The topics below may be relevant to your daily activities, especially those which involve business law, labor law, and other legal areas of your business.
Business Law and Labor Law Updates
SEPARATION PAY OF A RETRENCHED OR LAID OFF EMPLOYEE DUE TO COVID-19, NOT SUBJECT TO TAX
The COVID-19 pandemic continues to have a significant impact on the economy. Some employers reluctantly opted to downsize the number of employees to save the operation of their business while some resorted to closure. As an effect, many employees have lost their job. Such termination of employees is warranted under Article 283 (now 298) of the Labor Code of the Philippines which allows the employer to severe the employment of an employee due to retrenchment or closure of business.
Extension of Tax Payment due to ECQ and MECQ
Because of the inaccessibility of payment facilities for taxpayers due to the extension of the Enhanced Community Quarantine (ECQ) period until May 15, 2020 and implementation of the Modified Enhanced Community Quarantine (MECQ) in some areas until May 31, 2020, the Bureau of Internal Revenue issued Revenue Memorandum Circular (RMC) 48-2020 on 22 May 2020 to extend the payment of taxes. The Circular provides an extension in filing of returns and payment of taxes and the payment of Amnesty Tax until June 14, 2020.
Registering a Nonstock Corporation
Nonstock Corporation is defined by the Revised Corporation Code as one where no part of its income is distributable as dividends to its members, trustees, or officers. Its capital is in the form of contributions or donations. It is not organized for profit and any profit earned by the non-stock corporation shall be used for the furtherance of the purpose or purposes for which it is organized.
FILING OF THE GENERAL INFORMATION SHEET (GIS) DURING THE COVID-19 OUTBREAK AND ENHANCED COMMUNITY QUARANTINE
The Revised Corporation Code requires corporations, stock or non-stock, to report either the names, nationalities, shareholdings, and residence address of the elected directors, trustees, and officers, or the fact of non-holding of such any election, within thirty (30) days from the scheduled date of election. Corporations, under Part II of Securities and Exchange Commission (SEC) Memorandum Circular No. 2, Series of 2020, are required to file their General Information Sheets within thirty (30) calendar days from the date of actual annual stockholder’s meeting for stock corporations or date of actual member’s meeting for non-stock corporations.
With the inevitable impact of Covid-19 outbreak on the regular operations of registered corporations, and to ease the burden on the business sector, the SEC, through its Memorandum Circular No. 9, Series of 2020, resolved to adopt the following measures:
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