Published — June 11, 2021
The following post does not create a lawyer-client relationship between Alburo Alburo and Associates Law Offices (or any of its lawyers) and the reader. It is still best for you to engage the services of your own lawyer to address your legal concerns, if any.
Also, the matters contained in the following were written in accordance with the law, rules, and jurisprudence prevailing at the time of writing and posting, and do not include any future developments on the subject matter under discussion.
Read also: TAXES OF REAL ESTATE INVESTMENT TRUST
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If the Securities and Exchange Commission (Commission) finds out that the Real Estate Investment Trust (REIT) was established so as to seek the benefits of the REIT Act without a true, intention to carry out its provisions and/or the IRR, the Commission shall revoke or cancel the registration of the securities of the REIT.
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If the offender is a corporation, partnership or association or other juridical entity, the penalty may be imposed upon such juridical entity and/or upon the officer or officers of the corporation, partnership, association or entity responsible for the violation.
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The prosecution and conviction of the offender and the imposition of the penalties shall be without prejudice to the administrative, civil and criminal liabilities of the offender under the Securities Regulations Code (SRC).
What happens when the Real Estate Investment Trust (REIT) fails to comply with the provisions imposed by Republic Act No. 9856 or The Real Estate Investment Trust (REIT) Act of 2009?
REPUBLIC ACT No. 9856 or The Real Estate Investment Trust (REIT) Act of 2009 says that:
If the Commission finds out that the REIT was established so as to seek the benefits of the REIT Act without a true, intention to carry out its provisions and/or the IRR, the Commission shall revoke or cancel the registration of the securities of the REIT. The REIT shall pay the applicable taxes plus interests and surcharges under the National Internal Revenue Code of 1997, as amended.
A fine of not less than Two hundred thousand pesos (Php200,000.00) nor more than Five million pesos (Php5,000.000.00) or imprisonment of not less than six (6) years and one (1) day nor more than twenty – one (21) years, or both at the discretion of the court, shall be imposed upon any person, association, partnership or corporation, its officer, employee or agent, who, acting alone or in connivance with others, shall:
- Understate or overstate the financial statements of the RElT;
- Cause any loss, conversion, misappropriation of the assets, securities or income of the REIT;
- Use another person to hold the legal title of the shares of the REIT for his benefit for the purpose of circumventing the minimum public ownership;
- Allow himself to be used by another person to hold legal title to the shares of the REIT for the purpose of circumventing the minimum public ownership;
- Submit false or misleading certification on the minimum public ownership required by the REIT Act; or
- Violate any of the provisions of the REIT Act, or the rules and regulations promulgated under authority hereof.
If the offender is a corporation, partnership or association or other juridical entity, the penalty may, at the discretion of the court, be imposed upon such juridical entity and/or upon the officer or officers of the corporation, partnership, association or entity responsible for the violation, and if such officer is an alien, he shall in addition to the penalties prescribed, be deported without further proceedings after service of sentence.
The prosecution and conviction of the offender and the imposition of the above penalties shall be without prejudice to the administrative, civil and criminal liabilities of the offender under the Securities Regulations Code (SRC).
Alburo Alburo and Associates Law Offices specializes in business law and labor law consulting. For inquiries, you may reach us at info@alburolaw.com, or dial us at (02)7745-4391/0917-5772207.
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