Being a corporation, it is separate legal entity, an artificial being created by operation of law, having the right of succession and the power, attributes and properties expressly authorized by law or incident to its existence (Section 2, Corporation Code of the Philippines).
The Corporation Code of the Philippines defined non-stock corporation as one where no part of its income is distributable as dividends to its members, trustees, or officers; that any profit which a non-stock corporation may obtain as an incident to its operations shall, whenever necessary or proper, be used for the furtherance of the purpose or purposes for which the corporation was organized (Section 87, Corporation Code of the Philippines).
We should also take note that the pertinent provisions governing stock corporation shall be applicable to non-stock corporations, except as may be covered by specific provisions of Title XI of the Corporation Code of the Philippines.
Non-stock corporations may be formed or organized for charitable, religious, educational, professional, cultural, fraternal, literary, scientific, social, civic service, or similar purposes, like trade, industry, agricultrual and like chambers, or any combination thereof (see Title XI Section 88 of the Corporation Code of the Philippines).
Chapter II of the Corporation Code of the Philippines deals with religious corporations, to wit:
- Sec. 109 - Classes of religious corporations
- Sec. 110 - Corporation sole
- Sec. 111 - Articles of incorporation
- Sec. 112 - Submission of the articles of incorporation
- Sec. 113 - Acquisition and alienation of property
- Sec. 114 - Filing of vacancies
- Sec. 115 - Dissolution
- Sec. 116 - Religious societies
As a registered corporation with the Securities and Exchange Commission (SEC), churches are required to submit (a) 4 copies of General Information Sheet to be filed within 30 days from date of the annual members meeting; and (b) 4 copies of Audited Financial Statements (AFS) stamped "RECEIVED" by the Bureau of Internal Revenue (BIR) within 120 calendar days after the end of the fiscal year, as indicated in the Financial Statements.
The AFS of churches with annual gross receipts of PHP100,000.00 or more, or total assets of PHP50,000,000.00 or more shall be audited by an independent certified public accountant (CPA) registered with the Board of Accountancy (BOA). However, if the annual gross receipts or total assets is less than these amounts, the financial statements (FS), at the minimum, be certified under oath by the treasurer of the church.
Rule 68 of the Securities Regulations Code (SRC), as amended, states the requirements applicable to the form and content of financial statements required to be filed with the SEC by all corporations - whether stock or non-stock (including churches) - that the AFS are prepared and presented in conformity with the generally accepted accounting principles (GAAP), except those whose paid-up capital is less than PHP50,000.00.
A church can be registered as a corporation sole or if it was originally registered under a different category, it could amend it's registration to corporation sole. As corporation sole,it has no reportorial duty to SEC but it needs to apply for a tax-exemption ruling from the BIR which will require the church to submit an annual audited FS if its annual gross receipts reached P100K or more.
ReplyDeleteA church can be registered as a corporation sole or if it was originally registered under a different category, it could amend it's registration to corporation sole. As corporation sole,it has no reportorial duty to SEC but it needs to apply for a tax-exemption ruling from the BIR which will require the church to submit an annual audited FS if its annual gross receipts reached P100K or more.
ReplyDeletehow about those Churches that aren't yet registered to SEC? but under the control of a bigger Church organization which is a foreign organization who has a Philippine district? Actually registered in the name of that organization. The Church was only in its 6th year of operation and its annual gross receipts was below P100K. The Church is having an audit procedure under the service of a fresh graduate accountant but not yet registered under BOA. For formality, orderly administration and Church custody of fund are the main goal. Also, though in small Churches, there has been fraudulent transactions being made without having their formal audit procedures because of the rule of SEC.
ReplyDeleteWhat will happened for a big church that operate for 15 years yet, they're not registered in sec?
ReplyDelete