What is Company Registration in Philippines?
For business startup in Philippines, company registration process is done with the government agencies and authorities. Registration process makes the company legitimate and duly registered.
One can register their business as a single proprietorship, partnership or corporation. Special type of organization can also be registered as an association or a cooperative.
In Indonesia, corporation is a legal entity which is separate and distinct from its owners. Legal rights and obligations of the entity will be same as rights and obligations of the individual. Entity is eligible to enter into contracts, loan, hire employees, pay taxes, etc.
This type of entity is formed by at least five individuals called incorporators. Corporation ownership is divided into shares of stock. Under this, corporation issues stock to individuals or other businesses and they become owners or stockholders of the corporation.
Advantages of Corporation
- Under this, owners are not personally liable for risk and liability and it is limited to the corporation only.
- Capital can be easily increased through issuance of stocks to investors.
- Corporation is in the capacity to act independently similar to individual.
- Under this, decision making is shared by the board of directors, not sole individual.
Disadvantages of Corporation
- It is more costly to set-up in comparison to sole proprietor.
- Under this, more government reportorial requirements and laws are mandatory.
- There is higher capital requirement and operating cost.
- Higher tax rates.
Registration of Corporation
- Securities and Exchange Commission
- Local Government Units where the business is located:
- Barangay
- Mayor’s Office
- Bureau of Internal Revenue
- In case of employees there is a requirement to register to the following:
- Social Security System
- Philippine Health Insurance Corporation
- Home Development Mutual Fund
Incorporation Procedure
Here are the following guidelines to register a corporation in the Philippines:
- Name Reservation in Securities and Exchange Commission (SEC)
- Firstly check the availability of business name via Securities and Exchange Commission (SEC) online website or at SEC Office in Mandaluyong
- In case name is available, the next step is to register the business name via SEC online website or at SEC Office in Mandaluyong
- Following need to be prepared, sign and notarize:
- Articles of Incorporation;
- By-Laws
- Treasurer’s Affidavit;
- Joint affidavit of two incorporators undertaking to change name immediately on the receipt of the notice from the Securities and Exchange Commission (SEC) regarding the name change
- In case another corporation or partnership has acquired a prior right to the use that name or
- In case when name has been declared misleading, deceptive, confusingly similar to a registered name, or contrary to public morals, customs or public policy.
Note: It is not required if the Articles of incorporation have a provision on this commitment.
- Submit notarized documents to SEC Office
- Claim for SEC Certificate of Registration
This process will take at least one week on the submission of required documents.
- Acquire Barangay Clearance
The next step is to get a barangay clearance where the business is located after the registration of corporation with SEC.
Here are the following steps that need to be followed:
- To secure and fill-up application form, go to the barangay where the business is located
- Complete application form is required to be submitted with the following:
- Certificate of Business Registration from SEC
- Two valid ID proofs.
- Proof of Address such as Contract of Lease in case of rented or Certificate ofLand Title in case of owned.
This process will take one day on the submission of required documents.
- Acquire Business Permit from the Mayor’s Office
The next step after obtaining Barangay Clearance Certificate, Corporation has to acquire a Business Permit in the municipality where the business is located.
Here are the basic steps and requirements:
- To secure and fill up application form go to the municipal office where the business is located
- Complete application form is required to be submitted with the following:
- Certificate of Business Registration from SEC
- Barangay Clearance Certificate
- Two valid ID proofs
- Proof of Address such as Contract of Lease in case of rented or Certificate ofLand Title in case of owned.
This process will take at least one week on the submission of required documents however it can take longer time depending upon the permit requirements based on the industry.
- Register with the Bureau of Internal Revenue(BIR)
The next step after having Mayor’s Business Permit, one needs to register with the BIR.
Here are the basic steps and requirements:
- Go to the Regional District Office (RDO) where the business is located
- Fill-up registration form:
- BIR Form 1903 – Registration Application (For Partnership/Corporation)
- Following documents need to be submittedalong with the following:
- Certificate of Registration form SEC
- Barangay Clearance
- Business Permit From the Mayor’s Office
- Address Proof such as Contract of Lease in case of rented or Certificate of Land Title in case of owned
- Valid IDs, if applicable.
- Pay the Registration Form (BIR Form 0605) and Documentary Stamp Tax (BIR Form 2000), if applicable.
- Register book of accounts and receipts/invoices.
- Claim for Certificate of Registration (BIR Form 2303)
