All retail companies operate within a “macro environment,” or the sphere of influence outside the

company that shapes how companies do business. Laws, regulations and other government policies
can have a number of positive or negative effects on the retail industry. Government assistance,
such as government-backed loans and subsidies, can help fledgling retailers grow or allow an
established company to keep costs low for consumers. However, government policies can also
hinder businesses by imposing regulations that increase costs, such as requiring the development
and integration of new systems or procedures or establishing a minimum wage that small retailers
may not be able to afford. The retail industry also relies heavily on government-supported road and
transportation infrastructure to move goods and bring customers to retail locations.

The influence of political factors on business is enormous. The political factors may have international,
national as well as regional implications. The political system prevailing in a country decides, promotes
and controls the business activities of that country. A political system which is stable, honest and
efficient is a primary factor for the growth of business. If there is political instability it will have a telling
effect upon the business policies of a firm. Political factors may cause either opportunities or threats to a
business firm.

Before the business can go fully operational, it must secure the necessary licenses and certificate of
registration. The requirements vary for different structures of business.

 For single proprietorship, the business should apply for a business name and get registered with the
Department of Trade and Industry (DTI).
• For partnerships or corporations, a certificate of registration must be obtained from the Securities
and Exchange Commission (SEC).
• For cooperatives, the business must register with the Cooperative Development Authority (CDA).

Aside from the certificate of registration, the business would also need to comply with other
requirements and must apply for certifications/permits/licenses/identification numbers from other
government agencies and organizations.

• A homeowner's clearance is required if the business will operate within the village or subdivision.
• The business must secure a barangay clearance and acquire a community tax certificate (CTC).
• With complete requirements, it must secure a business license or mayor's permit at the local
government unit (municipality or city hall office).
• A business tax payer identification number (TIN) from the Bureau of Internal Revenue (BIR) must
be obtained along with an SSS number (for the business and employees). The business should also
register with Home Development Mutual Fund (HDMF), Philippine Health Insurance Corp.
(PhilHealth), and Department of Labor and Employment (DOLE).

In every country there are business and commerce laws that every business
owner and entrepreneur should be aware of. In the Philippines, there are also
laws and regulations that govern businesses from registration, operation, up to
termination. It is important that business owners and entrepreneurs know
what business laws are applicable to their type of business and activities.
These laws and rules should be followed to avoid punishments, charges and
penalties from the government or authorities that are implementing and
enforcing them. Some of these laws are not only created to obligate business
owners to do their duties but they are also made to obligate the government
to protect these business owners. To make sure you are doing business legally
and to know the decrees that give your business protection and privileges, the
following is a list business laws in the Philippines that entrepreneurs should be
aware of.
1. Tax Reform Act of 1997 (Republic Act No. 8424) –which amended
the National Internal Revenue Code (NIRC) is the law that governs the national
taxation in the Philippines and gives the Bureau of Internal Revenue (BIR) the
power and duty to assess and collect national internal revenue taxes in the
country.
The Local Government Code of the Philippines (Republic Act No. 7160) – is
the law governing local taxation in the Philippines, including the taxation on
real properties.
3. Labor Code of the Philippines (Presidential Decree No. 442) – is the law that
governs employment practices and labor relations in the Philippines.
4. Intellectual Property Code of the Philippines (R.A. 8293) – is the law that
governs the registration of patents, trademarks and copyright, and the
enforcement of intellectual property rights in the Philippines.
5. The Corporation Code of the Philippines (B.P. 68) – is the law that governs
the registration and regulation of corporations in the Philippines.
6. Civil Law of the Philippines (R.A. No. 386) – the civil code of the Philippines
includes the laws on obligations and contracts. It also governs special contracts
such as contract of agency and partnership.
7. Social Security Act of 1997 (R.A. No. 8282) – the law that mandates
employers to register their business and their employees with the Social
Security System (SSS).
8. National Health Insurance Act of 1995 (R.A. No. 7875) – the act that
mandates employers to register their business and their employees with the
Philippine Health Insurance Corporation or PhilHealth.
9. Home Development Mutual Fund Law of 2009 (R.A. No. 9679) – the act
that mandates employers to register their business and their employees with
the Pag-Ibig Fund (HDMF).
10. Food and Drug Administration (FDA) Act of 2009 (R.A. No. 9711) – the
law that governs the inspection, registration, licensing and monitoring of
establishments and health products.
11. The Philippine Fisheries Code (R.A. No. 8550) – the law that governs
commercial fishing in the Philippines.
12. The Animal Welfare Act of 1998 (R.A. No. 8485) – the act that governs the
supervision and regulation of the establishment and operation of all facilities
utilized for breeding, maintaining, keeping, treating, or training of all animals in
the Philippines.
13. Securities Regulation Code of the Philippines (R.A. No. 8799) – the law
that governs the registration and regulation of securities, pre-need plans, and
securities market professionals –  and the protection of shareholder interests
in the Philippines,
14. Financing Company Act of 1998 (R.A. No. 8556) – the Act that governs
the registration and regulation of financial companies in the Philippines.
15. Truth in Lending Act (R.A. No. 3765) – An Act to Require the Disclosure of
Finance Charges in Connection with Extensions of Credit
16. Consumer Act of the Philippines (Republic Act No. 7394) – The law that
protects the interest of the consumers in the Philippines, promote their general
welfare, and establish standards of conduct for business and industry.
17. Electronic Commerce Act of 2000 (R.A. 8792)  – an act providing for the
recognition and use of electronic commercial and non- commercial
transactions, penalties for the unlawful use thereof, and for other purposes.
18. The Magna Carta for Micro, Small and Medium Enterprises (MSMEs), as
amended (RA 9501) – an Act to promote entrepreneurship in the Philippines
by strengthening development and assistance programs to Micro, Small and
Medium Scale Enterprises in the country.
19. Barangay Micro Business Enterprises (BMBEs) Act of 2002 (R.A. No. 9178)
– a law that promotes the establishment of Barangay Micro Business
Enterprises (BMBEs) in the Philippines, and provides incentives and benefits
such as income tax exemption and access to financial, infrastructural,
marketing, and knowledge support from the government.
20. Insurance Act of the Philippines, as amended – the law that governs the
insurance business and insurance transactions in the Philippines.
21. Foreign Investments Act of 1991 (R.A. No. 7042) – the law that governs
foreign investments in the Philippines.
 22. Anti-Violence Against Women and Children Act of 2004 (R.A. 9262) – a
law that protects women and children in the workplace.
23. Philippine Cooperative Code of 2008 (R.A. 9520) – the law governing the
registration, regulation and promotion of cooperatives in the Philippines.
24. Anti-Money Laundering Act of 2001 (RA 9160) – An Act that aims to
protect and preserve the integrity and confidentiality of bank accounts and to
ensure that the Philippines shall not be used as a money laundering site for the
proceeds of any unlawful activity
25. The Anti-Red Tape Act of 2007 (RA 9485) – an act enacted to improve
efficiency in the delivery of government services to the public by reducing
bureaucratic red tape, preventing graft and corruption in all the offices of the
government.
There are still other laws in the Philippines that are applicable to your specific
business or industry which I’ve missed to include above. Furthermore, there
may be subsequent laws that the Philippine government might enact in the
future to partly or fully amend the laws listed above. There will also be new
laws that might be applicable to your business in the future and may affect its
operation. Hence, always be updated with the business related laws in the
Philippines. Remember that these laws are not only created to give you duties
and responsibilities, but they are also created to mandate the government or
the state to protect and promote you and your business.

Steps On How To Register A Sole Proprietor Business

1. Register your business name at the Department of Trade and Industry (DTI)

Make sure to search the DTI website to see if there are any businesses in existence
that have a name similar to yours. If the business name that you want is available, fill
out a business name application form, and submit it to DTI’s office. You must wait for
your DTI certificate of registration before you move onto the next step of opening your
own sole proprietor business.

2. Register with Barangay

Once you have received your certificate of registration from the DTI, it’s time to go to the
Barangay where your business is located to fill out an application. In addition to your
application, you will need to submit your DTI Certificate of Business Registration, two
valid IDs, and a proof of residence. Wait and claim your Barangay Certificate of
Business Registration.
3. Register your sole proprietor business with the Mayor’s Office (LGU)

The next step, after receiving your Barangay certificate of business registration, is
registering your business at the municipal office in the city where your business is
located. You will need to fill out an application, as well as submit your Certificate of
Business Registration from the DTI, your Barangay Clearance Certificate, two valid
forms of ID, and proof of residency.

4. Register With The Bureau of Internal Revenue (BIR)

After you receive your certificates and permits from DTI and LGU, it’s time to register
your sole proprietor business with the BIR. To do this, you will need to visit your regional
district office in the city where your business is located. You will be required to fill out a
BIR form 1901, which is an application to register your sole proprietorship. In addition to
your completed BIR form 1901, you will need to submit your Certificate of Registration
from DTI, your Barangay Clearance Certificate, your Mayor’s Business Permit, proof of
residency, and valid ID. You will also have to pay for registration, (BIR Form 0605), and
register your book of accounts and provide any receipts or invoices you have for the
business. After all of this has been completed, you will be able to claim your certificate
of registration, (BIR form 2303).

In starting a business, an entrepreneur should consider the external factors that can affect the
operation of the business. The sphere of influence is called the macro environment that
includes the political and legal factors. The government has a huge part in a business for it has
the power to implement laws, regulations, and policies. These policies help the government in
regulating the operations of the businesses in the country. These policies can have a positive
effect in the business such as government-backed loans and subsidies that enable the
businesses to grow. However, it can also hinder some business activities by imposing
regulations that require high cost.

Before the business can go fully operational, it must secure the necessary licenses and
certificate of registration. The requirements vary for different structures of business.

 For single proprietorship, the business should apply for a business name and get registered
with the Department of Trade and Industry (DTI).
• For partnerships or corporations, a certificate of registration must be obtained from the
Securities and Exchange Commission (SEC).
• For cooperatives, the business must register with the Cooperative Development Authority
(CDA).
Aside from the certificate of registration, the business would also need to comply with other
requirements and must apply for certifications/permits/licenses/identification numbers from
other government agencies and organizations.

• A homeowner's clearance is required if the business will operate within the village or
subdivision.
• The business must secure a barangay clearance and acquire a community tax certificate (CTC).
• With complete requirements, it must secure a business license or mayor's permit at the local
government unit (municipality or city hall office).
• A business tax payer identification number (TIN) from the Bureau of Internal Revenue (BIR)
must be obtained along with an SSS number (for the business and employees). The business
should also register with Home Development Mutual Fund (HDMF), Philippine Health Insurance
Corp. (PhilHealth), and Department of Labor and Employment (DOLE).