in the philippines
Business in the Philippines
Procedure Putting up Business in the Philippines

Procedure Putting up a business in the Philippines

Should I start my own business?  Have you ever asked yourself this question before?  It may not be surprising that  nowadays there are growing number of Filipinos interested in starting up their own business.  More and more people are leaving their 8 to 5 hour routinary work in exchange for the adventure of starting their […]

In the Philippines administrator

Should I start my own business?  Have you ever asked yourself this question before?  It may not be surprising that  nowadays there are growing number of Filipinos interested in starting up their own business.  More and more people are leaving their 8 to 5 hour routinary work in exchange for the adventure of starting their own. So many among us have the desire to be their own boss .  After all there are joys of being your own boss.  Others on the otherhand are tempted to create their own in quest of ending up a millionaire after hearing numerous success stories of businesses that started small. So if you have an idea and you think it’s worth it or probably have an idea but still skeptical to embark in this adventure, take note of the following step by step procedure in creating your own business:

Starting your own business!

Starting your own business!

In putting up your own business you have two options, you either choose to get a Franchise of an existing successful company or creating your own from scratch. Whatever your choice is, the same procedure applies on its basic procedures.  Additional information on Franchising is discussed on franchising chapter.

1.  First, start by deciding which business form is applicable to you;

Single Propertorship, when you are the sole owner and the sole responsible of the business. It simpler and easier to put up but it could have it’s own disadvantages too.  This means that you and your personal assets  are liable when problem arises in the future.

Partnership, when there are two owners of the business.  Like the single propertorship it has its own advantage and disadvantages too.

Corporation, is an entity of three or more people with common interest , a form employed to protect the personal assests of the shareholders from debt. Where its only the company and its asets are the only one liable when problem arises.

For  both Single and Partnership, the procedure starts by going to the DTI (Department of Trade and Industry) office nearest your domicile for the business name registration. This is the most crucial part of your business as the name of your business is something that will make or break your concept.  DTI have recently made strict rules on registering your names: it should not be a common name or a business name that sounds like an existing one  as to avoid confusion. Additional   guidelines on this is written on your application form.  You need to have at least three possible names on my mind, meaning if the first one  exist already you still have the two others as option.  Next you will be ask on the scope of your business name registration: within baranggay, city, region or nationwide.  And the amount of your payment will depend on its scope.  If you have no time to go to their nearest office for this you can do this procedure  entirely online.

For the corporation form on the otherhand, it is the Securities and Exchange Commission (SEC) located along EDSA in front of EDSA Shrine and POEA (Philippine Overseas and Employment Agency) one must go.  To facilitate your task try to reserve the name of your corporation online .  You can reserve the name for at least one month or up to three months.  After reserving it online, print this proof and go to the SEC office at the ground floor directly at the cashier for payment.  You will be paying 40 pesos per stamp which represents the number of months you are reserving the name.  Do not think that one month is enough to process your application.  It is advisable to pay for at least three months.  But if you think one month is enough, no worries for you can always extend it. A much detailed step by step procedures on creating a corporation is discussed in the creation of corporation chapter.

2.  Get the Baranggay Clearance.

Again the facility of getting your barangay clearance normally depends on the baranggay where you will be operating your business.  Sometimes a simple photocopy of your DTI business name registration or SEC Registration is the sole requirement while others could entail a visit of  the site of your proposed business to see the veracity of  why they ney to issue a clearance.  Some may also require a general insurance policy for your business like in some barangays in Makati.  Nonetheless, go there directly and ask for the requirements.

3.  Get the Mayor’s Permit

With the decentralisation of the issuance of the business permit it is the local city where we will be operating that we go to get a permit.  Again this phase depends on what type of business you will be operating and the city you will be doing your business.  Restaurants and all the other business that hygiene is necessary a Sanitary permit is also required.  In Quezon City for example , the owner and all employees are  required to undergo seminar on handling of food and an additional AIDS seminar before your Sanitary Permit ID is issued.  There are also medical and laboratory exams demanded to be sure that you are fit to do this kind of business.  Again this depends on the business and the are you will be doing your business.  Be informed to avoid unnecessary hassle along the way.  In getting the mayor’s permit for your business the usual requirements are as follows: Locational Clearance (an approval that there has been no renovation done on the location of the future business), Barangay Clearance, DTI Business Registration  or SEC Registration, Proof of ownership of the land/Contract of Lease that are duly notarized, Occupancy Permit (Ask a copfy from your landlord), Third Party Liability Insurance .  Again you may have additional requirements depending on the city you will be operating.

4.  Obtain a Fire Clearance

Go to the Bureau of Fire Protection nearest to your business address for the Fire Clearance.  Be warned that you might encounter red tape/corruption in getting this clearance.  Depending on your business you might be needing installation of emergency light/s and fire extinguisher on your establishment.

5. Go to the BIR (Bureau of Internal Revenue)

For registration of your  value added tax (VAT) or NON VAT business go to the Bureau of Internal Revenue (BIR). assigned to the area where you will be operating.  Timeline is two (2) days and the cost is Php550 – Php1,000 which includes registration fee + certification fee + documentary stamp tax. You will also be needing an authority to print receipt or invoices depending your business.  Get an application for registration (BIR Forms No. 1901 or 1903),  original form or photocopy of TIN card; and (5)Proof of payment of annual registration fee (BIR Form No. 0605). This part could take about 1 to 2 weeks.

6.  Get SSS and Philhealth Card

The SSS (Social Security Services) card has no cost but you have to wait seven  days for processing. To register with the SSS the company must submit the following documents – (1)Employer registration form (Form R-1); (2) Employment report (Form R-1A); (3) List of employees, specifying their birth dates, positions, monthly salary and date of employment; and (4) Articles of incorporation, bylaws and SEC registration or the certificate of registration with the Department of Trade and Industry (DTI). The employees may attend a SSS training seminar after registration. SSS prefers that all members go through such training so that each member is aware of their rights and obligations. To register with PhilHealth, the company must submit the following documents – (1) Employer data record (Form ER1); (2) Report of employee-members (Form ER2); (3) SEC registration; (4)BIR registration; and (5) Copy of business permit. It takes about three months for the release of this card.

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One Comment

  1. Rose Marie B. Daaro added these pithy words on January 8, 2013 | Permalink

    cause I’m Entrepreneur I like partnership

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  1. […] store (convenience store type), bakeries, beauty parlors, dressmakers , food stands, etc.  In procedures in putting them up are the same as large scale […]


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