In the Philippine legal and business landscape, verifying a company’s registration with the Securities and Exchange Commission (SEC) is a vital component of due diligence. Whether you are entering a joint venture, considering an investment, or validating a potential employer, confirming a corporation's legal personality ensures that the entity exists under the Revised Corporation Code of the Philippines.
1. The Importance of Legal Personality
Registration with the SEC grants a "juridical personality" separate and distinct from its stockholders or members. Without this registration, a group cannot legally operate as a corporation or partnership in the Philippines.
Critical Distinction: A Primary Registration (Certificate of Incorporation) allows a company to exist and operate. However, a Secondary License is strictly required for companies engaging in specialized activities, such as lending, financing, investment house functions, or the sale of securities to the public.
2. Primary Methods of Verification
A. SEC eSPARC (Search Facility)
The Electronic Simplified Processing of Application for Registration of Company (eSPARC) is the SEC’s primary online portal.
- How to use: Users can access the "Search Company Name" feature without logging in to check if a name is already registered or reserved.
- Information provided: It will generally show if a company name exists in the SEC database, preventing the use of identical or confusingly similar names.
B. SEC Express System
For those requiring physical or authenticated proof of a company’s status, the SEC Express System is the official document procurement service.
- Request Documents: You can request a company's General Information Sheet (GIS), Articles of Incorporation, or a Certificate of Corporate Filing/Good Standing.
- Verification: The GIS is particularly useful as it lists the current directors, officers, and capital structure of the company.
- Delivery: Documents are requested online and delivered to the user’s address for a fee.
C. SEC Check App
The SEC has launched a mobile application specifically designed to protect the public from investment scams. The app allows users to quickly verify if a company is registered and, more importantly, if it has the necessary permits to solicit investments.
3. Verifying Investment Authority (Secondary License)
A common misconception is that a basic SEC Registration allows a company to invite the public to invest. This is false. Under the Securities Regulation Code (SRC), any entity selling securities must:
- Be a registered corporation.
- Have a secondary license/permit to sell securities.
- Register the specific securities being offered.
To verify this, one should check the SEC List of Registered Investment Companies or the List of Entities with Secondary Licenses on the official SEC website.
4. Checking for Advisories and Revocations
The SEC’s Enforcement and Investor Protection Department (EIPD) regularly issues advisories against entities that are found to be operating illegally or engaging in "Ponzi" schemes.
- SEC Advisories: Check the "Advisories" section on the SEC website. Even if a company is registered, an advisory may have been issued for unauthorized activities.
- Revoked/Suspended Status: The SEC periodically publishes lists of companies whose registrations have been revoked for failure to file annual reports (e.g., General Information Sheets or Audited Financial Statements) for several consecutive years.
5. Comparative Summary of Registration
| Feature | SEC Registration (Corporation/Partnership) | DTI Registration (Sole Proprietorship) |
|---|---|---|
| Legal Status | Juridical person (separate from owner) | Trade name only (owned by an individual) |
| Governing Law | Revised Corporation Code | Act No. 3883 |
| Verification Agency | Securities and Exchange Commission | Department of Trade and Industry |
| Key Document | Certificate of Incorporation | Business Name Certificate |
6. Step-by-Step Summary for Due Diligence
- Search the Name: Use the eSPARC or SEC Check App.
- Review the Purpose: Check the "Primary Purpose" in the Articles of Incorporation. A company registered for "Wholesale Trade" cannot legally operate as a "Lending Company."
- Verify the GIS: Ensure the people you are dealing with are the officially declared directors and officers.
- Check for Scams: Search the company name in the SEC Advisories database.
- Confirm Secondary License: If they are asking for money with a promise of returns, ask for their Certificate of Permit to Offer Securities for Sale.
Would you like me to draft a formal letter of request to the SEC to obtain a certified true copy of a specific company's General Information Sheet?