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.

Barangay Permits

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.

BIR Permits

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.

City permits

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/

Maridel Cadion About Maridel Cadion
Maridel Villar Cadion is a businesswoman by experience and is currently majoring in Business Entpreneurship.

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  • viene taylor

    Thank you for the guide.

    • maridelcadion

      Your Welcome Ms. Taylor.

  • expatzie

    Hi Maridelcadion,

    How about doing an online e-commerce store. What are the steps and procedure to register?

    thanks

    • maridelcadion

      I think it is the same registering with non online business, all you need to do is to categorize your business as online and I hear DTI is on the process of creating online seal to make your site credible for the possible buyers.

      • Love

        hi miss mariedel,
        thankyou for this infos,very helpfulbut gusto ko lang magtanong if kailangan ba ng capita naipapkiaa kaagad pag nag apply ng mga permits fr a new business?im planning kasi magtayo ng networking business…pa nagregister ba kailangan bangmay office na kaagad?

        • maridelcadion

          Hi Love, Nope hindi mo kailangan ng pera na ipapakita sa pag register ng business pero ung business location mo at office, uu kasi pag dating mo sa mayor’s permit e check check yung office mo from safety, health at physical address.

          • fidelyn

            hello! asked ko lng if kailangan pa ba ng permit kung buy and sell ng palay ang business ko at ns liblib n lugar? thanks in advance

  • Rosalyn Del Amen

    How can I make a Business plan para Sa bankloan?

    • maridelcadion

      All i know Ms Rosalyn, you need to create a feasibility of your business, it can be a expansion or a new business proposal. I think BDO, Landbank and other bank has a guide for that and it can be get at there website or simply call them and talk to the loan officer. Thanks

  • lhen

    HI! im planning to open a biz but im caught in between kasi yung partner ko balak magpadala ng veggies dito sa phils at the same time mga clothing line, di ba magkaiba ng items yun pag mag aapply na ng permit? help me wla tlga me alam pa pano mag set up! thanks po!

    • maridelcadion

      Based on my Ate experience, nag pa register sya ng dry goods business parang apparel business o boutique, she receive the same item like yours but it came from India. okay naman walang sya naging probs. You can simply go to DTI, ask for assistance kung saan talaga mag fall ang inyong business then they will assist you. So far with my experience nag aasist tlaga mga taga DTI at helpful pa sila pag may mga tanong ka na ganon. So the first step sis, is to go to the Nearest DTI pero bago yun think forst the name of your business.

      • maridelcadion

        In addition, it can fall in dry goods or kind of boutique, it is different item but it can be in one store like sari-sari store, they have cigarettes and medicines.

  • christopher barcelon

    hi ms maridel!
    first of all i would like to thank you for this tips!! it is very helpful to me.
    i am planning to start kc a business in construction industry (im a young civil engr). actually wala pa akong plano sna magregister, kaya lng kc ung client kong kausap ngayon hinahanapan ako ng receipt kpag magrelease na cia ng pera (for Downpayment). ung iba ko kcng nging clients di na cla nagrequest ng receipt kc dpa nman kalakihan ang proj at di sila mciadong maselan. actually this would be my 3rd project only. un nga ngrrequest ung client ko ngaun ng receipt kaya ibg sabihin kailangan kong magpa-register na di po b? ask ko lng dn kung ms maridel kung as sole proprietor ba khit wala akong projects na mkukuha sa mga ssunod e kailangan ko p dng magfile ng tax? nagwoworry kc ako kpg wala akong mkuha proj bka habulin ako ng bir, hehe saka tlgng zero knowledge pa ako about registering tlg.. sana matulungan nyo ho ako ms maridel..
    at ska nga pla are you related to merlyn cadion? naging katrabaho ko kc cia wayback 2007-2009 nung nsa private company p ko,

    thanks a lot!!

    • maridelcadion

      Hi Sir, all i know pag kumuha ka ng license sa DTI as sole proprietor wala akung nakikita doon na magiging problema mo sa BIR kasi mag iisue kanaman ng receipt, ung nag kaka probs lang ay yung hindi nag babayad ng buwis. If ever naman na wala kang transaction o walang services hnd mo naman kailangan mag bayad sa BIR kasi lalabas yun na no transaction or no operation. I encourage you sir to register your business kasi makakatulong din yan sau at baka yan ang simula ng malalaking transaction mo kasi legit na ang business mo. About Merlyn, i think wala ako idea kung close relatives ko sya, hnd ko pa kasi na meet yun eh.

      Anyway thanks for your question. More power!

  • jingay

    Ms. Maridel, would i require a business license to operate for single proprietor if i will put up an online marketing and social media website?? also for single proprietor how many people can i employ??

    • maridelcadion

      I prefer yes, cause it will also help to increase your reputation and it will help you to make your business legit. It’s a good factor to get more clients. You can employ as many, single proprietor means your the only owner but if it compose of more than 5 owners, it will fall as corporation. As I know, you can employ even hundreds of staff’s.

  • Ming Casis

    thank you for the information

    • maridelcadion

      No problem miss ming.

  • Ryan Bardaje

    how about on the BIR sides, what do i need to accomplish after registering my business., do i stil need to pay the monthly sales tax, quartelry tax, expanded tax and any other.

    • maridelcadion

      What I know for VAT registered establishment they have to rendered report every 10th of the month and as I experience we do quarterly tax payment. you can check more details here http://www.bir.gov.ph/birforms/form_pay.htm hope it will help you Ryan. I’m not see expert when it come of taxation.

      • Ryan Bardaje

        thanks ms. maridel. coz it is quite confusing for me rightnow. it is more complex than i imagined hehe… thank you…

      • Annadeguzman

        Hi Ms. maridelcadion..just want to ask..regarding s BIR..after ko b mag register s DTI pag punta ko b ng BIR need pba ideclare ang capital khit n sole proprietorship ako?..ska yung s pag submit ng mga tax clearance?..every year b sya or kpag mg close transaction k lng in a month> please help me to know before i got to BIR..thanks…………………..

  • Gunnar

    Hi can you recommend a lawyer or anoother professional who can be helpful in the process of starting a small business within communications and marketing

    • maridelcadion

      Hi Gunnar, please email us at info@smallbusinessidear.com and we can forward you to our BPO business specialist. Thanks

  • Shelley De Guzman

    Good day! Just wanna ask, is this also applicable when I want to start my own online business? 🙂 Thank you!

    • maridelcadion

      All business should have proper documentation, however there are instance na hnd naman like mga sari-sari store sa mga liblib na barangay. What type of business do you like to start Shelley?

  • Annadeguzman

    Hi Ms. maridelcadion..just want to ask..regarding s BIR..after ko b mag register s DTI pag punta ko b ng BIR need pba ideclare ang capital khit n sole proprietorship ako?..ska yung s pag submit ng mga tax clearance?..every year b sya or kpag mg close transaction k lng in a month> please help me to know before i got to BIR..thanks

    • maridelcadion

      I suggest to bring all the documents you currently have, at uu, declaration of amount kailangan din yun, I suggest if you can talk to an accountant in connection with your situation. Please read here din pala: http://www.bir.gov.ph/reginfo/regtin.htm under
      FOR SELF-EMPLOYED AND MIXED INCOME INDIVIDUALS nandyan ang requirements sa pag register sa BIR.

  • karen

    start working online while keeping your business. Visit us at http://www.unemployedpinoys.com

  • Marites

    Hi maridel, just want to ask u. After 4 years of being legit sa business nagsarado ako kasi medyo humina na ang internet shop ko ang i did not renew in the following year. Totoo ba na dapat ay magreport ako sa BIR ng magsarado ako ng shop? Am i going to pay anything kung ginawa ko un? And now, i am planning to reopen my shop but in different city…pwede ko pa ba na gamitin ang dati ko ITR? Magmumulta kaya ako sa BIR? Your answer is appreciated. Thank you

    • maridelcadion

      Hi Marites,

      I’m not sure lang nito, pero ito pag kakaalam ko, dapat may none operation or closure report ka yata na ipapasa sa BIR at kung may babayaran ka naman, ang pag kaalam ko mag kakaroon ka talaga penalty pero hnd naman cguro malaki yun.

      About sa ITR sa different business location and new DTI name/corporation. pacnsya na wala pa kaming na process na ganito kaya wala pa kaming maisasagot sa ngayon.

      Thanks

    • maridelcadion

      You can also check here pala for Taxation samples: http://businesstips.ph/tax-penalties-in-the-philippines/

  • alsampang

    Hi Maridel,

    I was planning to put up a Property Management Business. I’m an OFW but would like to start my business while working here abroad. Does this procedure applies the same? or there’s a special permit for my planned business. Do I need to be a registered/licensed broker?

    Thank you in advance.

  • alsampang

    Hi Maridel,

    I was planning to put up a small Property Management business. Does this apply the same procedure? Additional question, do i have to be a licensed broker for this business although i will not be selling properties?

    Thank you in advance.

  • Marian

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  • grace

    Hi just want to ask kung need pa ba kumuha ng another mayors permit pag nagdagdag lng ng stall same location lng,same owner, and same business?

  • Marlon

    Hi. Dapat ba meron na Kong rented place bago magregister sa mga govt offices mentioned below? I’m planning to put up a tahian for golf bags.

  • Kimberley

    May I bother you? I am currently making a feasibility study. How could I get income tax rate? Thank you so much

  • Manny

    I am trying to setup a online business at home, which I would like to have registered in my home Will I be needing to get the approval of the home owner’s association, even if its just an online business and not an actual shop? Currently, I just post to free classified ad sites like olx.ph ayosdito.com and mybenta.com, but will would like to be registered to have the necessary paperwork.

    • Hildegarde Madeja

      I am also curious about that

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