In the Philippine legal landscape, incorporating a foundation requires strict adherence to the Revised Corporation Code (RCC) and the specific regulations set forth by the Securities and Exchange Commission (SEC). One of the most critical documents in this process is the Treasurer’s Affidavit. This sworn statement serves as the official certification that the proposed foundation has received the necessary initial funds to support its charitable or social welfare objectives.
1. The Legal Nature of a Foundation
Under Philippine law, a foundation is a non-stock, non-profit corporation established for charitable, religious, educational, athletic, cultural, or social welfare purposes. Unlike ordinary non-stock corporations, foundations are subject to more stringent financial requirements to ensure they possess the "seed money" necessary to operate without immediate reliance on public donations.
2. The Minimum Capital Requirement
While the Revised Corporation Code (RA 11232) generally removed the minimum capital stock requirement for many corporations, the SEC maintains specific rules for foundations.
- Minimum Initial Contribution: To incorporate a foundation, the SEC requires an initial contribution of at least PHP 1,000,000.00.
- Purpose of the Fund: The Treasurer’s Affidavit must explicitly state that this amount has been paid and received to be held in trust for the corporation.
3. Mandatory Contents of the Affidavit
A validly drafted Treasurer’s Affidavit for a foundation must contain the following specific declarations:
A. Identification of the Affiant
The document must clearly state the name, citizenship, and residence of the person elected as the Temporary Treasurer. It must also state that they have been elected by the incorporators to act as such until a regular Treasurer is appointed under the bylaws.
B. Certification of Funds
The heart of the affidavit is the certification of the initial contribution. It must state:
- The total amount of the contribution (not less than PHP 1,000,000.00).
- That the amount has been paid in cash (or property, though cash is the standard for initial foundation funding).
- That the money is held in trust for and to the credit of the proposed foundation.
C. Authority to Examine
The affidavit must include a categorical statement authorizing the SEC to examine the bank account where the funds are deposited. This is often supplemented by a Bank Certificate of Deposit issued in the name of the Treasurer "in trust for" the proposed foundation.
4. Formal Drafting Requirements
To be accepted by the SEC, the affidavit must follow specific formal guidelines:
| Requirement | Description |
|---|---|
| Language | Generally drafted in English, the official language of Philippine corporate law. |
| Verification | It must be a sworn statement (Affidavit) and not a mere certification. |
| Notarization | It must be acknowledged before a Notary Public, including a Jurat where the affiant presents a valid government-issued ID. |
| Consistency | The amount stated must perfectly match the figures indicated in the Articles of Incorporation. |
5. Specific SEC Compliance for Foundations
Beyond the standard affidavit, the SEC requires foundations to submit additional documents that relate back to the Treasurer’s representations:
- Modus Operandi: A detailed description of how the foundation will utilize its funds to achieve its goals.
- Source of Funds: An explanation of where the initial PHP 1,000,000.00 originated (e.g., donations from incorporators).
- Certificate of Deposit: A bank certification confirming that the funds are actually in the bank.
6. Common Pitfalls to Avoid
- Insufficient Amount: Attempting to incorporate a foundation with less than PHP 1,000,000.00. While other non-stock corporations may have lower thresholds, foundations are held to this specific SEC memorandum circular requirement.
- Missing "In Trust" Language: Failing to specify that the Treasurer holds the money specifically for the benefit of the corporation-in-formation.
- Outdated ID: Using an expired ID for the Notary Public's acknowledgment, which will lead to the rejection of the entire incorporation package.
7. Legal Basis and Authority
The requirements for the Treasurer’s Affidavit are derived from:
- Republic Act No. 11232: The Revised Corporation Code of the Philippines.
- SEC Memorandum Circular No. 8, Series of 2006: Which specifically provides for the PHP 1,000,000.00 minimum fund for foundations.
- The 2004 Rules on Notarial Practice: Governing the execution and validity of the sworn statement.