Frequently-Asked Questions About Lending Companies

2011FREQUENTLY-ASKED QUESTIONS ABOUT LENDING COMPANIESOrganization1. What is a Lending Company?It is a corporation organized to engage in the business of lending money. Republic Act No. 9474 governs the organization and operation of lending companies. 2. What is the difference between a lending company and a financing company?A lending company can only engage in direct lending activities, while a financing company can, in addition to direct lending do other activities, such as, discounting of commercial papers and receivables; trading of contracts, leases, chattel mortgages and other evidence of indebtedness; and financial leasing of movable and immovable properties.3. How can a lending company be organized and operated?By registering as a stock corporation and getting a certificate of authority from the Securities and Exchange Commission (SEC).4. What are the requirements for registration of a lending company?• All documents needed for registration as a corporation under the law;• Application for Certificate of Authority to Operate as a Lending Company, and other documentary requirements;• Minimum paid-up capitalization of PhP1,000,000.5. Can foreigners invest in a lending company?Yes, as long as the...