The Securities and Exchange Commission (SEC) tightened oversight of one-person corporations, raising audit thresholds, and formalizing a tiered penalty system for late and non-filing of financial statements in a bid to standardize enforcement under the Revised Corporation Code.
In Memorandum Circular No. 10, series of 2026, issued on February 16, the SEC laid out updated reportorial requirements, and a structured scale of fines covering financial statement submissions, appointment of officers, and bond postings. The rules take effect immediately upon publication in a newspaper of general circulation.
The move seeks to bring uniformity to monitoring of one-person corporations or OPCs—a corporate vehicle introduced under Republic Act No. 11232 that allows a single stockholder to form a corporation—as their numbers continue to grow.
Higher audit threshold
Among the most consequential changes is the adjustment of the audit threshold. Under previous rules, OPCs with total assets or liabilities of ₱600,000 or more were required to submit audited financial statements (AFS). The new circular raises that threshold fivefold.
“Effective for fiscal years ending on or after 31 December 2025, the audit threshold has been adjusted to Three Million Pesos (₱3,000,000.00),” the circular said. “Only OPCs with total assets or liabilities exceeding ₱3,000,000.00 are now required to submit an AFS.”
OPCs at or below the new ceiling may instead file financial statements accompanied by a Statement of Management’s Responsibility signed under oath by the president and treasurer.
The adjustment is expected to ease compliance costs for smaller enterprises while keeping larger OPCs within stricter audit coverage.
Tiered fines for late and non-filing
The circular also codifies a graduated penalty regime for late and non-submission of financial statements, calibrated according to retained earnings and frequency of violations.
For late filing, first-offense fines range from ₱5,000 for companies with capital deficiency or negative retained earnings to ₱9,500 for firms with retained earnings above ₱10 million. Fifth offenses can reach as high as ₱13,500.
Non-filing penalties are steeper. A first offense starts at ₱10,000 for firms with capital deficiency and rises to ₱19,000 for those with retained earnings above ₱10 million. By a fifth offense, penalties can reach ₱27,000.
The regulator also clarified definitions of “Filed/Submission on Time,” “Late Filing/Submission,” and “Non-Filing,” capping monthly penalty computations at 12 months in both late and non-filing scenarios.
Annual financial statements must be filed within 120 calendar days from the fiscal year end, or as prescribed by the commission in its annual filing schedule.
Bond requirement and enforcement
The circular reinforces the requirement for OPCs whose single stockholder also serves as treasurer to post a surety, cash, or property bond. The bond must be renewed every two years or upon review of financial statements or approval of an increase in authorized capital stock.
Bond coverage is pegged to authorized capital stock, starting at ₱1 million for corporations with up to ₱1 million in capital and scaling upward. A custodian fee of ₱5,000 is charged for every posting of bond.
Failure to post the required bond on time carries its own penalties. For biennial postings, violations are subject to a basic fine of ₱10,000 plus a monthly surcharge that escalates with repeated offenses—from ₱500 per month for a first violation to ₱1,500 per month for a third and succeeding violation.
The circular also outlines procedures for claims against bonds and conditions for release when a new treasurer— lother than the single stockholder—is appointed.
Officer appointments and legacy compliance
OPCs must appoint a treasurer, corporate secretary, and other officers and file a Form for Appointment within 20 days of incorporation. Failure to do so results in a one-time penalty of ₱10,000.
Subsequent appointments must be reported within five days, with fines starting at ₱5,000 for a first offense and rising to ₱9,000 for a fifth offense.
OPCs incorporated before December 18, 2023 that failed to comply with earlier digital enrollment requirements under previous circulars face a one-time penalty, while certain entities previously monitored but not yet penalized will be assessed ₱5,000.
Push for uniform monitoring
The commission said the guidelines were issued pursuant to its authority under the Revised Corporation Code and reflect the need to “ensure uniformity in assessment of fines and penalties.”
By clarifying audit thresholds, formalizing penalty brackets, and reiterating bond requirements, the regulator is signaling closer scrutiny of compliance by single-owner corporations—even as it relaxes reporting burdens for the smallest players.
For entrepreneurs using the OPC structure, the message is twofold: lower audit costs for micro and small enterprises, but tighter and more predictable enforcement for those that miss deadlines.
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