Entrepreneurs who want to legally do business in the Philippines should start with exploring some viable options. A businessman just cannot jump into a business without familiarizing its technicalities. There are some things you need to take into consideration before you can operate your business.
You need to start with knowing the types of business ownership under the Philippine law:
1. Corporation
This type of business structure has five owners or more and they are referred to as shareholders. There are two types of corporation: stock corporation and non-stock corporation. With stock corporation, the capital is divided into shares and distributed to the investors. In turn, investors receive allotments and dividends, which will be based on the numbers of shares they have within the corporation.
A non-stock corporation is intended for public purposes and issuing shares of stock is already out of the picture. This corporation’s purpose is usually cultural, educational and charitable.
2. Partnership
There are two or more individuals involved in this type of business structure. This is why they are called partners according to the Civil Code of the Philippines. The partnership can either be a general partnership or a limited partnership. Partners in a general partnership only have a limited liability for the financial obligations while a limited partnership requires one person to have unlimited liability while the rest have liabilities based on their capital contribution amount.
3. Sole Proprietorship
As the name implies, this business structure is fully controlled and owned by an individual, which will also enjoy the profits and handle the liabilities of the business. For a sole proprietorship to be in effect, the owner must apply for a business name. It is also the proprietor’s obligation to register with the Department of Trade and Industry (DTI).
Important Things To Consider For The Business To Run Smoothly:
Your business cannot be considered legal without registering it with the Bureau of Internal Revenue. Make sure you register your business to the Revenue District Office (RDO) where your business is located. You will also need to secure a Certificate of Registration (COR) and Authority to Print (ATP) for your official receipts to be printed. You should also keep in mind that only printers accredited by BIR will be acknowledged. The official receipts should show that it is BIR accredited. Even books of account must bear BIR stamp.
Aside from BIR, you should also register your business and employees with the Social Security System (SSS), Home Development Mutual Fund (Pag-ibig) and Philippine Health Insurance (Philhealth). These government entities will also require you to submit reports. It is imperative that you register newly-hired employees with these government agencies as well.
