Under the Revised Corporation Code, all corporations are mandated to maintain accurate records and ensure full disclosure regarding their stockholders, members, and ownership structures. As the primary regulatory body, the Securities and Exchange Commission (“SEC”) continuously monitors these structures—with a specific focus on Ultimate Beneficial Owners (“UBO”) to prevent the misuse of corporate entities for illicit activities. Effective in 2026, pursuant to SEC Memorandum Circular No. 15, Series of 2025 (the “Beneficial Ownership Disclosure Rules of 2026”), the Commission has significantly updated its policies regarding ownership thresholds, nominee disclosures, and reporting mechanisms.
First, regarding the ownership threshold, a Beneficial Owner is defined as any natural person who ultimately owns, controls, or exercises ultimate effective control over a corporation. While the previous standard qualified natural persons owning at least twenty-five percent (25%) of voting shares as UBOs, the 2026 updates have reduced this threshold to twenty percent (20%). Consequently, corporations must promptly review their ownership structures to determine if any shareholders now meet this revised criteria, necessitating immediate updates to corporate records and regulatory disclosures to maintain compliance.
Second, the amendments now include express provisions for the Mandatory Disclosure of Nominee Status. Corporations are now required to identify nominee shareholders, directors, and trustees, as well as their respective nominators. By requiring the disclosure of the true parties behind these appointments, the SEC aims to enhance transparency and prevent fraudulent schemes often associated with masked ownership and “dummy” directorships.
Lastly, a landmark change is the implementation of the Beneficial Ownership Registry. Effective January 30, 2026, UBO information is no longer included in the standard General Information Sheet (“GIS”). Instead, all SEC-registered corporations must submit beneficial ownership data via a dedicated online platform known as the Hierarchical and Applicable Relations and Beneficial Ownership Registry (HARBOR). This centralized digital system allows the SEC to optimize its monitoring capabilities and more effectively intercept fraudulent corporate transactions.
In summary, the transition to the Beneficial Ownership Disclosure Rules of 2026 represents a more stringent and technologically driven approach to corporate transparency in the Philippines. By lowering the ownership threshold to 20%, mandating the disclosure of nominee arrangements, and migrating reporting to the HARBOR system, the SEC has significantly tightened the net against corporate opacity. For corporations, timely compliance is no longer just a matter of filing; it requires a proactive re-evaluation of internal records to ensure that the “ultimate” control of the entity is clearly and accurately reported to the state.
This guide provides a general overview of the above transactions at the time of writing only and is not intended to be a comprehensive legal advice. This should also not be taken as an opinion on the topic. For more details and information, you may coordinate with any GVES Law Partner regarding the matter.