In an era of rising investment scams and "fly-by-night" entities, verifying the legal status of a company is a fundamental step in due diligence. In the Philippines, the primary regulatory body tasked with the registration and supervision of corporations and partnerships is the Securities and Exchange Commission (SEC).

Operating a business as a corporation or partnership without SEC registration is not only a regulatory violation but also a significant red flag for consumers, investors, and employees.

I. The Significance of SEC Registration

Registration with the SEC grants an entity its juridical personality. This means the company is recognized by law as an existence separate from its owners, allowing it to enter into contracts, own property, and sue or be sued.

Primary Registration: Refers to the "Birth Certificate" of the company (Certificate of Incorporation). It allows a company to exist but does not necessarily authorize it to engage in specialized activities.
Secondary License: For entities engaging in specialized activities—such as lending, financing, investment houses, or selling securities to the public—a Secondary License or a Certificate of Authority is mandatory.

II. Methods to Check SEC Registration

There are several official channels provided by the SEC to verify the status of an entity:

1. The SEC Company Registration Portal (Espatially)

The SEC has transitioned most of its verification processes to online platforms. The SEC Check App and the Electronic Simplified Processing of Agricultural Corporations (eSPARC) portal are the primary tools for real-time verification.

Users can search for a company name to see if it exists in the SEC database.
A successful search will typically yield the company's SEC Registration Number and its current status (e.g., Active, Revoked, or Suspended).

2. SEC List of Registered Corporations

The SEC periodically publishes and updates lists of registered corporations on its official website (sec.gov.ph). These lists are often categorized by industry or by the date of registration.

3. Verification of Secondary Licenses

If a company is soliciting investments, a simple SEC Registration is insufficient. You must check the "List of Entities with Secondary Licenses." This is critical for:

Lending and Financing Companies.
Brokers and Dealers in Securities.
Investment Companies/Mutual Funds.

4. The SEC "Advisory" Section

Before dealing with a company, it is prudent to check the SEC Advisories page. The Commission regularly issues warnings against entities that are found to be soliciting investments without the proper permits or those operating under "Ponzi" schemes.

III. Red Flags and Common Deceptions

Understanding how to read the data is as important as finding it. Be wary of the following:

"Registration in Progress": A company that claims its papers are "still being processed" while actively soliciting investments is operating illegally.
Using a Parent Company’s License: A subsidiary or a branch must often have its own specific authority or be clearly covered under the parent's registration.
Misuse of Articles of Incorporation: Scammers often show their Articles of Incorporation as proof of authority to take investments. In reality, these documents merely prove the company exists; they do not grant the right to sell securities or investment contracts.
Expired/Revoked Status: Always check if the registration is "Active." The SEC frequently revokes the registration of companies that fail to file General Information Sheets (GIS) or Annual Financial Statements (AFS).

IV. Requesting a Certificate of Good Standing

For formal legal or business purposes, one can request a Certificate of No Derogatory Information or a Certificate of Good Standing from the SEC. This document serves as official Manila-issued proof that the corporation has complied with all reportorial requirements and is not facing any pending revocation proceedings.

V. Legal Recourse

If a company is found to be operating without the necessary SEC registration or secondary license, individuals may report the entity to the SEC Enforcement and Investor Protection Department (EIPD). Under the Securities Regulation Code (SRC), unauthorized solicitation of investments is a criminal offense punishable by heavy fines and imprisonment.