In the Philippine business landscape, dealing with a legally registered entity is the first line of defense against fraud and investment scams. The Securities and Exchange Commission (SEC) is the primary regulatory agency tasked with the registration, licensing, and monitoring of all corporations and partnerships in the country.
Understanding how to verify a corporation’s status is essential for investors, business partners, and consumers alike.
1. The Importance of the Certificate of Incorporation
A corporation only acquires a legal personality—the right to exist and operate as a separate legal entity—upon the issuance of a Certificate of Incorporation by the SEC.
- Primary Registration: This proves the company is registered as a corporation.
- Secondary License: It is crucial to note that a basic registration does not automatically authorize a company to solicit investments from the public. For that, a "Secondary License" or a "Permit to Sell Securities" is required.
2. Methods to Verify SEC Registration
There are several ways to confirm if a Philippine corporation is in good standing:
A. The SEC Check App and Online Portal
The most efficient way to verify a corporation is through the SEC Check App (available on mobile) or the SEC Company Registration and Monitoring System (CRMS).
- Users can search for a company by its registered name or its SEC Registration Number.
- The system will display the company's status (e.g., Registered, Revoked, or Suspended).
B. SEC Express System
For those requiring official documents, the SEC Express System allows individuals to request copies of a corporation’s General Information Sheet (GIS) or Articles of Incorporation.
- GIS: This document is filed annually and contains the names of current directors, officers, and stockholders, as well as the company’s business address.
C. Verification via the Enforcement and Investor Protection Department (EIPD)
If you suspect a company is involved in illegal investment schemes, you can contact the EIPD. They maintain a public list of companies with Revoked Registrations and those issued with Cease and Desist Orders (CDO).
3. Red Flags of Fake Registration
A company may present a document that looks like an SEC certificate, but it could be fraudulent or misleading. Watch for these signs:
- Expired or Revoked Status: A company may have been registered once, but failed to file annual reports, leading to the revocation of its corporate franchise.
- Missing Secondary License: If a company is asking you to invest money for a "guaranteed return" but only shows a primary SEC Certificate of Incorporation, they are likely operating illegally.
- Discrepancies in Name: Ensure the name on the contract matches the SEC-registered name exactly. Scammers often use names similar to well-known, reputable firms.
4. Summary Checklist for Verification
| Step | Action | Purpose |
|---|---|---|
| 1 | Request the SEC Registration Number | To facilitate a precise search in the database. |
| 2 | Check the SEC Online Database | Confirm the company is currently "Active." |
| 3 | Verify the Purpose | Ensure the "Primary Purpose" in the Articles of Incorporation matches their actual business. |
| 4 | Look for the Secondary License | Mandatory if the company is selling securities or investment contracts. |
| 5 | Check for Advisories | Search the SEC website for "Investor Advisories" regarding the entity. |
Legal Consequences of Non-Registration
Engaging in business as a corporation without valid registration is a violation of the Revised Corporation Code of the Philippines. Furthermore, entities soliciting investments without the necessary secondary license violate the Securities Regulation Code (SRC), which carries heavy fines and potential imprisonment for its directors and officers.