Registering your business doesn’t have to be done by an accountant; You can do it yourself! However, you will need time to visit the different government agencies and a few minutes to learn the 4 simple steps below.
We will be honest - it isn’t that hard, but it entails a lot of patience! The steps below should give you guidance.
1. Register your Business Name
If you’ve decided to register your business as a sole proprietorship, you simply need to go to the Department of Trade and Industry (DTI) website and register your business name. You’ll be able to secure a business name certificate immediately after you pay the registration fee ranging from Php200 to Php2,000. This should take you less than an hour to complete.
Registering a corporation or partnership would take more time. To do this, you need to file your registration with the Securities and Exchange Commission (SEC) through their online system. You will fill-out the online form and submit for SEC’s review and validation. You can also pay the registration fee online; the amount will depend on your capitalization. The process leading to acquiring your SEC Certificate could take a few months.
TIP THAT MATTERS:
If you are a freelancer/professional/consultant delivering services and working from home (e.g., CPA, social media manager, IT expert, youtuber, etc.), you may opt not to register a business name. You may simply proceed to your city/municipal hall to secure a Professional Tax Receipt (if you will be practicing a profession) or an Occupational Tax Receipt; pay a fee ranging from Php300 to Php600. After which, you may proceed directly to Step#3.
2. Get a Barangay Clearance
After securing your DTI/SEC Certificate, you’ll then need to head to the barangay where your business is located to secure your Barangay Clearance. Visit your barangay hall and obtain an application form. Submit the furnished form together with the below usual requirements.
Proof of address and sketch of the business site
Contract of Lease (if you’re leasing out the property where your business is located) or the Certificate of Land Title (if you own the property where your business is located)
Registration Fee (Fees typically range from Php500 to Php1,000)
This process usually takes less than a day.
3. Secure a Mayor's Permit
Securing a mayor’s permit takes more work and requires more documents, so it’s best to be prepared. The following documents are the usual requirements:
Community Tax Certificate (To obtain this, head to the Municipal Treasurer where you’ll be required to pay a certain fee, depending on your capitalization)
Occupancy Certificate/Land Title/Contract of Lease (as applicable)
Fire inspection certificate (from the Bureau of Fire Protection Office)
Sketch of business site
Note that your city/municipal hall may ask for other requirements. This process usually takes less than a week BUT highly depends on your city/municipality.
TIP THAT MATTERS:
If your total assets do not exceed Php3,000,000, you may be qualified to register as a Barangay Micro Business Enterprise (BMBE). Go to DTI’s website for BMBE application to check if your business is qualified and to register. BMBE application is free of charge.
4. Register your business with the Bureau of Internal Revenue (BIR)
The below is the usual process with the usual set of requirements that you need.
[Note: Early in 2023, the BIR launched its Online Application and Update System (ORUS). This may be used for business registration. We have not personally used this application yet and as to the date of writing this article, some Revenue District Offices (RDOs) still prefer that we register onsite. We’ll update this article once we get further acquainted with ORUS.]
(a) Proceed to your RDO and bring the following:
For Sole Proprietorships/Freelancers/Professionals/Consultants
BIR Form 1901 (Application Form for Self-Employed) - Prepare at least 2 copies
Valid government identification card showing your registered address (e.g., Driver’s License, Unified Multi-purpose ID, Postal ID)
DTI Certificate, if applicable
Mayor’s Permit, if applicable
Certificate of Authority if BMBE-registered
BIR Form 1903 (Application Form for Corporations/Partnerships) - Prepare at least 2 copies
Articles of Incorporation/Partnership
Certificate of Authority if BMBE-registered
For Corporations, proof of payment of the Documentary Stamp Tax (DST) for the original issuance of shares
If you are renting an office, proof of payment of the DST on the Contract of Lease
Once your documents have been checked by the BIR officer, proceed to payment of the registration fee (Php500) and pay other charges (usually around Php130). In some cases, the BIR Certificate of Registration (COR or BIR Form 2303) may be released within the same day (usually for freelancers/professionals/consultants). The BIR may also release your COR via email.
(b) Look for an accredited printer to print your Official Receipts and Invoices and have the following ready:
BIR Form 1906 (Application for Authority to Print Receipts and Invoices)
Proof of payment of BIR registration fee (BIR Form 0605)
Printing would normally cost you Php2,000 for 10 booklets.
(c) Purchase your books of accounts and register with the BIR.
[Note: Registration of books of accounts can now also be done using ORUS.]
You will spend around Php300 to purchase the books from any bookstore. There is no fee in the registration of books of accounts with the BIR.
You may view this article for further guidance about books of accounts.
The above process, including printing of Official Receipts and Invoices, usually takes 3 to 4 weeks (printing usually takes 2 weeks).
If you have employees, there’ll be an additional step for you to register with the Social Security System, Philippine Health Insurance Corporation, Home Development Mutual Fund and Department of Labor and Employment. You will need to visit their offices to register.
That is it! Registering your business may seem like an exasperating task; nonetheless, this is an important step for every entrepreneur to have a legitimate business. Best of luck!
Make sure to check out this article as well - 5 Practical Guidelines to follow after Business Registration.
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Disclaimer: Numbers that Matter Inc. aims to curate topics that are simplified and easily digestible for micro, small and medium enterprises, by balancing our technical know-hows as accounting professionals and the practical experiences of our team working on ground with our clients. There may be technicalities intentionally omitted from our content to preserve its simplicity. Any practical tip is purely the opinion of the team and is merely informal advice, and thus, should not be taken as a definitive rule. Should you have any specific questions, feel free to message the team at email@example.com and we’d be happy to discuss with you further.
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