By Revin Mikhael D. Ochave, Reporter
THE Securities and Exchange Commission (SEC) has transitioned to a fully online and paperless system for company registrations, with the goal of improving the ease of doing business.
The commission issued Memorandum Circular No. 3 on April 4, mandating the use of the SEC Zuper Easy Registration Online (ZERO) system for company registration through the Electronic Simplified Processing of Application for Registration of Company or eSPARC and the One-Day Submission and E-registration of Companies (OneSEC) portals, the SEC said in an e-mailed statement on Tuesday.
SEC ZERO is a module under eSPARC that eliminates the need for physical signatures, notarization, and the submission of hard copies of registration documents.
“SEC ZERO exemplifies our commitment to digitalization and sustainability, making the process of setting up a business easier and faster than ever. By allowing companies to authenticate their registration documents online, company registration can now be completed anytime and anywhere,” SEC Chairperson Emilio B. Aquino said.
SEC ZERO is integrated with the electronic SEC user registration environment (eSECURE), which verifies users before they can access the SEC’s online services, as well as the Electronic Submission Authentication Portal (eSAP), which uses one-time passwords to electronically authenticate SEC-required documents in place of conventional paper-based signatures.
“The credentialing process through eSECURE, plus authentication via eSAP, further enables us to filter out fraudulent individuals seeking to misuse the corporate vehicle to defraud the public. With this, those registering corporations are properly identified and can be held accountable, if necessary,” Mr. Aquino said.
Since its launch in July of the previous year, SEC ZERO has facilitated the registration of 1,874 companies. The application is part of the SEC’s third phase of digital transformation initiatives.
Effective April 7, all domestic stock corporations — excluding lending and financing companies — are required to be processed through SEC ZERO. This includes corporations wholly owned by Filipinos as well as those with foreign equity.
Filipino-owned domestic stock corporations may still register via OneSEC.
Lending companies, financing companies, and foreign corporations will continue using the traditional process under eSPARC for three months following the effectivity of Memorandum Circular No. 3. After this transition period, SEC ZERO will be mandatory for all types of corporations.
The SEC recorded a 6% increase in new company registrations, reaching 52,304 in 2024, compared with 49,506 in 2023, largely attributed to streamlined digital application processes.
In October of the previous year, the World Bank’s Business Ready (B-READY) report ranked the Philippines 16th out of 50 economies in terms of regulatory framework, with a score of 70.68. This positions the country among the top 40% of economies globally for regulatory quality.
However, the report also ranked the Philippines 24th in public services and 36th in operational efficiency.
The B-READY report evaluates the business and investment climate across three pillars: regulatory framework, public services, and operational efficiency.
“I certainly appreciate the convenience that this new rule brings. I anticipate more enterprises will consider incorporating, given how easy it is now,” Ateneo de Manila Policy Center Fellow Michael Henry Ll. Yusingco said in a Facebook message.
“But it is incumbent upon the SEC to educate the public on how this works and how it benefits our economy. This will likely require a massive nationwide education campaign,” he added.
Rizal Commercial Banking Corp. Chief Economist Michael L. Ricafort said in a Viber message that the SEC’s recent move is part of the government’s broader digitization efforts to improve efficiency and productivity.
“However, it is essential that this process is digitally secured and validated to mitigate risks such as misrepresentation, hacking, and other cybersecurity threats,” he said.
