The House of Representatives has approved on second reading a bill seeking to amend the 38-year old Corporation Code of the Philippines.
“Our current Corporation Code was enacted in 1980. Obviously, much has changed in how the world does business, communicates, and undertakes commercial transactions over the last 38 years,” said Camiguin Rep. Xavier Jesus Romualdo, principal author and sponsor of the measure.
Romualdo said that House Bill 8374 or the Revised Corporation Code would allow for the perpetual existence of corporations and the removal of the minimum number of incorporators and subscribed and paid-in capital stock requirements for purposes of incorporation.
Key provisions include the formation of one-person corporations, expanding the right of stockholders to inspect corporate books, and allowing stockholders and directors to remotely participate and vote during meetings.
The bill also strengthens the Securities and Exchange Commission (SEC) via additional powers to enforce the Code and investigate and penalize violations.
The current Code currently requires five to 15 incorporators who must each be a subscriber to at least one share of the capital stock of the corporation. Corporations formed or organized under this Code may also either be stock or non-stock corporations.
“By updating and modernizing our main body of corporate law, the Revised Corporation Code will encourage entrepreneurship and the creation of new businesses, contribute to ease of doing business, strengthen corporate governance, better protect the rights of stockholders, deter corporate abuse and fraud, and bolster anti-corruption measures and the regulatory authority of the Securities and Exchange Commission,” Romualdo said.
The Senate already approved its version, SB1280, last August.
Romualdo said the House was likely to approve HB 8374 on third and final reading when it resumes session on November 12.
Both chambers could approve a reconciled version later that month and the bill could be signed into law by President Rodrigo Duterte in December.