How to Start a Business in the Country? A Guide to Business Registration in Manila, Philippines

Business registration in Manila, Philippines can get frustrating, especially if you’re not fully aware of how things operate within the government agencies. This guide will assist you to become knowledgeable about the process and to help you prepare all the necessary documents beforehand to make it easier for a starting entrepreneur like you to start your own business.

Read This :   Business Registration

First, you have to identify the type of business ownership you want to apply for as there are a few types and each may have a different process and documents to be submitted. Therefore, it’s vital to know which process to follow in order for your business to be fully registered and licensed before it starts operating.

Sole Proprietorship. A sole proprietorship (also being referred to as a sole trader) is a business that has just one owner and pays income tax on profits gained from the business. This one is very common among individual contractors, consultants, or small business owners as it is the simplest type of business to set because of its less complicated registration process compared to the other types. Many sole proprietors use their own names because creating a separate business or trade name isn’t always needed. Freelancers who provide professional services can register under sole proprietorship in order for them to be able to issue an official receipt to their clients, which allows them to comply with their tax obligations as prescribed by the Philippine law.

Partnership is created when at least two (2) persons decide to do business with one another and divide the ownership, revenues, and obligations of the business. With a partnership, the proprietors are at great risk in case anything goes wrong. Therefore, the partnership is not considered as a separate entity under the law. One good thing about it is that it’s simpler to set up and has less paperwork, legal requirements, and tax obligations than a corporation.

Corporation is maintained by shareholders and established either for profit or for non-profit. If the entity is for profit, it will be reinvested in the operation and then appropriated among shareholders through dividends. It’s a separate legal entity and distinct from its legal owners. The most important aspect of this type of business is its limited accountability wherein shareholders are not personally liable for the company’s debts or when it becomes sued.

Now that you have identified your business type, you can then check the following steps:

Basic Steps in Registering a Sole Proprietor Business in the Philippines:

  1. Register a business name at the Department of Trade and Industry (DTI). You can do it online through http://www.dti.gov.ph/. Think of a few business names, as stated earlier, sole proprietors usually use their own names for their business such as ABC Trading. Once decided, you can check on the DTI’s website if it has already been taken or is still available. If you have come up with a business name that’s not yet taken, you may then proceed in filling out the Business Name Application Form. You would be asked to choose your business scope, and then pay the necessary fees. You would then have the option to pick up your business name document at a DTI office or you can print it online.
  2. Obtain a Barangay Certificate of Business Registration and Mayor’s Permit. Go to the barangay where your business is operating, ask for a barangay clearance and fill out an application form for the business certificate. Prepare your Valid IDs (at least 2), DTI Business Certificate, contract of lease if you’re renting, or Land Title and Certificate of Homeowner’s Association if the business address is in a subdivision, condominium, or a village. Note that requirements may vary depending on your business’s location.
  3. Register in the Bureau of Internal Revenue (BIR). Go to the Regional District Office (RDO) of your business’s location. Fill out BIR Form 1901 and submit your DTI Business Name Certificate, Barangay Registration, Mayor’s Permit, Proof of Address, and Valid IDs. Pay the Registration Form (BIR Form 0605), and claim your Certificate of Registration (Form 2303).

Basic Steps in Registering a Partnership or Corporation Business in the Philippines:

  1. Reserve and register your proposed corporate name through the Securities and Exchange Commission (SEC). You can check the business name’s availability and have it reserved online through http://www.sec.gov.ph/onlinetransactions/search.html. You can then go to the SEC Building to complete the procedure. You may need to bring a few documents (such as Articles of Incorporation) for reference and prepare your cash, as there will be fees for the process. You will be informed once you can claim the Certificate of Incorporation or Partnership.
  2. Obtain Barangay Certificate of Business Registration and Mayor’s Permit. Go to the barangay where your business is operating, ask for a barangay clearance and fill out an application form for a business certificate. Prepare your Valid IDs (at least 2), SEC Certificate of Incorporation or Partnership, contract of lease if you’re renting, or Land Title and Certificate of Homeowner’s Association if the business address is in a subdivision, condominium, or a village. Note that requirements may vary depending on your business’ location.
  3. Register in the Bureau of Internal Revenue (BIR). Go to the Regional District Office (RDO) of your business’ location. Fill out BIR Form 1903 and submit your Certificate of Incorporation or Partnership from SEC, Barangay Registration, Mayor’s Permit, Proof of Address, and Valid IDs. Pay the Registration Form (BIR Form 0605) and documentary stamp tax if applicable, and claim your Certificate of Registration (Form 2303).

If you have employees, it is vital that you register them to SSS, PhilHealth, PAG-IBIG, and BIR. Depending on the nature of the business that you would like to establish, it is also essential to obtain special permits. If your home-based business, for instance, will revolve around food and chemicals, a permit from the Department of Health’s Food and Drug Administration (FDA) would be needed.

Hopefully, this guide was able to help you understand the process of business registration in the Philippines. Yap & Associates Law will be happy to assist in case you’ll need assistance.

Related Posts