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Attorneys of the Philippines Legal News

Welcome to our legal news pages. Here is where we provide updates about what's happening in Philippines legal news, and publish helpful articles and tips for Pinoys researching legal matters.

Can You Be Imprisoned For Non-Payment Of Debt?

Have you been screening your phone calls to avoid collectors who are constantly nagging you to settle your unpaid credit card balance? Have you been threatened to face a lawsuit if you fail to repay a lender? If incessant calls from creditors caused you to be allergic to phone calls, being armed with the basic principles of the consequences for non-payment of debt can give you greater peace of mind. In fact, it can be a whiff of fresh air if you heard the statement that no one will end up in jail for non-payment of debt. 

Before you allow paranoia to feast on you, know more about the laws associated with unsettled debt.

Some common laws that are said to violate the constitutional prohibition against non-imprisonment of debt:

Credit Cards

The Access Devices Regulation Act of 1998 (RA. 8484) states that any person who obtains the money or anything that is valuable with the use of an access device with the sole intent to defraud or with intent to gain and fleeing once motive has been executed will be held liable for a crime punishable with a fine and imprisonment. In addition, a cardholder who intentionally abandons the residence, place of employment or business that was declared on the application or credit card without informing the credit card company of the current place where he could be reached will also be liable for a crime. If during the abandonment, the person has outstanding and unpaid balance which is past due for at least 90 days and is more than P10,000.00, the individual shall be prima facie presumed to have used his access device or credit card with intent to defraud.

Bouncing Checks 

Bouncing Checks Law (BP22) has also been viewed as a violation of constitutional prohibition against non-imprisonment for debt. In the context of this law, the non-payment of an obligation is not its main concern. The law is not designed to force a debtor to settle his debt. The main purpose of the law is to prevent anyone with the gumption to make checks that don’t have any value with the intention of putting them in circulation. Checks have become a substitute for cash and widely accepted as a medium of payment especially in trade and commerce and when the confidence of using these checks are marred due to its misuse, its value and usefulness will also be diminished. 

Trust Receipts

Trust receipts and bouncing checks share the same argument based on the Trust Receipts Law (PD 115), which states, if a person fails to turn over the proceeds of the sale of goods which are considered covered by a trust receipt or if the person fails to return said goods if they have not been sold, penal sanctions shall be imposed. The punishment is due to the abuse of confidence and dishonesty in the handling of goods or money.

Get To Know The Types Of Taxes When Doing Business In The Philippines

Being familiar with business tax in the Philippines is an important part of starting a business. You don’t necessarily have to be an expert, but you need to gain some basic knowledge about the tax so mistakes in tax payment can be prevented. Some business owners leave this matter to their accountant or bookkeeper but when problems arise, they are the ones who are liable. Once you are aware of the business taxes in the Philippines, you are taking a great step to avoiding tax violations. 

Two kinds of taxes:

1. National Taxes – This type of tax refers to the tax you pay to the government. The tax is remitted to the Bureau of Internal Revenue (BIR). Some examples of national taxes are Value Added Tax (VAT), income tax, percentage tax, excise tax, capital gains tax and many others. 

2. Local Taxes – These are taxes that you pay through the local government units (LGU). These government units include cities, barangays, municipalities and provinces. Examples of local taxes include community tax, professional tax, amusement tax and other taxes that fall under the local taxes category. 

Business Taxes 

• Value Added Tax (VAT) - This type of business tax is considered an indirect tax. This is the reason it can be passed on to the buyer, lessee or transferee. This is collected from the seller when properties or goods are sold. Whether it is trade or business, Value Added Tax will be imposed. The amount you are going to pay will be based on the value you added to the product cost. Whether or not you earn net profit, you are still required to pay value added tax. However, when projected sales are deemed lower than required, the company is already considered exempted from paying the tax. 

• Excise Tax – This type of business tax is in additional to the value-added tax. This will be imposed for goods that are produced in the Philippines. Excise taxes are applied when these goods are intended for consumption or domestic sales. 

• Percentage Tax – When gross annual receipts and sales do not exceed the required amount, the percentage tax will be imposed on entities or individuals. Persons and entities are required to file percentage tax return not later than the 20th days following the end of each month. When a person subject to percentage taxes decides to retire from a business, the Revenue District Office must be notified within 20 days after the business closes.

Tips For Legally Doing Business In The Philippines

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. 

Why Documenting Oral Advice Is Important?

These days, cases are filed due to the negligence of documenting oral advice and while majority of clients may still give little importance to this, its effect can create a serious damage to the business. This is why it is every business owner’s responsibility to document oral advice especially if it involves information that is beneficial to the company. Lawyers will consider the defense weak if no strong evidence is presented. When documenting oral advice, some key items or essential details must be present. Documentation that lacks essential information can be compared to an undocumented oral advice. The documents’ principal rule: if it’s not there, it did not happen. 

All You Need To Know About Documenting Oral Advice

There are sensitive issues concerning your business that require advice from experts and it does carry weight especially if you are going to use this in defense for any claims. The documentation is more than enough to strengthen any claim and it serves as a way to validate any agreement or discussion that took place. It is also necessary that you include some essential details such as the date of the discussion, the names of participants, the facts that have been provided, and any considerations that the advisor may have given, notice that proves there was no legal advice provided and the items that show recommendations and other additional actions that have to be taken. 

Business operations will also receive unsolicited advice especially regarding the approaches that must be used for the betterment of client operation. While these are considered useful and something that the client can benefit from, it is necessary that the advice must be documented following a specific format. 

The discussion is documented with the use of firm working papers, but this should also include some essential information such as the recommendations and the name of the people involved in the discussion including the a third party if present. These documents need to be written in vivid details because if there are any allegations, the documentation will be instrumental for the resolution. 

Giving oral advice may seem like a very simple way to provide suggestions but it can have a deleterious effect if this is not taken seriously. For matters that can create a huge impact on your business, a document should be kept in mind. Documentation is not just about an issue of trust but a matter of clarifying things especially when you need to use the advice for your future endeavors. It can save you a costly trip to the court as you defend yourself against allegations. 

Why You Should Use an Attorney to Prepare Your Will

There is no substitute for legal advice from an attorney especially when it comes to preparing a will. In fact, a will must not be taken lightly as it is a serious matter. Attempting to write a will on your own is going to be risky and may even result in committing costly mistakes. While you might be vacillating on whether to get an attorney to complete your will or do it yourself, these following reasons might just enlighten you on the importance of an attorney: 

Specific Terms Are Used To Avoid Confusion

Vague terms can wreak havoc on completing your will and you might run the risk of being misinterpreted. The attorney uses a standard language for everyone to understand the content of your will. With the standard language, confusions are prevented and the message is conveyed to your beneficiaries and will executors. 

Error-Free

Homemade wills are less likely to be free of errors because it does not undergo the same scrutiny and examination that it gets when it is done by attorneys. Let’s face it, there are some technicalities involved in completing a will and attorneys are detail-oriented. They know the process of preparing a will, but if you are going to make your own will without seeking help from professionals, you might commit errors that are often difficult to undo. Some of the major errors that you may commit include forgetting to keep your will updated, forgetting to include your sign in the will, adding amendments and many others. 

The Will Is Based On Solid Facts 

Attorneys have undergone extensive training to familiarize themselves with the law’s intricacy. Imagine the time and effort they invested to acquire their title. If you are going to write your own will based on assumptions, there might be some areas that remain unclear to you. There will be questions lingering in your mind and they will remain unanswered unless you decide to get help. Contingencies are covered by an attorney that specializes in will preparation. There will be no confusions and your questions are answered point blank. 

Familiarity With Inheritance Tax and Law

Inheritance law is essential when preparing a will. Since it is governed by Civil Code, everything must be accurate and concise. An attorney can provide the right solutions to various inheritance issues that DIY will preparation may have possibly missed. 

Essentials For Preparing A Will

• It must be properly executed.

The will should include a date and place of signing. There should be witnesses in your presence before signing could take place. 

• The testator must be of legal age.

A testator must be at least eighteen years of age to be considered qualified for preparing a will. 

• The testator must have a sound mind.

It is also important that you are fully aware you are making a will. You should know the names of beneficiaries or descendants. 

• The will must be properly signed.

An unsigned will is considered invalid. With that being said, it is required that you voluntarily sign your will. Alternative provisions will be made if there are some unlikely circumstances that deterred a testator to sign the will such as illness or illiteracy.  

• There must be a clear intention to transfer the property. 

A statement with your intention to transfer the property to specific persons must also be prepared. 

5 Helpful Tips When Setting Up Your Business

It is a brave move for anyone to decide on starting a business and giving up a job routine they have been accustomed to for years. While being your own boss is such a dream come true, there is more to running a business than meets the eye. Before you consider taking that huge leap, arm yourself with knowledge about business principles. Otherwise, you will be doomed to fail.

No one can really predict whether a business is viable or not because it solely depends on how you manage it. If you do not have any business background, you may feel as though a business is a total alien landscape. Everything seems foreign to you and it is like going to a battle unarmed. While establishing a path may seem very challenging, learning the business principles will lead you to the road of success.

Create A Feasibility Study

The most common mistake that people make is investing their hard earned money into a business they are not even familiar with. This is the kind of risk that is the hardest to take because if things don’t go as planned, you have to start from scratch and this means spending vast amounts of money. In a feasibility study, you will cover the following areas: products and services, target market, suppliers, competitions, pricing and marketing techniques. With all these in mind, you are slowly putting things in their proper perspectives. The main purpose of creating a feasibility study is for you to determine the nature of business that suits your skills. You can also learn more about your target audience or potential customers’ needs and wants with feasibility study. If you already have a competition before you start your own business, you have an idea how you can stay ahead of the game.

Formulate A Business Plan

Once you have identified viable products and services, the next step is to create a business plan. If you do not have a strong background in business management, find someone who can help you with drafting the plan. The business plan should include essential information on the nature of your business. Aside from the summary of the product, readers must also obtain details of your product. A business proposal must also be kept in mind and each section must outline the strategies you have developed for your business. Don’t forget to include your competition and budget in your business plan as well. Your projections must be realistic and it should the cost of the product, projected sales and even the financial requirements.

Analyze The Availability Of Cash Flow

A steady cash flow is going to be necessary if you want your business to be smooth-sailing. However, when cash flow becomes unavailable, there are still other financial institutions that will provide you assistance in fulfilling your business needs. You just have to see to it you have a sound financial projection or your objective of making a profit will be defeated. Prepare a financial report so you can keep track of your finances. Hire accounting or bookkeeping professionals for this task so you can keep your budget in check. Major business losses are usually due to financial mismanagement and if you want to increase sales and make your business more profitable, you should always keep a record of your financial activity.

Seek All The Help You Can Get

Some entrepreneurial hopefuls end up bursting their tiny bubble due to the lack of business knowledge. You may have the funding and a viable product to set up a business but do you really have what it takes to increase your chances for success? Investing your money in a business is a game of survival and those who manage to keep up with the competition win. Get expert advice so you will know how you can make your business more profitable.

Secure All The Necessary Permits

As an entrepreneur, it is your obligation to follow business rules which include securing a business permit. There are several steps involved in getting a business permit and you are not allowed to operate your business if these have not been secured. For this process, prepare all the essential documents such as notarized documents, certificate of deposit, clearance, receipts and other requirements you need for your business permit.



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