A practical legal article on how to verify corporate existence, authority, compliance, and investment-solicitation legitimacy in Philippine practice.

1) Why “SEC-Registered” Is Not the Same as “Legitimate for Your Purpose”

In the Philippines, “SEC-registered” usually means the entity has been incorporated or registered with the Securities and Exchange Commission (SEC) and is recognized as a juridical person. That is only the first layer of legitimacy.

A company can be:

Validly incorporated but non-compliant (e.g., delinquent, revoked, or with reportorial lapses),
In good standing but not authorized to do what it is promising (e.g., soliciting investments or offering “guaranteed returns” without authority),
Properly existing but the person dealing with you lacks authority (fake officer, no board approval, forged documents),
Real but the transaction itself is void/voidable (ultra vires, violation of restrictions, prohibited investment scheme),
A legitimate company name used by impersonators (spoofed emails, fake certificates, cloned websites).

So legitimacy checks must match the risk and the transaction type (supplier onboarding vs. acquisition vs. lending vs. investing).

2) Core Legal Framework (Philippine Context)

A. Corporate existence and powers

Philippine corporations are governed primarily by the Revised Corporation Code (RCC). Corporations have:

Separate juridical personality,
Powers limited by law, Articles of Incorporation, and Bylaws, plus what is incidental/necessary to their business,
Governance through Board of Directors/Trustees, acting via board resolutions, implemented by officers/authorized representatives.

B. Securities offering and investment solicitation

Under Philippine securities regulation (e.g., Securities Regulation Code and SEC rules), a key dividing line is:

Ordinary commercial transactions (selling goods/services) vs.
Offering “securities” or investment contracts, soliciting the public, pooling funds, “profit-sharing,” or “guaranteed returns.”

A corporation may exist and still be unauthorized to:

Sell/offer securities to the public without proper registration/exemptions,
Operate as a broker/dealer/investment company or similar regulated entity without the proper SEC license,
Run what is effectively a Ponzi or other prohibited investment scheme.

C. Foreign participation, regulated industries, and special restrictions

Some businesses require additional approvals or are subject to foreign equity limits (e.g., certain public utilities, education, mass media, etc.). A corporation can be SEC-registered but still non-compliant with sector rules or foreign ownership restrictions.

3) The Four-Layer Legitimacy Model (Use This as Your Map)

When you “legitimacy-check” an SEC-registered company, you are usually trying to confirm four things:

Identity & Existence Is the entity real, correctly named, and currently existing?
Good Standing & Compliance Is it compliant with SEC reportorial requirements and not delinquent/revoked/suspended?
Authority & Capacity for the Transaction Does it have corporate power to enter into this deal, and is the signatory properly authorized?
Regulatory Permission for the Activity For regulated activities (especially investment solicitation), does it have the right secondary licenses/permits/approvals?

Each layer has its own documents and red flags.

4) Baseline Checks (What You Should Do in Almost Every Case)

A. Verify the exact corporate identity

Ask for and cross-check:

Full registered corporate name, including suffix (Inc., Corp., OPC, Foundation, etc.)
SEC registration number
Date of incorporation/registration
Registered office address
Primary purpose (from Articles)

Why it matters: Many scams rely on near-identical names or misuse of a real company’s registration details.

B. Obtain certified or reliable copies of core corporate documents

Request:

Certificate of Incorporation / Registration
Articles of Incorporation (and all amendments)
Bylaws (if applicable)
Latest General Information Sheet (GIS)
Latest Audited Financial Statements (AFS) (if required for their type)

Practical tip: For higher-risk deals, ask for documents certified by the SEC or with a verifiable issuance chain, not just screenshots.

C. Check SEC reportorial compliance status (good standing / delinquency)

Corporations that fail SEC reportorial requirements can become:

Delinquent,
Revoked, or
Suspended in ways that can affect deal enforceability and risk.

At minimum, ask the company to provide:

Proof of recent SEC filings (GIS/AFS) and
A representation/warranty that it is in good standing and not subject to SEC orders.

If you can, independently validate the status through official SEC channels (the most reliable method is direct SEC verification, not third-party “business directory” sites).

5) Transaction Authority Checks (Most Fraud Happens Here)

Even with a valid corporation, your contract can be attacked if the wrong person signed, or if approvals were missing.

A. Confirm the signatory’s authority

Require:

Secretary’s Certificate (or equivalent) stating:
- board approval of the transaction, and
- the authorized signatory/ies and their specimen signatures.
The underlying Board Resolution (or excerpt) if the deal is material.
Valid government ID of signatory; compare signatures.

For big-ticket or high-risk deals, add:

Notarization of the Secretary’s Certificate,
Verification of the corporate secretary’s incumbency,
A requirement that the certificate reference a specific board meeting date and quorum.

B. Check for “ultra vires” or restricted acts

Review the Articles’:

Primary and secondary purposes,
Any restrictions on borrowing/guarantees, real estate dispositions, etc.

If the transaction is outside their purposes or requires special approvals, you want:

evidence of the required approvals, or
deal structure adjustment (e.g., affiliate/authorized entity signs instead).

C. Validate who really controls the company

Use the GIS and related disclosures to identify:

Directors/trustees and officers,
Major shareholders,
Potential beneficial owners (where disclosed/required).

This helps prevent:

dealing with impostors,
hidden conflict-of-interest,
sanctions/reputational exposure.

6) The Big One: Legitimacy Checks for Investment Offers and “Guaranteed Returns”

If your interaction involves placing money expecting profit, especially with promised returns, treat it as a potential securities/investment-contract scenario.

A. Questions that trigger “enhanced scrutiny”

Be on high alert if you see:

“Guaranteed” fixed returns, “risk-free,” “principal protected,” “double your money,”
Passive investment where you do nothing and expect profit,
Pooling funds, “trading,” “asset management,” “profit sharing,”
Recruitment incentives (referral commissions),
Claims of “SEC registered” used as the main proof of legitimacy.

B. What to demand (minimum)

What exactly is being sold? Ask for a term sheet/contract describing the product: equity, notes, bonds, profit-sharing, partnership interest, etc.
What is the legal basis to offer it? Ask for proof of:
- SEC registration of securities (if applicable), or
- exemption basis (and documentation), and/or
- secondary license (if the entity is acting as broker/dealer/investment company/financing company, etc., depending on structure).
Who is authorized to solicit? Ask for proof the individual seller/agent is properly authorized/registered where required.

C. SEC registration of the company is not a license to solicit investments

A corporation’s existence does not automatically mean it can:

Offer securities to the public,
Collect investments from multiple persons,
Operate a pooled investment scheme,
Market “investment contracts” broadly.

If they lean heavily on “SEC-registered company” but avoid providing specific authority for the investment activity, treat that as a major red flag.

7) Compliance, Integrity, and Red-Flag Checklist (Philippine Practice)

A. Document integrity red flags

Certificates with inconsistent fonts, spacing, seals, or obvious edits,
SEC numbers that don’t match the entity name (or match a different entity),
Corporate name differs from contract name (missing suffix, wrong punctuation, old name),
Refusal to provide Articles/GIS/AFS or excuses like “confidential” for basic identity items.

B. Behavioral red flags

Pressure tactics (“limited slots,” “must pay today”),
Payment requested to personal accounts or unrelated entities,
Vague explanation of how profits are generated,
Overemphasis on “registered” and underemphasis on business fundamentals and lawful authority,
“Guaranteed returns” without clear risk disclosure.

C. Structural red flags

Complex chains with offshore entities with no clear rationale,
“We’ll sign later” / “board resolution to follow”,
Contracting party is different from who receives your funds,
“Special purpose vehicle” that is newly formed, thinly capitalized, no track record.

8) Deep-Dive Due Diligence (When the Stakes Are High)

Use these for acquisitions, large supply contracts, financing, joint ventures, or major investments.

A. Legal and litigation checks

Ask for disclosure of:
- Pending cases, adverse judgments, insolvency indicators,
- Material regulatory investigations.
Consider obtaining:
- Court/litigation checks (where practical),
- Notarized disclosures and indemnities.

B. Financial checks

Review audited financials for:
- Going concern notes,
- Related-party transactions,
- Revenue recognition inconsistencies,
- Sudden spikes in receivables,
- Cash flow mismatch vs claimed profitability.

C. Regulatory and permits

Depending on industry:

Local government permits (Mayor’s permit, barangay clearance),
BIR registration and invoices/receipts capability,
Sector regulators (e.g., financial, insurance, real estate development, lending/financing, etc.).

A common failure mode is a real corporation operating without necessary permits/licenses.

9) Contract Protections You Should Build In

Even after due diligence, protect yourself contractually:

A. Representations and warranties

Include statements that:

Company is duly organized and in good standing,
Signatory has authority,
Transaction does not violate law, charter, or third-party contracts,
All required licenses/permits exist and are valid,
No undisclosed investigations/litigation that materially affect performance.

B. Conditions precedent

Make effectiveness conditional on receiving:

Secretary’s Certificate + Board Resolution,
Copies of SEC filings,
Proof of required licenses (if regulated),
Proof of proper bank account in company name.

C. Payment controls

Pay only to company accounts matching the contracting entity,
Staged payments upon milestones,
Escrow for high-risk transactions.

D. Remedies and exit

Termination rights for misrepresentation,
Refund/return obligations,
Indemnity provisions,
Liquidated damages (where appropriate),
Dispute resolution clause and venue.

10) If You Suspect a Scam or Illegal Investment Scheme

Practical steps

Stop payments; document communications.
Demand written clarifications and documents (authority, licenses).
Preserve evidence (receipts, chat logs, emails, wallet addresses, bank details).
Consider reporting to appropriate authorities depending on the nature:
- SEC (for investment solicitation concerns),
- Law enforcement (for fraud),
- Your bank/payment provider (for potential recovery steps).

Legal posture

If the offer is an unlawful securities offering or a prohibited scheme, contracts may be unenforceable in the scammer’s favor, but you may still have civil, criminal, and regulatory remedies depending on facts.

11) A Practical “Request List” You Can Send to Any SEC-Registered Counterparty

Tier 1 (basic onboarding):

Certificate of Incorporation/Registration
Articles of Incorporation + amendments
Latest GIS
Valid IDs of signatory
Secretary’s Certificate authorizing the transaction and signatory
Proof of business address and contact details

Tier 2 (material transactions): 7. Latest AFS and interim financials 8. Board Resolution excerpt (or full resolution) 9. Disclosure of litigation/regulatory actions 10. Major permits/licenses relevant to the activity 11. Bank certification of company account (for payment destination)

Tier 3 (investment-related): 12. Document explaining the product (security/investment) 13. Proof of SEC authority to offer/sell (registration/exemption) 14. Proof of any required secondary licenses 15. Proof of authority/registration of the person soliciting

12) Key Takeaways

SEC registration confirms existence, not necessarily compliance, authority, or permission to solicit investments.
The most important practical checks are: (a) corporate identity and status, (b) signatory authority, and (c) regulatory permission for the specific activity.
If money is solicited with promised returns, do enhanced checks: ask what the product is, what legal basis allows the offer, and who is licensed/authorized to sell.
Pair diligence with solid contract protections and payment controls.

This article is for general information and practical due-diligence education in the Philippine context and is not legal advice. For high-value or high-risk matters, consult counsel to tailor checks and documents to your transaction and risk profile.