Nice trend here sir Auditor.
Tanong ko lang po, any idea for building a Credit Cooperative instead of Lending? Kasi masyadong mataas ang cash requirement ng Lending.
As mentioned (from other trend)... nag-ala bombay kami ngayon ng misis ko, para lng dati sa mga office-mate & production workers dito sa company namin. But, kala-onan.. dumami na sila ng dumami where I need more additional capital na, kasi nakakahiyang matanggihan mga "loyal client" mo eh.. I'm planning to set a cooperative instead in the future, but not know yet the proper way.
PLEASE ADVICE.. (advance thnks.)
Sir Trader 202:
Please read below the law some provision on Lending which provides the following:
1. Lending shall be a corporation only; single proprietorship or partnersship not allowed;
2. Paid-in capital shall be not lower than P1,000,000.00;
3. Funds source shall be not more than 19 persons;
4. A validity subsisting authority to operate from the SEC;
5. All laws and regulation relative to lending companies were superseded by this RA 9474;
6. Also, please refer to penalty clause of this law for those operating without proper authority from SEC (Securities & Exchange Commission).
Trader 202, the RA 9474 law was very clear, a lending company should be a corporation only. You may establish a lending company as long as it is a corporation; and funds source not more than 19 persons; with Paid-in capital of P1 Million. This lending corporation is exclusively regulated by the SEC.
Republic of the Philippines
Congress of the Philippines
Third Special Session
[REPUBLIC ACT NO. 9474]
AN ACT GOVERNING THE ESTABLISHMENT, OPERATION AND REGULATION OF LENDING COMPANIES
Be it enacted by the Senate and House of Representatives of the Philippines in the Congress assembled:
Begun and held in Metro Manila, on Monday, the nineteenth day of February, two thousand seven.
Section 1. Title. – This Act shall be known as the “Lending Company Regulation Act of 2007”.
Section 2. Declaration of Policy. – It is hereby declared the policy of the State to regulate the establishment of lending companies and to place their operation on a sound, efficient and stable condition to derive the optimum advantages from them as an additional source of credit; to prevent and mitigate, as far as practicable, practices prejudicial to public interest; and to lay down the minimum requirements and standards under which they may be established and do business.
Section 3. Definitions of Terms – For purposes of implementing this Act, the following shall apply:
a. Lending Company shall refer to a corporation engaged in granting loans from its own capital funds or from funds sourced from not more than nineteen (19) persons. It shall not be deemed to include banking institutions, investment houses, savings and loan associations, financing companies, pawnshops, insurance companies, cooperatives and other credit institutions already regulated by law. The term shall be synonymous with lending investors.
b. Debtor shall refer to a borrower or person granted a loan by the lending company.
c. Quasi-bank shall refer to a non-bank financial institution authorized by the BSP to engage in quasi-banking functions and to borrow funds from more than nineteen (19) lenders through the issuance, endorsement or assignment with recourse or acceptance of deposit substitutes as defined in Section 95 of Republic Act No. 7653 (the “New Central Bank Act”) for purposes of relending or purchasing of receivables and other obligations.
d. Subsidiary shall refer to a corporation more that fifty percent (50%) of the voting stock of which is owned by a bank or quasi-bank.
e. Affiliate shall refer to a corporation, the voting stock of which, to the extent of fifty percent (50%) or less, is owned by a bank or quasi-bank which is related or linked to such institutions through common stockholders or such other factors as may be determined by the Monetary Board of the BSP.
f. SEC shall refer to the Securities and Exchange Commission.
g. BSP shall refer to the Bangko Sentral ng Pilipinas.
Section 4. Form of Organization. – A lending company shall be established only as a corporation: Provided, That existing lending investors organized as single proprietorships or partnership shall be disallowed from engaging in the business of granting loans to the public one year after the date of effectivity of this Act.
Section 5. Capital. – The minimum paid-in capital of any lending company which may be established after the effectivity of this Act shall be One Million pesos (P1,000,000.00): Provided, however, That lending companies established and in operation prior thereto shall comply with the minimum capitalization required under the provisions of this Section within such time as may be prescribed by the SEC which time shall, in no case, be less than three years from the date of effectivity of this Act and Provided, further, That the SEC may prescribe a higher minimum capitalization if warranted by circumstances.