SEC Eases Requirements for Capital Increases Funded by Cash Subscriptions

Recently, the Securities and Exchange Commission (SEC) issued Memorandum Circular No. 6, Series of 2026 which introduced amendments to the documentary requirements for corporations seeking to increase their authorized capital stock (ACS). The Circular builds upon the framework under Memorandum Circular No. 11, Series of 2016, and primarily aims to streamline the application process for subscriptions paid in cash.

A significant revision is the removal of the ₱50,000,000.00 paid-up capital threshold. Previously, cash subscriptions exceeding this amount required the submission of a Special Audit Report. Under the new rules, corporations may instead submit a notarized Subscription Contract, regardless of the subscription amount, provided that the payment is made in cash, and the corporation is not within the exempt categories.

The Subscription Contract must be executed by the subscriber(s), the corporation’s President, and Treasurer. It must specify the number of subscribed shares and the corresponding payment. If the President or Treasurer is unavailable, a Board Resolution must duly authorize a Director or Officer to sign on their behalf.

Notwithstanding these changes, a Special Audit Report remains mandatory for 1) listed companies, 2) public companies, 3) companies offering securities to the public, and 4) companies holding secondary licenses regulated by the Commission.  Furthermore, the SEC clarifies that this enumeration does not limit or impede its authority to require a Special Audit Report in circumstances other than those listed.