Revised corporation code signed

By Bernadette D. Nicolas, BusinessMIrror, Feb 21, 2019

PRESIDENT Duterte signed into law on Thursday a landmark measure updating the decades-old Corporation Code in a bid to strengthen and simplify corporate governance standards for a more business-friendly environment.

The timely enactment of the law is also seen to reverse the decline in the country’s ranking in the latest Ease of Doing Business Report of the World Bank, wherein the Philippines dropped from 113th to 124th out of 190 economies.

“I also sign today the Revised Corporation Code, which seeks to simplify corporate governance standards and establish a more business-friendly environment that will enable corporations and other juridical entities to thrive,” Duterte said in a speech during the ceremonial signing of the measure in Malacañang.

Under the old law, Senate Minority Leader Franklin M. Drilon earlier said it is “too difficult” to open a business in the country, citing the numerous and stringent incorporation and regulatory requirements.

This discouraged investors and Filipino entrepreneurs from entering the local market.

The new Corporation Code will improve ease of doing business in the country by allowing a one-person corporation, removing the minimum capital requirement and providing for a perpetual existence of corporation.

Since the new code allows a one-person corporation, local business owners and investors could also stop the practice of naming the entire household as incorporators simply to comply with the stringent requirement of the law.

Moreover, the new code also allows a one-person corporation to apply for loans and grants.

The new code also introduces provisions that seek to remove the minimum number of incorporators, permit the electronic filing of reportorial requirements and attendance in meetings via remote communication or in absentia, among others—practices that were not recognized in the old law.

It also aims to strengthen corporate governance standards and provide protection to minority stakeholders by requiring among others, corporations vested with public interest to have independent directors.

P4-B BSP dividends

In a related development, the Bangko Sentral ng Pilipinas (BSP) also remitted P4 billion in partial dividends to the national government.

“This will come a long way [in] funding priority programs of the administration,” Duterte said.

The turnover of BSP dividends came after the President signed the amended BSP charter to strengthen BSP’s financial stability and grant it more flexibility in the exercise of its regulatory powers.