Corporate Law

Senate ratifies revised Corporation Code

Date: 28 November 2018; Type: Legal News; Source: Philippine News Agency

MANILA, Nov 28 (PNA) - Voting 17-0, the Senate on Wednesday ratified the reconciled version of the proposed measure that seeks to amend the Corporation Code of the Philippines to provide for a more business-friendly environment and boost the competitiveness of the country's economy.

Senate Minority Leader Franklin Drilon, the main author of the Senate version of the bill, said the final version of the measure is a product of the bipartisan cooperation between the majority and minority blocs of the Senate, and the cooperation between the two Chambers of Congress united by the common purpose of creating an environment conducive to business and entrepreneurship.

The measure amends Batas Pambansa 68, or the Corporation Code of the Philippines, that was passed on May 1, 1980.

“For the past 38 years, such an important piece of law has not gone any major revision, and it is probably because of that, that our business practices and our regulatory framework lagged behind many of the more advanced countries,” Drilon said.

In the latest Ease of Doing Business Report of the World Bank (WB) released earlier this month, the Philippines fell to 124th out of 190 economies. Previously, the country was at 113th.

In the areas of starting a business, the Philippines was ranked 166th, and was at 184th place on the "getting credit" indicator of the World Bank report.

“I believe that the enactment of this landmark legislation in this 17th Congress is not only timely but also necessary, considering the fact that we are lagging behind our neighbors in terms of ease of doing business,” Drilon said.

“This measure will vastly improve the regulatory environment for setting up a business in our country,” he added.

He further said the measure has four main reform clusters: the policies that would enhance the ease of doing business in the country, rules that would prioritize corporate stockholders’ protection, provisions that would instill corporate and civic responsibility and amendments that would strengthen the country’s policy and regulatory corporate framework.

Drilon said the new corporation code will improve the ease of doing business in the country by allowing a one-person corporation, removing the minimum capital requirement, and providing for perpetual existence of corporation.

“Allowing a one-person corporation would stop the practice of using dummies to comply with the stringent requirement of the present law,” he noted.

“The bicam report also endorses measures to strengthen corporate governance standards and provide protection to minority stockholders, particularly mandating corporations vested with public interests to have independent directors,” he added.

The Senate minority leader said the new Code provides a standard guide to the Securities and Exchange Commission (SEC) in determining which corporations are vested with the public interest

Drilon, who was celebrating his 73rd birthday, said that he would not ask for any gift from his colleagues, “but would consider the adoption of the bicameral conference committee report as a gift that we owe to our country and to the Filipino people.”

"With the enactment of this landmark legislation, I am confident that our country would be able to catch up with its neighboring countries," he said.

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