Sole Proprietorship-is the form of business organization where the there is only one owner, the Proprietor.

-the ownership of the business is by private individual. Organizing a Sole Proprietorship 1. Register the name of the business in the Bureau of Domestic Trade -renewal of BDT permit is necessary for every 5years. 2. Pay the municipal licenses to the Local Government a. Secure a Certificate from RHU(Rural Health Unit) -health check up of the employees and the owner -sanitation inspection b. Secure a Certificate from Bureau of Fire -Safety Hazards and devices inspection (emergency lights, fire extinguishers, fire exits and other safety devices) c. Zoning - For implementation of restrictions. The inspection is to be done by the municipal Engineer or surveyor d. Barangay Clearance e. Police Clearance f. Garbage Disposal Clearance g. Garbage Fee Certificate e. Cedulla -you can only get your cedulla on the location of your business. 3. Apply for Non-VAT and Vat number ---DOCUMENTS REQUIRED FOR VAT REGISTRATION The application for registration is to be accompanied by the following: 1) Deposit receipt of prescribed amount towards fees for registration. Such deposit receipt is to be obtained from the appropriate treasury after payment of the fee amount. 2) Copy of the constitution document e.g. Partnership deed for a partnership firm, Memorandum and Articles of Association for a company. 3) Board Resolution authorizing the signatory to sign the application in case of company. 4) Proof of identification of the authorized signatory e.g. voter identity card, passport, driving license. 5) Proof of principal place of business e.g. rent receipt, lease agreement, electricity bill. ---Who is required to sign the application for registration? The Application for registration is required to be verified and signed by an authorized signatory. An authorized signatory for different categories of persons is: Proprietor, in case of proprietorship concern Managing partner, in case of partnership firm and where there is no managing partner, by any of the partners. Managing Director or authorized signatory, in case of a company. Karta, in case of Hindu Undivided Family and authorized signatory. ---If the gross annual income of your business is 1.5 Million you are VAT , but if below 1.5 Million it is non-vat. If you are non-vat you are required to pay 3% monthly of your gross sales, but in vat you are required to pay 12% of your monthly gross sales. 4. Register with the BIR the books of accounts and the business forms to be used. 1) Who are required to register with the BIR? Any person, whether natural or juridical, required under the authority of the Internal Revenue Code to make, render or file a return, statement or other documents shall be supplied with or assigned a Taxpayer Identification Number (TIN), which he shall indicate in such return, statement or document filed with the Bureau of Internal Revenue for his proper identification for tax purposes. 2) Are non-resident aliens and non-resident foreign corporations receiving income from sources within the Philippines required to register with the BIR? No, tax due from them shall be remitted/paid to the BIR by the payor who shall constitute as the withholding agent of the tax (RMC 39-95). 3) If the taxpayer is engaged in VATable activity, but the gross sales or receipts from business or practice of profession is P 550,000.00 or below, is he required to register? Yes, he is required to register as a Non-VAT taxpayer. However, if his gross sales or receipts is

00 but does not exceed P 550.out the boxes not applicable. 15) How are the registered activities reflected in the Certificate of Registration? The RDO issuing the Certificate of Registration shall reflect the registered activities in the Certificate by checking the box(es) corresponding to the approved registered activities. branch office. whose gross sales or receipts did not exceed P 100. a VAT taxpayer engaging in a non-VAT activity or vice versa) c) Major changes in business structure resulting to change of ownership 6) When is the taxpayer required to apply for registration and pay the registration fee? New taxpayers shall apply for registration and pay the registration fee before commencing their business. 7) Where should a taxpayer register? All taxpayers are required to register with the RDO having jurisdiction over the head office.e. what document will be issued to the taxpayer as proof of registration? Certificate of Registration (BIR Form 2303) 12) When will the Certificate of Registration be issued to the taxpayer? The Certificate of Registration (BIR Form 2303) will be issued not later than five (5) working days from filing of application and submission of all documentary requirements. 9) Who are required to register without paying the registration fee? a) Non-stock.00. there shall be a corresponding Certificate of Registration to be issued to the head office and each branch. In the case of marginal income earners with gross sales or receipts of P 100. 14) How many Certificate of Registration (BIR Form 2303) shall be issued by the Revenue District Office? For every Application for Registration. 8) Are branches. and upon presentation of duly validated BIR Form 0605 as proof of payment of Annual Registration Fee or Official Receipt. branch. and cooperatives (RMO 41-94) b) Government agencies and instrumentalities. 16) Why is there a need to cross-out in the Certificate of Registration the activities which have not been applied for registration by the taxpayer? This is to prevent the taxpayer from making undue alterations in his Certificate of Registration. taxpayers should pay the annual registration fee not later than January 31 every year. 236 of the NIRC) 10) Are taxpayers transferring business address within the year either within the same district or to another district required to pay another registration fee of P 500? No. 5) Are there instances where the taxpayers are required to register more than once? Yes.000 and below.000.000 (marginal income earner) (RR 112000) g) Individuals earning purely compensation income/overseas workers (Sec. the RDO shall check the box for VAT and cross-out all other boxes. government offices not engaged in proprietary activities c) Storage places/place of production/extension offices where no selling operations are conducted thereat (RMO 41-94) d) Taxpayers enjoying exemptions under R. Thereafter.000 for the immediately preceding 12-month period is exempt from paying the annual registration fee. not engaged in trade or business. and cross. 4) Are taxpayers required to register their business annually? No. since the annual registration fee is payable annually. 6810 (Kalakalan 20) e) Persons engaged in either VAT or Non-VAT taxable business. taxpayers are required to register only once before commencing their business. 11) After complying with all the requirements for registration.A. each storage place or each place of production being registered. For example.000 for the immediately preceding 12-month period (RR 11-2000) f) Persons who will be engaging in business for first time whose expected gross sales or receipts for any 12-month period will not exceed P 100. whose gross sales or receipts did not exceed P 100. they have no other option but to register as non-VAT taxpayer (RMC 3995). 17) What will the taxpayer do with the Certificate of Registration and the Proof of Payment of Annual Registration Fee? The original copy of Certificate of Registration and the duly validated BIR Form 0605 as proof of payment of Annual Registration Fee are required to be displayed in any conspicuous place in the head office. place of production or storage place where inventory of goods for sale or use in business are kept. storage and production places are liable to the annual registration fee only when sales operations are conducted thereat. they are no longer required to pay the registration fee to the new district office. they are required to pay the registration fee of P 500.000. he has the option to register as VAT taxpayer. 13) Who will issue the Certificate of Registration? The RDO having jurisdiction of the head office.00 annually. However. provided the P 500 was already paid.more than P 100. storage/ production place shall issue the Certificate of Registration. non-profit organizations and associations. . registered taxpayers are required to register again in the following instances: a) Establishment of new branch/storage place/place of production b) Engaging in different business activity (i. if the registration is for VAT only. storage places and places of production also required to pay the Annual Registration Fee of P 500? Each branch is required to pay the Annual Registration Fee of P 500. branch office. Note: Persons engaged in either VAT or Non-VAT taxable business. storage place or place of production. However.

operations are limited only areas in which the sole owner has expertise. Decisions can easily be made in as much as they are made by the owner himself. 2. 2. Business creditors can go after his personal assets to satisfy their claims. If his business succeeds. Net income is subject to tax regardless of whether it is withdrawn or not. Financial operations are not complicated in as much as this type of organization is generally for small scale business. For VAT taxpayer. -it is not complicated to establish. He can implement his decisions he knows will give benefits to his business. 19) Is there a particular form prescribed for Application for Cancellation of Registration? Yes. BIR Form 1905 (Application for Registration Information Update). 3. ADVANTAGES OF SOLE PROPRIETORSHIP 1. 5. -there are no conflicting/diverse ideas. and b) change in organization structure. The sole proprietor has the unlimited liability. Limited ability to expand. all profits belong to him. The owner is entitled to all profits his business realizes. Examples of Sole Proprietorship -Loven¶s Drug Store -Farmacia Navarro -Convinience Stores . -the owner has the opportunity to reap unlimited profits. 21) If a taxpayer is in doubt of his status as VAT taxpayer. It is easy to organize. 3. 4. The governmental requirements for sole proprietorship are minimal.18) What are the instances when a taxpayer can apply for cancellation of his registration? A taxpayer can apply for cancellation of his registration in the following instances: a) due to closure/cessation or termination of business. The owner has nobody to share with the burden of decision making and losses he might incur. 20) Where shall the Application for Registration Information Update be filed? It shall be filed with the RDO who issued the Certificate of Registration. DISADVANTAGES OF SOLE PROPRIETORSIP 1. The business depends only on the financial resources that can be procured by the sole owner. Limited ability to raise a capital. This is due to the limited capital and in most cases.Tamayo¶s Catering GROUP V Members Christine Joy Julian Sharmaine Sagabaen Mary-Ann Agcaoili Frances Paggao Jayson Bergantinos Lordmar Cabreros Amiel Jim De Vera Niño Gattu Jonathan Gaspar . he shall further notify the RDO where the Home Office is registered. 4. Business is entirely a responsibility of the owner. what is he supposed to do? Go to the RDO who has jurisdiction over his place of business and seek assistance.

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