SEC CERTIFICATE OF AUTHORITY VALIDATION IN THE PHILIPPINES A Comprehensive Legal Guide (2025 Edition)
1. What Is a “Certificate of Authority” (CA)?
In Philippine corporate practice, a Certificate of Authority is a secondary license issued by the Securities and Exchange Commission (SEC) that authorizes a corporation—already registered with a primary Certificate of Incorporation—to operate a regulated line of business.
For most entrepreneurs, “CA” specifically refers to the license required by:
| Regulated entity | Governing law | Key provision requiring a CA |
|---|---|---|
| Financing Company | Republic Act (RA) 5980, as amended by RA 8556 | §4, §5 |
| Lending Company | RA 9474 (Lending Company Regulation Act of 2007) | §4 |
| (Less often) Microfinance NGO | RA 10693 + its IRR | §8 (Certificate of Authority issued by Microfinance NGO Regulatory Council, not the SEC) |
2. Legal Framework
Primary statues
- RA 5980 (Financing Company Act) as amended by RA 8556
- RA 9474 (Lending Company Regulation Act)
- The Corporation Code of the Philippines (RA 11232) for basic corporate capacity
Implementing rules & SEC circulars (non-exhaustive):
- SEC Memorandum Circular (MC) No. 19-2019 – Revised Rules on Financing Companies
- SEC MC No. 18-2019 – Amended IRR of RA 9474
- SEC MC No. 19-2021 – End-to-End Digital Processing of Company Registration via eSPARC
- SEC MC No. 10-2021 – Moratorium & additional disclosure rules for Online Lending Platforms (OLPs)
- SEC MC No. 19-2022 – Mandatory QR-code authentication on all newly-issued licenses
Related regulations
- BSP Circular 1133-2021 (interest-rate caps on small-value loans)
- Anti-Money Laundering Act (AMLA) & SEC MC No. 16-2021 (Covered Persons’ AML/CFT guidelines)
- Data Privacy Act of 2012 and NPC Circulars (re debt-collection conduct)
3. Why the CA Matters
| Stakeholder | Relevance of Validation |
|---|---|
| Consumers & borrowers | Verifies that a lender is legitimate, subject to SEC supervision, and bound by interest-rate caps, disclosure, and fair-collection rules. |
| Banks & other counterparties | Proof that a financing firm can lawfully extend credit, buy receivables, or engage in leasing. |
| Local governments & BIR | Often require the CA before issuing Mayor’s/Business Permits or BIR registration. |
| Law-enforcement | A revoked or non-existent CA is prima facie evidence of syndicated estafa or usury under the RPC and RA 9474. |
4. How a Company Obtains the CA
| Stage | Lending Company | Financing Company |
|---|---|---|
| 1 – Incorporate | Name must include “Lending Company” or “Lending Investor”; minimum paid-up capital ₱1 million | Name must include “Financing Company”; minimum paid-up capital ₱10 million |
| 2 – File Secondary License Application | SEC Form LC-1 | SEC Form FCSLA-1 |
| 3 – Submit Documents | • Articles & By-laws • Info Sheet & KYC docs of directors • Board resolution to operate lending business • Sworn Statement of Compliance • Audited FS (if >1 yr old) | Same, plus projected Financial Plan & Risk Management Program | | 4 – Pay Fees | Filing fee = 1/10 of 1 % of paid-up capital (min ₱2,000) + LRF | Same formula; higher floor because of larger capital | | 5 – SEC Evaluation | Background check of directors, credit-scoring model review, IT audit for online platforms | Includes onsite inspection where leasing or factoring is planned | | 6 – Issuance of CA | Valid until revoked (no expiry) | Same |
Tip: Under MC 19-2021, all applications are lodged online through eSPARC; original hard copies are scanned, and the notarized originals are later submitted to MSRD for post-audit.
5. Validation & Authentication of a CA
| Method | What to Look For | How to Do It |
|---|
| 1. Physical Document | • SEC seal (dry embossed) • CA number (e.g., CA No. 123) • QR Code box at lower left (post-2022) | Tilt to feel the emboss; scan the QR with any phone camera. | | 2. QR-Code Scan | Redirects to https://verify.sec.gov.ph/CA/ [company-ID] | Displays company name, SEC reg. number, CA status (Active, Suspended, Revoked) and date issued. | | 3. SEC Public List | PDF/Excel lists uploaded monthly (Financing; Lending) | Go to sec.gov.ph → Regulated Companies → Lending/Financing and ctrl-F the name. | | 4. E-mail Confirmation | Write to msrd_records@sec.gov.ph or cgfd@sec.gov.ph | Attach a clear photo; expect a reply within 3 working days. | | 5. DocuTrak Code (legacy) | 16-digit Document Tracking Number on upper-right corner of pre-2022 CAs | Input in the SEC DocuTrak search page. |
No CA, No Operations. Operating even one day without an active CA exposes the promoters to fines ₱10 k – ₱100 k per day plus imprisonment of up to 10 years, under §14 RA 8556 (financing) or §12 RA 9474 (lending).
6. Continuing Obligations to Keep a CA in Good Standing
| Report / Compliance Item | Due date | Key content |
|---|---|---|
| General Information Sheet (GIS) | Within 30 days from stockholders’ meeting (usually on or before May 31) | Current shareholders & beneficial owners |
| Audited Financial Statements (AFS) | 120 days after FY-end | Must reflect lending or financing revenue lines |
| Quarterly Reports on Lending Rates & Collection Practices (online lenders) | Within 15 days after quarter-end | Average effective interest rate, complaints received |
| AML/CFT Covered Transaction Reports | per AMLC deadlines | Mandatory registration on AMLC portal |
| Branch/OLP Registration Updates | Prior approval before launch; confirmation within 10 days of operation | Exact URL or app name, host country if cloud-based |
| Infraction-specific directives | As stated in SEC Orders (e.g., refund directives, cessation of harassment practices) | Proof of compliance, affidavits, screenshots |
Failure to file on time is grounds for suspension; three consecutive failures or falsified submissions justify revocation.
7. Suspension & Revocation: Grounds and Process
Grounds (common to both Lending & Financing):
- Providing false statements in the application
- Capitalization falls below minimum after losses
- Engaging in usurious or harassing collection practices (per NPC & BSP rules)
- Non-filing of mandatory reports for 3 consecutive years
- Online Lending Platform (OLP) created or modified without SEC approval
Due Process:
- Show-Cause Order → 15 days to answer
- Clarificatory Conference (optional)
- Cease & Desist Order (CDO) may be issued ex parte to protect the public
- Final Order of Revocation published in two newspapers; name appears on SEC “blacklist”
After Revocation:
- Corporation remains liable for existing debts.
- Directors/officers may face syndicated estafa under PD 1689.
- Assets can be frozen under the AMLA if fraud is alleged.
8. Surrender or Voluntary Dissolution
A CA may be voluntarily surrendered if the company:
- Amends its primary purpose to delete lending/financing, or
- Undertakes corporate dissolution under §134(5), RA 11232.
Requirements include a Board/stockholders’ resolution, debtor notifications, and SEC audit confirming no more outstanding loans.
9. Interaction with Other Licenses & Agencies
| Activity | Additional License | Interplay with CA |
|---|---|---|
| Pawn-broking | BSP Pawnbrokers’ License | Cannot pawn-broker under a mere CA. |
| Microfinance NGO work | CA from Microfinance NGO Regulatory Council | A corporation may hold both, but activities must be ring-fenced. |
| Digital Bank services | BSP Digital Bank License | Digital bank may acquire a financing company, but the latter’s CA remains separate until merger approved by SEC & BSP. |
10. Recent Developments (2023 – 2025)
| Year | Update | Practical Effect |
|---|---|---|
| 2023 | Financing & Lending Integrative Reporting System (FLIRS) pilot | Single online portal for GIS, AFS, AML filings; failure to enroll = automatic Suspended tag in CA database. |
| 2024 | Guidelines on AI-based Credit Scoring (SEC MC No. 3-2024) | CA holders using AI must submit model-risk papers annually; the SEC may halt deployment if bias detected. |
| 2025 | Interest-Rate Cap Extension (BSP-SEC-DOF Joint Circular No. 1-2025) | 4 % monthly interest and 5 % fee ceiling for loans ≤₱10 k extended until December 31 2027. Non-observance is unsafe practice leading to CA suspension. |
11. Practical Checklist for Consumers & Counterparties
- Ask for the SEC-issued CA—an “SEC Registration Certificate” alone is not enough.
- Scan the QR Code: Status should read ACTIVE.
- Cross-check the company name (including “Inc.” or “Corp.” suffix) against the SEC Lending/Financing public list.
- Look for red flags: very high processing fees, withdrawal only through e-wallets in another person’s name, threats or harassment—often signs the CA is fake or revoked.
- Report suspicious entities via complaints@sec.gov.ph or the SEC online complaints form.
12. Frequently Asked Questions (FAQ)
| Question | Short Answer |
|---|---|
| Does a CA expire? | No fixed expiry; it stays valid unless suspended or revoked. |
| Can a single corporation get both Lending & Financing CAs? | No. The lines of business are mutually exclusive; choose one. |
| Is a BSP “Certificate of Authority” the same thing? | No. BSP grants Authorizations for banks and payment systems. SEC’s CA is different. |
| Can an online-only lender operate without a physical office? | SEC requires at least one registered business address and display of the CA in-app and on the website. |
| How long does the application take? | 30–60 calendar days if documents are complete, based on SEC service standards. |
13. Conclusion
The SEC Certificate of Authority is the legal lynchpin that separates legitimate Philippine financing and lending companies from predatory or fly-by-night operators. Validation is straightforward—thanks to QR-codes and online databases—but must become habitual for borrowers, investors, and regulators alike. With heightened digital-lending activity and intensified consumer-protection enforcement from 2023 to 2025, proper CA validation is no longer a mere formality; it is a frontline defense against fraud, harassment, and usury.
Disclaimer: This article is for general information only and does not constitute legal advice. For specific concerns, consult qualified Philippine counsel or seek official confirmation from the SEC.