Blg. 68 or the Corporation Code of the Philippines, and aims to improve the ease of doing business in the country.
The Revised Code took effect on 23 February 2019.
What the regulation says
The Revised Code initiates significant changes to the legal framework for the registration and operation of private corporations in the Philippines, including the following:
A. Simplifying Corporate Registration
The Revised Code simplifies the requirements to set-up and register a corporation with the SEC. The provisions of the new law likewise expressly recognize the importance of technology and its use to facilitate government and internal corporate processes.
B. Strengthening Corporate Governance
The Revised Code also aims to improve corporate governance and protection of minority shareholders, through the following provisions:
C. Other Important Provisions
Other notable amendments introduced by the new law include the following:
Actions to Consider
Clients are advised to (1) familiarize themselves with changes to the requirements and procedures brought about by the Revised Code, and (2) consider how to incorporate the new arrangements initiated by the Revised Code in their business model and operations. The Revised Code grants a grace period of two years, from the Revised Code’s effectivity, for existing corporations to comply with the new requirements of the new law.
Quisumbing Torres may continue to assist you in understanding this new law, and how its provisions may impact your business.
 (a) Corporations covered by Section 17.2 of Republic Act No. 8799, otherwise known as “The Securities Regulation Code”, namely those whose securities are registered with the Commission, corporations listed with an exchange or with assets of at least Fifty Million Pesos (PhP 50,000,000) and having two hundred (200) or more holders of shares, each holding at least one hundred (100) shares of a class of its equity shares;
(b) Banks and quasi-banks, nonstock savings and loan associations, pawnshops, corporations engaged in money service business, preneed, trust and insurance companies, and other financial intermediaries; and
(c) Other corporations engaged in the businesses vested with public interest similar to the above, as may be determined by the Commission, after taking into account relevant factors which are germane to the objective an purpose of requiring the election of an independent director, such as the extent of minority ownership, type of financial products or securities issued or offered to investors, public interest involved in the nature of business operations and other analogous factors.