Becoming an entrepreneur is one of the most fulfilling ways to live life these days. You not only get to earn good income, but as well do it without working for someone else. But mind you, starting a business isn’t easy; apart from setting up the stuff that you plan to sell to your target market, you have to process the paperwork. Yes, in order to achieve smooth business operations, your legal documents should be completed first.
Establishing a single proprietorship business in the Philippines is less complicated than that of bigger companies and corporations. You just have to be well aware of the papers to process, where to work on them, and how much money to shell out to iron out the documents.
Before anything else, you should be at least 18 years old and a Filipino citizen in order to register a sole proprietorship business. If you already possess those prerequisites, then you may go ahead and process the paperwork.
The first place in which you can register your business is at the Barangay level. You have to acquire a business clearance in the Barangay in which you are going to set up your business office, so that you will be recognized accordingly in your village. You will also need a Barangay clearance when applying for permits in higher government offices as you push through with your registration.
A Barangay clearance has a minimal processing fee, and you can get it within the day.
Department of Trade in Industry Registration
Probably the most important document that you have to acquire when starting a single proprietorship business is a DTI registration. You will have to go the DTI office in your city or municipality and apply for a business registration, so that your business name will be entered at the DTI Business Name Registration System.
Once your business name is registered, you will receive a Certificate of Business Name Registration, which you will then present to the other offices to complete your business papers.
You will also receive a Transaction Reference Number Acknowledgment from the DTI BNRS within a few days. You may want to print and include this in your papers when applying for city permits and bank accounts later on.
After registering your business at the DTI, you will have to do the same process this time at the Bureau of Internal Revenue. In this office, you will present your DTI registration, along with your other business requirements, such as your TIN and SS number.
If you don’t have a TIN (taxpayer identification number) yet, you may have to apply for one at the same office. However, if you have been previously employed and were issued a TIN by your former employer, then you can use that instead.
The same thing applies with the SS number, although if you are still categorized as “employed”, you may have to change that to “self-employed” as you are about to manage your own business.
Once you’ve completed your registration with the BIR and DTI, then you may proceed to the City Mayor’s office in your area to apply for a business permit. You will also have to submit your BIR and DTI registrations in order to be given city permit.
The standard application fee for city permits for sole proprietorship businesses is P300.00, plus P15 for documentary stamps.
Other things you need
When applying for business permits, you should be prepared to present and submit other requirements. These include your proof of citizenship (PRC ID, voter’s ID, birth certificate, passport), a signed copy of the undertaking from DTI BNRS, and identical passport size photos (with signature of the owner at the back). You may have to submit photocopies of your IDs and certificates, so have them printed first before pursuing your application.
If you are starting a franchise business, you must submit a photocopy of the franchise agreement, with each page certified by the franchisor and franchise, as well as the Business Name Certificate of the franchisor.
Some tips to remember
Once you have completed your business registration, it is important that you make multiple copies of each document, and group them accordingly. This is because you will have to present these papers to inspectors, and as well as to potential investors who you may want to do partnerships with in the future.
You will also use these papers when applying for business bank accounts, as well as PhilHealth and social security accounts for your employees (if ever you start hiring manpower). These documents likewise make you eligible for business loans.
Business permits also have to be renewed every year. A renewal fee of P300 is required at the DTI, while renewal fees vary at the city and Barangay levels. If you renew after 90 days from the expiration of your permits, you will be required to pay a surcharge of P100.
To seek for more information, please post your question in our forum: http://www.smallbusinessidear.com/forums/topic/setting-up-sole-proprietorship-business-in-the-philippines/
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