CORPORATION

R. A. No. 11232
An Act Providing for the
Revised Corporation Code of the Philippines

TITLE XVI
INVESTIGATIONS, OFFENSES, AND PENALTIES

INVESTIGATION AND PROSECUTION OF OFFENSES.

SEC. 154.

 SEC may INVESTIGATE alleged violation of the

RCCP, rule, regulation or order of the
Commission.
SEC may publish its findings, orders, opinions,
advisories, or information concerning any such
violation.

ADMINISTRATION OF OATHS, SUBPOENA OF WITNESSES

& DOCUMENTS.
SEC. 155.

 The SEC, through its designated officer, may:

i. administer oaths and affirmation;

ii. issue subpoena;
iii. take testimony in any inquiry or
investigation;
iv. perform other acts necessary to the
proceedings or to investigation.

CEASE AND DESIST ORDERS.

SEC. 156.
 Whenever the SEC has reasonable basis to
believe that a person has violated, or is about to
violate the RCCP, a rule, regulation, or order of
the SEC, it may direct person to desist from
committing the act constituting the violation.

o Cease & desist order ex parte to enjoin an

act or practice w/c is fraudulent or can be
1
 Reasonably expected to cause significant
imminent, & irreparable danger or injury to
public safety or welfare. –

 valid for 20 days, may be made

permanent after due notice & hearing.

 SEC may file administrative case under

Sec. 158 &/or
initiate criminal prosecution (DOJ)

CONTEMPT.
SEC. 157.

 SEC may issue CONTEMPT order against any

person, w/o justifiable cause, who fails or refuses
to comply w/ any lawful order, decision, or
subpoena issued by the SEC after notice and
hearing.

PENALTY:
i. not exceeding P30,000.00;
ii. fine of P1k a day [when refusal amounts to
clear & open defiance of the SEC’s order,
etc.] until the order etc. is complied w/.

ADMINISTRATIVE SANCTIONS.
SEC. 158.

 SEC may impose the ff. sanctions for violation of

RCCP, rules and regulations or SEC order:

(a) Fine of P5k to P2M, & not more than P1K

for each day of continuing violation but not
to exceed P2M;
(b) Permanent cease & desist order;
(c) Suspension or revocation of the certificate
of incorporation;
(d) Dissolution of the corp. and forfeiture of its
assets.

UNAUTHORIZED USE OF CORPORATE NAME; PENALTIES.

2
SEC. 159.

 Unauthorized use of corporate name:

PENALTY: Fine from P10K to P200K.

VIOLATION OF DISQUALIFICATION PROVISION;

PENALTIES.
SEC. 160.

 Willful concealment of DISQUALIFICATION of a

director, trustee or officer.
PENALTY:
i. Fine from P10K to P200K
& Permanent disqualification from
being a D. T, O;
ii. Fine from P20K to P400K – if violation is
injurious or detrimental to the public.

VIOLATION OF DISQUALIFICATION PROVISION;

PENALTIES.
SEC. 160.

 Willful concealment of DISQUALIFICATION of a

director, trustee or officer.
PENALTY:
i. Fine from P10K to P200K
& Permanent disqualification from
being a D. T, O;
ii. Fine from P20K to P400K – if violation is
injurious or detrimental to the public.

VIOLATION OF DUTY TO MAINTAIN RECORDS, TO ALLOW

THEIR INSPECTION OR REPRODUCTION; PENALTIES.
SEC. 161.

 Unjustified failure/ refusal to maintain

CORPORATE BOOKS/ to allow
inspection/reproduction of records.
PENALTY:
i. Fine from P10K to P200K
ii. Fine from P20K to P400K – if violation is
injurious or detrimental to the public.

3
WILLFUL CERTIFICATION OF INCOMPLETE, INACCURATE,
FALSE OR MISLEADING STATEMEMTS OR REPORTS;
PENALTIES.
SEC. 162.

 Willful certification of incomplete, false or

misleading statements or REPORTS required
under the RCCP.
PENALTY:
i. Fine from P20K to P200K;
ii. Fine from P40K to P400K – if violation is
injurious or detrimental to the public – to
auditor or responsible person.

INDEPENDENT AUDITOR COLLUSION; PENALTIES.

SEC. 163.

 An independent auditor who, in collision w/ the

corp’s directors/representatives, certifies the
corp.’s financial statements despite its
incompleteness or inaccuracy.
PENALTY:
i. Fine from P80K to P500K
ii. Fine from P100K to P600K – if violation is
injurious or detrimental to the public.

OBTAINING CORPORATE REGISTRATION THROUGH

FRAUD; PENALTIES.
SEC. 164.

 Those responsible for the formation or a corp.

through fraud or who assisted therein.

PENALTY:
i. Fine from P200K to P2M;
ii. Fine from P400K to P5M – if violation is
injurious or detrimental to the public.

4
FRAUDULENT CONDUCT OF BUSINESS; PENALTIES.
SEC. 165.

 A corp. that conducts its business through

FRAUD.

PENALTY:
i. Fine from P200K to P2M;
ii. Fine from P400K to P5M – if violation is
injurious or detrimental to the public.

ACTING AS INTERMEDIARIES FOR GRAFT & CORRUPT

PRACTICES; PENALTIES.
SEC. 166.

 A corp. used for fraud, or for committing or

concealing graft & corrupt practices.

PENALTY: Fine from P100K to P5M

ENGAGING INTERMEDIARIES FOR GRAFT & CORRUPT

PRACTICES; PENALTIES.
SEC. 167.

 A corp. that appoints an intermediary who

engages in graft & corrupt practices for the
corp.’s benefit or interest.

PENALTY: Fine from P100K to P1M

TOLERATING GRAFT & CORRUPT PRACTICES;PENALTIES.

SEC. 168.

 A D, T, O who knowingly fails to sanction, report,

or file appropriate action w/ proper agencies
allows/tolerates the graft & corrupt practices
committed by a corp.’s D, T, O, E.

PENALTY: Fine from P500K to P1M

5
RETALIATION AGAINST WHISTLEBLOWERS.
SEC. 169.

 A WHISTLEBLOWER refers to any person who

provides truthful information relating to the
commission or possible commission of any
offense or violation of the RCCP.

Any person who knowingly, & w/ intent to

retaliate, commits acts detrimental to a
whistleblower [interfering w/ his livelihood]

PENALTY: Fine from P100K to P1M

OTHER VIOLATIONS OF THE CODE; SEPARATE LIABILITY.

SEC. 170.

 Violations of other provisions of RCCP.

PENALTY: Fine from P10K to P1M

 Violation committed by the Corp.

PENALTY: Dissolution of the Corp. and
appropriate action against D, T. O.

LIABILITY OF DIRECTORS, TRUSTEES, OFFICERS OR

EMPOLYEES.
SEC. 171.

 If the offender is a corp., the penalty may, at the

discretion of the court, be imposed upon such
corp. &/or its D, T, S, M, O, E responsible for the
violation or indispensable to its commission.

LIABILITY OF AIDERS AND ABETTORS & OTHER

SECONDARY LIABILITY.
SEC. 172.

 Anyone who shall aid, abet, counsel, command,

induce, or cause any violation of the RCCP, or
any rule, regulation, or order of the SEC shall be
punished w/ a fine not exceeding that imposed
on the principal offenders, at the discretion of the
court, after taking into account their
participation in the offense.