Are you planning to start a business in the Philippines? Then here are some of the things you need to know before you start. Here is a simple guide on how to start a business in the Philippines.
1. Business Name
For a single proprietorship, a memorandum of agreement between the partners is normally filed with the SEC. A certificate of registration will be issued by the BIR upon payment of the required tax and other documentary stamp taxes to be incurred. In case your business is registered as a dba (Doing Business As), it should have been previously filed with the local City/Municipal Treasurer’s Office or Revenue District Officer for clearance before being registered with the SEC. On the other hand, a corporation should have a Certificate of Incorporation first prior to applying for its license to operate from DTI and SEC. The BIR may issue an authority to do business under its name if indeed it is already registered.
Approval is necessary to engage in any business or occupation pursuant to Section 3 of the Republic Act No. 5059, as amended by PD No. 1606 otherwise known as the Charter of Barrio Charter. A barangay clearance with the annotation “all clear” must be secured from the barangay concerned where your place of business is located before applying with DTI/SEC for a license to operate. Without this, no authority will issue your application even though you have all requirements for registration and licensing except this one.
2. Prepare Documents
To apply for a business permit at DTI, general information required includes articles of incorporation (for corporations), partnership agreement (for), and other supporting papers e.g. Board Resolution, copy of the SEC and DTI approval, NBI clearance, and tax identification card (TIN) among others.
3. General Requirements
This includes submission of a complete application, documentary stamp taxes in lieu of stamps for stamps issued by other offices not returned to BIR, a general power of attorney from stockholders if it is a corporation, a latest financial statement with official receipts/certificate for payment of taxes/stamps due on articles submitted together with the articles of incorporation or partnership agreement, signature cards for stockholders or partners if a privately-owned corporation or a partnership is involved and duly accomplished forms for business name registration under BC.
4. Business License Fee
The minimum paid-up capital requirements ranged from P10,000 for micro-type of business to P300,000 for small and medium type.
5. Shares of Stock
There is no specific requirement on the minimum number (at least 10 or more) or percentage (at least 60%) of stockholders owning the majority shareholding in a corporation except as provided by law. However, it is advisable that there should be an even distribution of shares among all authorized stockholders under the articles of incorporation and by-laws for easy transferability (one owner one share concept). A resolution from the board meeting signed and approved by all stockholders must be submitted to DTI.
6. Local Regulations
The location where your business will operate must comply with existing local zoning ordinances/regulations such as those issued by the City or Municipality regarding minimum lot sizes and road right-of-way. Pay a visit to https://www.incorp.asia/philippines/services/incorporation/ so you’ll learn a lot more about starting a business. As an entrepreneur, you will always be one step ahead of the competition if you are well prepared. So study your options carefully and make sure to find out all relevant information before jumping into new business opportunities.