THE Congress-approved Revised Corporation Code of the Philippines, recently signed into law by President Duterte, is touted to make the Philippines more attractive to investors and boost its “dismal ranking” in the World Bank’s Ease of Doing Business Report, where it slipped to 124th from 113th out of 190 countries. Senate Minority Leader Frank Drilon, who pushed passage of the enabling legislation that codified international best practices, projected on Thursday that its early enactment will transform the country as “an attractive investment destination conducive to business and entrepreneurship.”
“The new law will strengthen corporate governance standards with the end view of improving the ease of doing business in the country,” Drilon said.
He added that the Revised Corporation Code came “very timely given the country’s dismal ranking in the World Bank’s Ease of Doing Business Report 2019,” where it slipped to 124ththis year from 113th previously out of 190 countries. He noted that the World Bank study measured how easy or difficult it is for an entrepreneur to open and run a small- to medium-sized business while complying with relevant regulations.
Drilon said “the passage into law of this measure is critical in our bid to improve the country’s business climate and make our economy more competitive with the rest of the world.” The Senate Minority Leader explained the remedial legislation amends the 38-year-old Corporation Code of the Philippines and contains provisions that remove the minimum number of incorporators, allow the registration of a one-person corporation, remove the requirement for minimum capitalization, permit the electronic filing of reportorial requirements and allow attendance in meetings via remote communication or in absentia, provide protection to minority stockholders, among others.
Drilon added that the updated Corporation Code would also simplify the process of incorporation to make the present corporate code attuned with the changing business landscape. “With the amendment permitting the establishment of a one-person corporation, it will be a lot easier for local business owners and investors to register their business with the Securities and Exchange Commission,” Drilon said.
He said the new law would also simplify the name verification process, and grant a perpetual life as the default option for corporations.
He added that the new law likewise provided key reforms in four areas of corporate governance, namely: improving the ease of business in the country, prioritizing corporate and stockholder protection, instilling corporate and civic responsibility, and strengthening the country’s policy and regulatory corporate framework. “In general, the proposed amendments promote efficiency and encourage transparency in all corporate dealings—from formation to daily operations,” he said.