Doing Business in the Philippines 

Many business giants that make the products or services you’re consuming
today started small. Apple and Google started in a garage. Jollibee was
once a humble ice cream parlor before it became a food titan that acquired
known brands like The Coffee Bean and Tea Leaf, Mang Inasal, and
Burger King. Potato Corner, on the other hand, used to be a food cart
business before it turned into an international franchise brand. 
Their stories are surely inspiring, but before they reached the glorious
success they’re enjoying right now, the founders took the time to plan
everything, observe trends, and take risks. They proved that there are
definitely no shortcuts to great feats.  
Here are some golden rules on how to start a small business in the
Philippines. 
How to Start a Small Business in the Philippines: 18 Tips for Aspiring
Entrepreneurs 
1. Create a New Market or Benchmark 
Be innovative! You have two choices on what business you want to venture
in. 
First, offer something that is not yet in the market. How can you make your
business stand out? Think creatively and identify an innovative product or
service that can satisfy the needs or provide a solution for your target
customers. 
Second, benchmark successful businesses. Observe what they’re doing
right and create something greater. 
2. Validate Your Small Business Idea 
You may have something in mind that you believe will be a big hit. But does
your small business idea really have the potential to succeed? 
Conduct market research before you start a small business. Find out if the
product or service you’re considering to sell is something people need and
would be willing to pay for. Check also if other businesses in your area are
offering the same product or service and how the competition is like. 
3. Plan Your Business Finances 
When figuring out how to start a small capital business in the Philippines,
know that while it doesn’t generally require a lot of funds, it will involve
some capital. You need money to buy equipment, tools, supplies, and
materials, as well as to cover ongoing costs for six to 12 months before you
make a profit. 
Start with listing down all the required expenses for starting your business.
Group them into two categories: 
One-time startup costs: Market research, branding, licenses and permits,
initial inventory, grand opening event, etc. 
Ongoing costs: Rent, marketing, employee salaries, taxes, etc. 
It’s also important to have backup funds. When you start a business, you
have to allocate backup funds (aside from your initial capital) that will
sustain your business. It will take time for your product to be known. When
you’re starting out, it’s normal to suffer some loss. If you don’t have backup
funds, how will you sustain your business? 
4. Decide on the Structure of Your Business 
There are many reasons you need to decide on the structure of your
business early on. Primarily, it will influence the way your business will
operate. It will determine the kind of risks that your personal assets will
face. More importantly, it will give you an idea of what kind of legal
protection you need. 
Small businesses may consider these two types of ownership: 
Sole proprietorship – In this type of ownership, everything is under your
full control. While the assets are all yours, all losses incurred will be yours,
too. 
Partnership – It happens when you decide to start a business with other
individuals. Depending on the agreement among partners or the amount of
contribution for the capital, the liability of each member will be either limited
or unlimited. 
5. Choose the Right Location 
When you buy a house, you need to keep this factor in mind: location,
location, location. The same principle applies to starting a small business in
the Philippines. For you to get customers, you need to rent a place with
high foot traffic. It could be that one tiny kiosk at the mall, a shop
downtown, or that spot near the highway. 
However, remember that these locations can get very expensive. If you
consider this, make sure that you have a sizable budget. Don’t forget that
the money that you will spend on this will also depend on the floor area of
the shop and its amenities. 
6. Consult a Business Lawyer and a Tax Specialist 
Starting a small business may mean dealing with some legal aspects. This
is why you need to consult a business attorney as much as possible. For
one, a business lawyer will help make sure that the agreements with your
partners and vendors don’t have any loophole and will have clauses that
protect your interests. 
In some cases, they also give advice on choosing the right type of business
ownership or structure. They can even help you review your leasing
agreement with office and retail spaces. More importantly, a business
lawyer can help you protect your intellectual property. 
When it comes to finances, a certified public accountant (CPA) will make
sure that you stay current with the laws regarding business taxation. They
will teach you the basics of computing and filing your business taxes,
maximizing tax deductions, and improving the way you archive your tax-
related documents 
7. Choose the Best Name for Your Small Business 
Your business branding starts with a name. When you’re pondering on how
to start a small business in the Philippines, make sure to pick a name that
not only describes what you have to offer but also will have an easy recall
among consumers. 
 
Once you’ve come up with at least three potential names for your business,
verify if it’s trademarked or another business is already using it. If there’s
none, register your business name with the Department of Trade and
Industry (DTI) if you’re a sole proprietor. 
 
8. Create Your Brand Identity 
Familiarity builds affinity. So, aside from a catchy business name, you have
to make sure that your brand’s identity resonates with your target
audience.  
Nevertheless, here are the elements that will help you forge your brand
identity. 
Logo – It’s the face of your business, so it must be easily recognizable. It
can be a logotype (e.g. Coca-Cola, CNN, Disney, and Google) or
a logomark (e.g. Apple’s bitten apple icon, Nike’s swoosh, or Starbucks’
two-tailed mermaid). 
Language – Your choice of words is a giveaway of your brand’s
personality, mood, and tone. Going full English may mean that your brand
has aspirational or premium values. Taglish, on the other hand, may mean
that your business has a relaxed tone. Most of the time, pure Tagalog and
a few colloquialisms may show that your brand is grounded and in touch
with the common people. 
Colors – Customers are heavily dependent on visuals. Colors are good
visual aids, as they convey feelings and emotions and strengthen brand
associations. 
Once you have decided on the elements of your brand identity, create a
brand bible that your graphic designers will follow when creating your
promotional materials. A brand bible ensures that your branding elements
look consistent across different materials. 
9. Apply for Licenses and Permits 
In the Philippines, small capital business owners still need to acquire
documents to prove that they’re running a legitimate enterprise. This is one
rule you shouldn’t ignore before starting your business, lest you’ll get into
trouble with the law later on. 
After your DTI business registration, you need to get the permits. Here are
the permits needed to start a business in the Philippines. This should be
accomplished from the local government where you plan to build your
business: 
Barangay clearance issued by the barangay hall 
Mayor’s permit/Business permit issued by the municipal or city hall 
Tax Identification Number and BIR registration documents 
Special permits depending on the nature of your business, such as
registration with the Food and Drug Administration for food businesses and
with the Bangko Sentral ng Pilipinas for pawnshops, remittance centers,
and other financial institutions. 
10. Pick the Right People 
You need a pool of talented, hardworking, and trustworthy people driven to
grow your business. They are your greatest asset, so you have to also take
care and grow them. With the right people, you can serve your customers
better. 
Identify the positions to fill and the core skills, competencies, and
responsibilities for each. These will guide you through screening applicants
and hiring the right ones. 
If you’ll run your small business alone without any employee or contractor,
you still need people you can run to for support. These could include your
family and friends, a trusted mentor, or a fellow entrepreneur who can
provide you with advice and motivation during the highs and lows of
managing your startup. 
11. Invest Time in Creating Your Prototype 
The heart of the business is your product or service, so you have to make
sure that what you’ll offer is nothing but the best. This is why you need to
create prototypes until you create the perfect item. If you’re an owner of a
restaurant, this means trying out different recipes and experimenting with
various ingredients to create a unique dish. In case you’re a shoemaker, it
means coming up with various footwear designs that embody both form
and function. 
When you create a prototype, you’re also figuring out which aspects of the
product need improvement. You have to see to it that the product or service
is flawless before it gets mass-produced or launched. If you skip this, you’ll
lose money due to product recalls and customer complaints. 
12. Choose the Right Suppliers and Partners 
Your products or services are made up of different components or
processes, a lot of which are usually being sourced from third-party
suppliers. With that, always select the vendor or partner that understands
the nature of your business. The right supplier will help you make sure that
you will be able to deliver your products on time and minimize production
costs. 
13. Take Advantage of Social Media and Free Website  
You can cut down on your marketing costs by tapping social networks and
free website builders to promote your small business. This rule is especially
important if you’ll start an online business. You have to be where your
target clients are. So if they’re frequently on a particular social networking
site, you have to build your presence there. 
14. Be Resilient 
As a beginning entrepreneur trying to propel your business forward, expect
several bumps along the way. There will always be setbacks to deal with.
But these should not discourage you. 
Instead, have the resilience needed to get back on your feet after any
challenge that comes your way. The COVID-19 is a tangible example of
this. The pandemic may have devastated most businesses both big and
small, but it doesn’t mean no one should try and start a business
anymore.  
The ability to survive any type of setbacks is what separate great
businesses from the others. Start a business that will surely stand the test
of time, fate, and nature itself. 
15. Have a Contingency Plan 
Sometimes, you can only afford resiliency when you’re prepared for the
rainy days and unexpected problems. Having a contingency plan will
help ensure that your business will endure any unanticipated events in the
future. Include the following items in your plan: 
Insurance – This is to compensate for any losses or cover expenses in
case of disasters, customer complaints, among others 
Data back-up – Data is an integral part of your operation. So make sure
that everything, from customer details to financial records and even social
media analytics reports, is being backed up from time to time (via cloud or
a separate hard drive). Data loss makes business continuity more than
challenging. 
Back-up source of income – The pandemic has taught businesses to
have an alternative source of income on standby in case worse comes to
worst. 
 
16. Be Data-Driven When Making Decisions 
What’s great about starting a business in the 21st century is the availability
of various types of data that will help you with decision-making. You can
make precise predictions on customer behavior and trends, which
ultimately shape your operations. Data also helps streamline your business
processes, which in turn allow you to reduce wastage on resources, such
as money and time. 
17. Learn to Delegate 
You don’t want to do all the tasks by yourself. That would be a wasting your
precious time! 
Multiply yourself by teaching other people some of your skills that they
should master. It means more time from you doing more important things
for the business. 
For example, you can teach someone accounting processes, so you can
focus on generating sales. Make sure you only teach your skills to people
you trust. 
18. Be Ready to Make Sacrifices 
Since you need to give a big chunk of your time to grow your business,
you’re going to miss zoom nights with friends, bonding time with
family, regular sleep and a possibility of losing your life savings. This also
goes with balancing your needs and wants so that you can follow through
with your financial goals. 
Final Thoughts 
A lot of Filipinos nowadays want to start a small capital business of their
own. However, many disregard the importance of the science of business.
Instead, we rely solely on intuition. Before you tackle the problem of how to
start a small business in the Philippines, you need to carefully study and
forecast a lot of factors to ensure that your business will succeed. 
 
Types and Forms of Business 
 
Introduction 
A business entity is an organization that uses economic resources to
provide goods or services to customers in exchange for money or other
goods and services. Business organizations come in different types and in
different forms of ownership 
 
In a nutshell  
Main types of businesses: 
• Service - intangible products 
• Merchandising - buy and sell goods 
• Manufacturing - transforms raw materials into a new product 
Basic forms of business organizations: 
• Sole proprietorship - owned and controlled by only one person 
• Partnership - owned by partners who agree to undertake business 
• Corporation - a legal entity owned by shareholders 
Other forms that also exist are: LLCs and cooperatives. 
 
3 Types of Business 
There are three major types of businesses as to product are: 
 
1. Service Business 
A service type of business provides intangible products (products with no physical
form). Service type firms offer professional skills, expertise, advice, and other
similar products. 
Examples of service businesses are: 
 Business services, such as accounting, advisory, taxation,
advertising, engineering, legal, research agencies, computer
programming, etc. 
 Personal services, such as laundry, beauty salon, photography 
 Automotive repairs, car rental, car wash, parking spaces 
 Fitness facilities, amusement parks, bowling centers, golf courses,
theatres 
 Hospitals and clinics, schools, museums, banks 
 Hotel and lodging, and more. 
 
2. Merchandising Business 
This type of business buys products at wholesale price and sells the same
at retail price. They are known as "buy and sell" businesses. They make
profit by selling the products at prices higher than their purchase costs. 
A merchandising business buys a product and sells it without changing its
form. 
 
 Examples include all distribution and retail stores such as: department
store, grocery, hardware, clothes and accessories shop, consumer
electronics, home furniture, appliance stores, drug stores, etc. 
 
3. Manufacturing Business 
Unlike a merchandising business, a manufacturing business buys products
with the intention of using them as raw materials to make a new product.
Thus, there is transformation of the products purchased. 
A manufacturing business combines raw materials, labor, and overhead costs in
its production process. The goods produced will then be sold to customers.
Examples include: 
 Food processing, such as producing canned meat, frozen goods,
dairy products, bottled drinks, also bakeries and oil mills 
 Fabric mills and textile production from cotton, wool, polyester; and
also clothing factories that use textile as raw material 
 Wood and metal works, such as in building cabinets, tables, chairs 
 Oil refineries, chemical labs, plastic and rubber production 
 Ship builders, aircraft manufacturers, car makers 
 and many other producers and factories 
 
More than 1 classification 
Many companies engage in more than one type of business. They run
different departments or divisions for different purposes. 
Take for example a tech company that produces phones (manufacturing),
sells them through their distribution centers (merchandising), and provides
repairs and maintenance (service). A restaurant combines ingredients in
making a meal (manufacturing), sells a cold bottle of beer (merchandising),
and provides a dining venue (service). 
Forms of Business Organization 
These are the basic forms of business ownership: 
1. Sole Proprietorship 
A sole proprietorship is a business owned by only one person. It is easy to
set-up and is the least costly among all forms of ownership. The owner
faces unlimited liability; meaning, the creditors of the business may go after
the personal assets of the owner if the business cannot pay them. The sole
proprietorship form is usually adopted by small business entities. 
Advantages of sole proprietorship: 
 easy to set up 
 owner has full control over business decisions 
Disadvantages of sole proprietorship: 
  no independent legal status, owner is liable for the liabilities of the
business 
 limited source of funds 
 
2. Partnership 
A partnership is owned by two or more persons who contribute capital to
conduct business. The partners divide the profits of the business among
themselves based on agreed terms. 
In general partnerships, all partners are have unlimited liability. In limited
partnership (or Limited Liability Partnership, LLC), at least one partner is a
limited partner. The creditors cannot go after personal assets of limited
partners. 
Advantages of partnership: 
 more source of capital, resources, knowledge and skills from more
people versus in a sole proprietorship 
 easier to set up, manage, and control compared to a corporation 
Disadvantages of partnership: 
 no independent legal status, and general partners can be liable for
the liabilities of the business 
 possibility of disagreements between partners 
 limited source of capital and restrained growth potential compared to
a corporation 
 
3. Corporation 
A corporation is a business organization that has a separate legal
personality from its owners. Ownership in a stock corporation is
represented by shares of stock. 
The owners (stockholders) enjoy limited liability but have limited
involvement in the company's operations. The board of directors elected
from the stockholders, controls the activities and direction of the
corporation. 
Advantages of corporation: 
 prestige from passing more formal requirements 
 shareholders' enjoy limited liability since the company is an
independent legal entity separate from its owners 
 extensive sources of capital though issuance of stocks and bonds,
and with it an amplified growth potential 
 ownership can be easily transferred through stocks, hence allowing
corporations unlimited life, compared to partnership that gets dissolved
 when any of the partners decides to leave, dies, or becomes incapable
to fulfill role 
 
Disadvantages of corporation: 
 more difficult to set-up and manage due to greater requirements and
heavier government scrutiny 
 stockholders have limited involvement in business operations and
decisions 
 double taxation, taxes are charged on the company's net income and
stockholders are also taxed on dividends received from the company 
 
Other Forms of Businesses 
In addition to these basic forms of business ownership, these are some
other types of organizations that are common today: 
 
Cooperative 
A cooperative is a business organization owned by a group of individuals
and is operated for their mutual benefit. The persons making up the group
are called members. Cooperatives may be incorporated or unincorporated.
Some examples of cooperatives are: utility cooperatives (water and
electricity), cooperative banking, credit unions, and housing cooperatives. 
 
Limited Liability Company (LLC) 
Limited liability companies (LLCs) are hybrid forms of business that have
characteristics of both a corporation and a partnership or sole
proprietorship. An LLC is easier to establish. It is not incorporated; hence, it
is not considered a corporation. However, the owner/s enjoy limited liability
like in a corporation. 
An LLC may choose to be taxed like a sole proprietorship or partnership
(flow-through taxation, where the company is not taxed and income is only
taxed in the owners' tax returns) or like a corporation. By default, an LLC is
taxed through flow-through taxation. 
 
Sources: 
 https://www.accountingverse.com/accounting-basics/types-of-
businesses.html 
 
https://www.moneymax.ph/personal-finance/articles/starting-small-business 
 
BUSINESS REGISTRATION PROCESS 
 The Philippines a flourishing country and is one of the fastest growing
economies in Asia. The country is moving forward with a highly educated
population and a large deposit of natural resources. It belongs to the top ten
producers of copper, chromite, and gold in the world. The friendly business
environment is attracting foreign investors to establish the Philippines as one
of the prominent business centers in Asia. Thus, a plan of starting a business
in the Philippines is fruitful and advantageous for any entrepreneur in the
world. The country does not only provide you with the incentives and offers,
but also a fertile infrastructure and friendly business milieu. 
 
ADVANTAGES OF STARTING A BUSINESS IN THE PHILIPPINES 
 The manpower in the Philippines is skilled and inexpensive 
 The Philippines is in the heart of Asia. It is also connected to the four
major capitals of the region which connects a million people from Asian
countries 
 There is availability of Special Economic Zones, subject to only 5%
overall tax rate 
 The country has an open and friendly economy which allows 100%
ownership in most of the sectors 
 The Philippines provides well-developed communication,
transportation, economic and business infrastructure 
 A company in the Philippines has access to the wide ASEAN market and
its vast trade opportunities 
 
 
TYPES OF CORPORATE ENTITIES IN THE PHILIPPINES 
There are many types of business entities in the Philippines. They are
explained as under: 
 
1. Sole Proprietorship 
A sole proprietor in the Philippines is someone who is personally responsible
for any liabilities incurred in the business. However, they also get full
benefit of any profit incurred by the company. In effect, the business and
personal interests are considered as one single entity. 
 
2. Partnership 
This type of business entity is a separate legal entity. One can choose a
structure with limited or unlimited liabilities. For having a larger partnership
in the Philippines, you must register your interests with Securities and
Exchange Commission. 
 
3. Corporation 
A corporation in the Philippines must have at least five shareholders who
stake a minimum amount of capital. However, the liability of shareholders is
then capped at the total amount of their invested capital. The investor has
to register his corporation to the Securities and Exchange Commission. 
 
4. Branch Office 
A branch in the Philippines can be called as an extension of a foreign company
carrying the same activities as the parent company. Here, the only difference
is, the business is carried out in a different country following the rules and
regulations of that country. 
 
5. Representative Office 
A representative office in the Philippines can be only set up to promote their
parent company. They can do market research, study the customers etc. but
they cannot conduct buying and selling activities in the country. 
 
HOW TO START A BUSINESS IN THE PHILIPPINES? 
The Philippines is no more just a place for leisure; starting a business in the
Philippines for foreigners has become simpler over the years. The government
is offering incentives and supporting a Build-Operate-Transfer (BOT)
investment scheme to attract businessmen to invest and start their business
in the country. The Philippine government has simplified the incorporation
process for all kinds of businesses to encourage investors and entrepreneurs.
Here is the simple procedure for starting a business in the Philippines: 
 
1.Choose a Business Structure 
The first step while setting up your small business in the Philippines is
choosing a corporate structure from the list mentioned above. Depending on
the size and resources of your business, you’ll need to decide whether to set
up as a sole-proprietorship, partnership, or corporation. 
 
2.Register a Business Name 
The next step in starting a business in the Philippines is to get registered
the proposed business name with the following departments, according to the
type of business: 
 
Sole proprietorship – The Department of Trade and Industry (DTI) 
Corporation/Partnership – Securities and Exchange Commission 
Cooperative – Cooperative Development Authority 
The total fee for name registration varies between PHP 40- PHP 120 
 
3.Pay the Minimum Deposit 
Business owners who want to register their company in the Philippines need
to deposit a minimum amount of capital in the bank account. The Philippines’
Corporation Code sets that minimum at PHP 5,000 but your bank will need
additional materials, including articles of incorporation and identification
documents. 
 
4.Register with the Securities and Exchange Commission (SEC) 
This is the most important step under the complete process. SEC that is the
Securities and Exchange Commission of the Philippines, a national
government regulatory agency, oversees every registered business entity in
the Philippines. Applicant businesses must provide the SEC with a number
of materials and documents, including: 
 Approved company name 
 Articles of incorporation 
 Treasurer’s affidavit, 
 Statement of assets and liabilities 
 Company particulars including information on directors, officers, and
stockholders 
5.Notarize the documents 
Before completing the step 4, remember that, according to the section 14 and
15 of the Corporation Code, proper notarization of all the documents as well
as the Treasurer’s Affidavit is necessary before proceeding to file with the SEC.
This may cost PHP 500 and would only take 1 day to accomplish. 
 
6.Obtain the Tax Identification Number (TIN) 
Now that you have registered your company with the SEC, you must now
complete the following process: 
 
 Company name verification slip 
 Articles of incorporation (notarized) and by-laws 
 Treasurer’s affidavit (notarized) 
 Statement of assets and liabilities 
  Registration data sheet with particulars on directors, officers,
stockholders, and so forth 
 Written undertaking to comply with SEC reporting requirements
(notarized) 
 Written undertaking to change corporate name (notarized). 
 Once you complete all these steps, SEC will automate your TIN. This step
takes an average of 2 days to complete. 
 
7.Register with BIR 
Register the company with the Bureau of Internal Revenue (BIR) District
office for authority to print invoice and book of journal. This task is crucial in
determining applicable taxes, paying your annual registration fee, and
acquiring and stamping of sales invoices, receipts, and books of accounts. 
BIR Business Registration Requirements 
1) Certification 
 DTI Certification (Single Proprietor) 
 Articles of Partnership SEC (Partnership) 
 Certificate of Incorporation SEC (Corporation) 
 Tax Identification Number TIN (Professional/Consultant) 
2) Contract of Lease or Land Title 
 Contract of Lease – if you rent the place 
 Land Title / Tax Declaration – if you own the place 
3) Mayor’s Permit 
 Barangay Clearance 
 
If you have completed all these BIR requirements, you are now ready to
proceed with the registration with the BIR. Here are the 10 steps for
registering your business with the BIR 
 
 10 EASY STEPS FOR REGISTERING WITH THE BIR 
1. Prepare/accomplish in 3 copies the following BIR forms needed for your
business. They are available at all BIR offices or download these forms online. 
2. Go to the Revenue District Office (RDO) that has jurisdiction over your
registered address. You can also visit this link to know which RDO has
jurisdiction over you. 
3. Go to the officer of the day. He will assess how much to pay for the
registration. Normally, the registration fee is P500.00 while the Documentary
Stamp Tax on Subscription depends on how much your capital is, while the
Documentary Stamp Tax on Lease depends on your monthly rental. Please
submit these forms and documents to the officer of the day. 
 
4. After the assessment, go to the accredited banks for payment. Usually,
accredited banks are within the vicinity of the RDO, or you can ask anyone
from the BIR in that RDO to be sure. Submit these assessed forms to the teller
of the bank. 
5. After the payment has been made, go back to your RDO. Get a queue
number from the guard. Go to the registration section for the receiving of your
application. Wait for your turn to be called and submit a photocopy of BIR
form payments, special BIR payment form (all Accredited Banks of RDO have a
special payment form for BIR only) and other documentary requirements. The
following are: 
 
6. Schedule for release. Some RDOs may request you to attend a seminar
about the filing of your taxes before the actual release of Certificate of
Registration but some do not; be prepared just in case.  Also, don’t forget to
ask for an “Ask for Receipt” sign. Some RDOs will automatically give it to you
together with the COR and some do not. So, to be sure, just ask for it. 
 
7. Purchase Books of Accounts. Normally for VAT (Value Added Tax), there are
six (6) Books of Accounts while there are four (4) Books of Accounts for NON-
VAT, and these are:  
 
8. Register the Books of Accounts 
 Accomplished BIR Form 1905 
 Books of Accounts 
 Submit BIR Form 1905 and Books of Accounts to the Registration
Section and wait for the release. 
9. Apply for Authority to Print (ATP) 
 Accomplished BIR Form 1906 
 Photocopy of COR and paid Registration BIR 0605 
10. Lastly, printing of your receipts (Official Receipts and/or Invoices). This
normally takes one to two weeks to be printed. 
You are now ready to do business. Good luck and don’t forget to file your tax
returns and to pay your taxes on time. 
 
 
8.Get a Barangay Clearance 
You need to visit the Barangay Hall where your business is located and bring
in the documents including your application form, SEC Certificate of
Incorporation, approved AOA, lease contract, and business plan. The fee for
Barangay Clearance ranges between PHP 300- PHP 1,000. 
 
9.Pay the Annual Community Tax 
The annual basic and additional community tax can be paid at the City
Treasurer’s Office (CTO). The basic tax would depend on your business
activity. It must not be higher than PHP 500. The additional tax on the other
hand is subject to the assessed value of the real property you own, along with
dividends and earnings. 
 
10.Obtain the Business Permit 
You can obtain a business permit in the Philippines from the Business Permits
and Licensing Office (BPLO). Apart from this, there are a few companies who
need to secure other clearances or certificates such as a location clearance,
fire safety and inspection certificate, mechanical permit, certificate of
electrical inspection, and sanitary permit. 
 
11. Register with the Social Security System (SSS) 
Businesses with any number of employees must register to the Philippines
Social Security System. The following documents are required: 
 
 Employer registration form (Form R-1) 
 Employment report (Form R-1A) 
 List of employees, specifying their birth dates, positions, monthly salary
and date of employment; and 
 Articles of incorporation, by-laws and SEC registration. 
12.Other Clearances 
It is mandatory to register your business with the following offices to be in
line with the government regulations: 
 
Department of Labor and Employment (DOLE) – For occupational safety and
Health standards 
PhilHealth – For availing Medicare benefits 
PAG-IBIG fund – Mandatory for employees covered by the Social Security
System (SSS) 
Department of Environment and Natural Resources (DENR) – For availing
an Environmental Compliance Certificate 
Requirements for Doing Business in the Philippines 
   
For Sole For Corporate  
Proprietor Registration 
Registration 
 A copy of  Verification slip
government form 
issued ID   Articles of
 A duplicate incorporation 
proposed business  Notarized bank
name registration certificate 
form   Treasurer’s
 Payment of affidavit 
registration fees  Written
fixed on territorial undertaking to change
based with the name of the corporate
documentary by trustee or Director 
stamp tax   Clearance certificate
 Complete from other government
employee data agencies 
form   Foreign investment
 Copy of application form (for
Municipality foreign corporation
permission letter  subsidiaries 
 Community  List of members and
tax certificate  contributed amount
 Location and certified by the secretary 
Barangay  Registration fee 
clearance   Complete employee
 Fire safety data form 
and electrical  Copy of
inspection Municipality permission
certificate  letter 
 Occupancy  Community tax
certificate and certificate 
building permit   Location and
 Contract of Barangay clearance 
lease, if an   Fire safety and
electrical inspection
certificate 
 Occupancy
certificate and building
permit 
 Contract of lease, if
any 
  
 
So, if you are planning to start a business in the Philippines, go for it! The
business-friendly Philippine government provides opportunities for
entrepreneurs to start a small business and reap all the advantage. Business
Setup Worldwide is a management consultancy which helps to establish your
business in the international market. We help our clients in understanding the
procedures to start a business in the Philippines. Our experts can assist you in
the incorporation process, taxation, legal procedures, accounting, and
financial management 
References: 
https://www.full-suite.com/blog/10-easy-steps-to-registering-your-
business-with-the-bir/ 
https://www.businesssetup.com/blog/how-start-business-philippines 
 
 
 
 
Jonnah Rose C. Corpuz 
BSA 3C 
IMPORTANCE OF REGISTERING A PROPERTY 
 Registering a property should be the top priority when you buy a house,
commercial shop, or land as it proves your legitimacy to carry out any
transaction. 
 You are considered as the legal owner of a property after it is registered in
your name. 
 If you failed to register the property that you buy, the previous owner
would still the legitimate owner of that property. 
 The basic purpose of registering a property is to record the ownership of
the flat. 
 
 3 MAIN PURPOSE OF PROPERTY REGISTRATION 
1. To protect property rights, 
 You have the legal right to protect your property by clear law that are fully
enforced by the state. 
2. To facilitate transactions, and 
 Have the right to Facilitate transaction just like Land Conveyance in sale,
Donations or Assignment. 
 3. To enable land to be use as a loan collateral. 
 You can use your property/land as a collateral to the lender who is willing
to accept it for you to borrow money, but make sure that your land is valuable
enough for the amount you wish to borrow. 
 
 LAND TITLE AS A PROOF OF OWNERSHIP 
 The land title once registered under the Torrens system in the Registry of
Deeds, is evidence of an indefeasible and Incontrovertible proof of land
ownership to the person whose name the property is registered. 
 
 ROLE OF REGISTER OF DEED AS MINISTERIAL 
 Registration is merely a ministerial act by which a deed, contract, or
instrument is sought to be inscribed in the records of the office of the Register
of Deeds and annotated at the back of the certificate of title covering the land
subject of the deed, contract, or instrument. 
 According to Section 10 of PD failNo. 1529, “It shall be the duty of the
Registry of Deeds to immediately register an instrument presented for
registration dealing with real and personal property which complies with all
the requisites for registration.” 
 The Register of Deeds can’t decline the presented deed of sale for
registration even if the document is valid or not, they will not be the one who
decide if they will register it or not because the function is properly belong to
the court of competent jurisdiction.  
 If the Register purpose it to give merely notice, then the validity of the
instrument will be decided After the Registration. 
 
 
Steps On How To Register A Property In The Philippines 
 
Every tract of land or property acquired should be registered with the land registry office.
Otherwise, problems with land ownership and penalties might occur. A person who lawfully
owns a real estate property is the ‘better’ owner than the one who abandons and neglects the
land. To simply put, someone can take land or property that has already belonged to others when
a piece of territory is not registered publicly. Find out the following steps on how to register a
newly-bought property in the Philippines. 
The first step is to prepare the Deed of Sale. The deed of sale is the legal evidence of the
purchase of the land or property. A buyer should also secure some of the seller’s pertinent
documents such as recent CTC, a copy of TIN and valid IDs. 
Second, go to City’s Assessor’s Office because they will assess and prepare real properties for
taxation purposes. The requirements needed are CTC of tax declaration and certificate of no
improvement for vacant lot only 
Then, the next step is to Land Tax Division of City Treasurer’s Office. Their function is
to collect real property tax. To obtain tax clearance, the seller must be able to pay all arrears on
property tax not only in the present year but also in the previous years. 
Next, proceed to the Bureau of Internal Revenue. Its function is to actively collect revenue
taxes.  
Requirements: 
 Tax Identification number (seller and buyer) 
 Notarized deed of absolute sale 
 CTC of the most recent tax declaration 
 certificate of title (original and photocopy) 
 certificate of ‘with improvement’ 
What to Receive: 
 Certificate authorizing registration 
 original copy of the deed of absolute sale (with BIR stamp) 
 original copies of BIR return forms (with stamp) 
The next step is to the Municipal Treasurer’s Office, it manages revenues and cash flows;
were transfer tax is paid. Take not that transfer tax should be paid no later than 60 days from the
time the Deed of Absolute Sale was executed. 
Requirements: 
 Certificate Authorizing Registration (from the BIR) 
 Tax clearance certificate 
 BIR’s official receipt with the documentary stamp tax 
 Deed of sale (photocopy) 
 Transfer Certificate of Title (photocopy) 
 Tax declaration (photocopy) 
The next step is the Registry of Deeds, it processes, finalizes and maintains the public
registration of the land. Take note that payment for the registration fee is the responsibility of the
buyer, which is 25% of the selling price. 
Requirements: 
  Deed of absolute sale (photocopy) 
 Official receipt of payment of transfer of tax 
 Certificate Authorizing Registration from BIR 
 Real property tax clearance from the City’s Treasurer’s Office 
 Transfer of Clean Title (original) 
 CTC of the latest tax declaration 
Finally, to the Municipal Assessor’s Office. It ensures that laws and policies are properly
maintained and executed in terms of appraisal of real properties 
Requirements: 
 New Tax Declaration 
 Notarized Deed of Sale (Photocopy) 
 Tax Clearance Certificate 
 Certificate Authorizing Registration (from the BIR) 
 Official receipt of transfer tax payment (original and photocopy) 
  Transfer of Certificate of Title (from the Registry of Deeds) 
 
DEPARTMENT OF TRADE AND INDUSTRY 
BSA 3A-GROUP 2  
 
A. OBJECTIVES- Allysa Villanueva 
 Mission 
 Department of Trade and Industry (DTI) as the government’s main economic catalyst in
enabling innovative, competitive, job-generating, inclusive business, and empowering
consumers. 
 
 Vision 
  DTI Vision 2022 of: 
“A more inclusive and prosperous Philippines with employment and income opportunities  
for all.” 
 
 Values 
  Passion 
  Integrity 
  Creativity 
  Competence-having enough skills and expertise 
  Synergy- interaction and cooperation among market participants 
  Love of Country- support local businesses 
 
 
B. ROLES, STRUCTURES AND AUTHORITIES- Allysa Villanueva 
 Roles 
 DTI is responsible for realizing the country’s goal of globally competitive and innovative
industry and services. 
 Overseeing the effective implementation and enforcement of trade regulation and fair-
trade laws. 
 Advance the rights and responsibilities of consumers. 
-consumer education and information dissemination programs or materials such as Consumer
Alerts, Tips, and Advisories. 
 DTI commits to effect good governance by delivering public service that is predictable,
participatory, accountable, efficient, transparent, and honest. 
 
 Pursuant to Philippine Development Plan (PDP) 2017-2022 
-DTI shall endeavor to reduce inequality and poverty by expanding economic opportunities in
industry and services, and by increasing the access particularly of micro, small and medium
enterprises (MSMEs), cooperatives and overseas Filipinos (OFs) to these opportunities. 
 
To attain these sector outcomes by 2022, DTI shall: 
1. Increase local and foreign direct investments 
2. Increase competitiveness, innovativeness and resilience of industries and services 
3. Improve access to finance, to production networks, and to markets 
4. Enhance productivity, efficiency, and resilience 
5. Ensure consumer access to safe and quality goods and services 
 
Six Major Programs: 
1. Exports and Investment Development Program 
2. Industry Development Program 
3. SME Development Program 
4. Consumer Protection Program 
5. Consumer Education and Advocacy Program 
6. Good Governance Program 
 
 Trivia 
 Department of Commerce 
-DTI had its beginnings on 23 June 1898 by President Emilio F. Aguinaldo. 
-He formed four government agencies, namely the Departments of Navy, Commerce,
Agriculture, and Manufacturing. 
 Ministry of Trade and Industry 
-Creation on 27 July 1981 by Marcos government. 
-Marcos viewed that there is a need to hew industrial promotion efforts with the expansion of
Philippine trade overseas.  
 Department of Trade and Industry 
-President Corazon C. Aquino signed on 27 February 1987 EO 133. 
-Reorganized the Ministry of Trade and Industry and renaming it the Department of Trade and
Industry (DTI). 
 
 6 Functional Groups of DTI 
DTI has six (6) major functional groups (FGs) which report directly to the Office of the Secretary
(OSEC).  
 
1. Competitiveness and Innovation Group (CIG)  
– Established in support of Agenda 3 of the President’s 0+10 socio-economic agenda to increase
competitiveness, innovation, and ease of doing business. 
2. Consumer Protection Group (CPG)  
–enforcement of laws to protect consumers, consumer education, and formation of consumer
groups. 
3. Industry Development and Trade Policy Group (IDTPG)  
– Responsible for trade and industry policy formulation and implementation of the
Manufacturing Resurgence Program. 
4. Management Services Group (MSG)  
– Ensures operational efficiency within the Department by providing support services to all units
to properly equip them in the performance of their respective functions.  
5. Regional Operations Group (ROG)  
– Responsible for the field operations of the DTI in the regions and provinces. 
6. Trade Promotions Group (TPG)  
– Responsible for DTI’s export and investment development program. 
 
 Organizational/ Department Structure 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 Office Of The Secretary (OSEC) 
 
 
 
 provides full support and efficient coordination of information to the DTI Secretary and
among the functional groups of the Department. 
 Secretary of the Department of Trade and Industry (DTI), is the chair of the DTI ExCom. 
 Authority to discharge DTI powers and functions. 
 
 
Other roles: 
1. To advise the President of the Philippines on matters related to trade and investments,
and industry. 
2. Establish policies and standards for the effective, efficient, and economical operations of
the Department. 
3. To supervise and control all offices, functions, and activities. 
4. To delegate authority for the performance of any administrative or substantive function to
any cretary or other officials. 
5. To ensure the clear delineation of the functions. 
 
 
 
 
 
 
The Executive Committee Members- Undersecretaries 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
C. KEY APPLICABLE LAWS- Mary Joy Pacunayen 
 
 FAIR TRADE 
 MSMEs 
 E-COMMERCE 
 BUSINESS NAME 
 EXPORTS 
 
FAIR TRADE – Consumer Related Laws 
 
Republic Act No. 7394 
The Consumer Act of the Philippines 
Date of Issuance – April 13, 1992 
Department Administrative Order No. 2, s. 1993 
Rules and Regulations implementing Republic Act No. 7394, otherwise known as the Consumer
Act of the Philippines 
Date of Issuance – June 10, 1993 
Title I, Article 1 This Act shall be known as the “Consumer Act of the Philippines.” 
WHAT ARE THE OBJECTIVES OF THIS ACT? 
Article 2, Declaration of Basic Policy. — It is the policy of the State to protect the interests of
the consumer, promote his general welfare and to establish standards of conduct for business and
industry. Towards this end, the State shall implement measures to achieve the following
objectives: 
a) protection against hazards to health and safety; 
b) protection against deceptive, unfair and unconscionable sales acts and practices; 
c) provision of information and education to facilitate sound choice and the proper exercise of
rights by the consumer; 
d) provision of adequate rights and means of redress; and 
e) involvement of consumer representatives in the formulation of social and economic policies. 
Title III 
 the Protection Against Deceptive, Unfair and Unconscionable Sales Acts or Practices whereas
the implementing agency is the DTI or the Department of Trade and Industry. 
 
The State shall promote and encourage fair, honest and equitable relations among parties in
consumer transactions and protect the consumer against deceptive, unfair and unconscionable
sales acts or practices. 
 
Deceptive acts or Practices 
An act or practice shall be deemed deceptive whenever the producer, manufacturer, supplier or
seller, through concealment, false representation or fraudulent manipulation, induces a consumer
to enter into a sales or lease transaction of any consumer product or service.  
It is said to be deceptive when it represents that 
a. a consumer product or service has the sponsorship, approval, performance,
characteristics, ingredients, accessories, uses, or benefits it does not have; 
b. a consumer product or service is of a particular standard, quality, grade, style, or model
when in fact it is not.  
c. a consumer product is new, original or unused, when in fact, it is in a deteriorated,
altered, reconditioned, reclaimed or second-hand state; 
d. consumer product or service is available to the consumer for a reason that is different
from the fact; 
e. a consumer product or service has been supplied in accordance with the previous
representation when in fact it is not; 
f) a consumer product or service can be supplied in a quantity greater than the supplier intends; 
g) a service, or repair of a consumer product is needed when in fact it is not; 
h) a specific price advantage of a consumer product exists when in fact it does not; 
i) the sales act or practice involves or does not involve a warranty, a disclaimer of warranties,
particular warranty terms or other rights, remedies or obligations if the indication is false; 
j) the seller or supplier has a sponsorship, approval, or affiliation he does not have. 
 
Unfair And Unconscionable Sales Act or Practices 
An act or practice shall be deemed unfair or unconscionable whenever the producer,
manufacturer, distributor, supplier or seller, by taking advantage of the consumer’s physical or
mental infirmity, ignorance, illiteracy, lack of time or the general conditions of the environment
or surroundings, induces the consumer to enter into a sales or lease transaction grossly inimical
to the interests of the consumer or grossly one-sided in favor of the producer, manufacturer,
distributor, supplier or seller. 
These following circumstances shall be considered: 
a)              that the producer, manufacturer, distributor, supplier or seller took advantage of the
inability of the consumer to reasonably protect his interest because of his inability to understand
the language of an agreement, or similar factors; 
b)              that when the consumer transaction was entered into, the price grossly exceeded the
price at which similar products or services were readily obtainable in similar transaction by like
consumers; 
c)              that when the consumer transaction was entered into, the consumer was unable to
receive a substantial benefit from the subject of the transaction; 
d)              that when the consumer transaction was entered into, the seller or supplier was aware
that there was no reasonable probability or payment of the obligation in full by the consumer;
and 
e)              that the transaction that the seller or supplier induced the consumer to enter into was
excessively one-sided in favor of the seller or supplier. 
 
Labeling and Fair Packaging 
The State shall enforce compulsory labeling, and fair packaging to enable the consumer to obtain
accurate information as to the nature, quality and quantity of the contents of consumer products
and to facilitate his comparison of the value of such products. 
ARTICLE 77.          Minimum Labeling Requirements for Consumer Products. — All consumer
products domestically sold whether manufactured locally or imported shall indicate the
following in their respective labels of packaging: (VISIBLE) 
a) its correct and registered trade name or brand name; 
b) its duly registered trademark; 
c) its duly registered business name; 
d) the address of the manufacturer, importer, repacker of the consumer product in the
Philippines; 
e) its general make or active ingredients; 
f) the net quality of contents, in terms of weight, measure or numerical count rounded of to at
least the nearest tenths in the metric system; 
g) country of manufacture, if imported; and 
h) if a consumer product is manufactured, refilled or repacked under license from a principal, the
label shall so state the fact. 
The following may be required by the concerned department in accordance with the rules and
regulations they will promulgate under authority of this Act: 
a) whether it is flammable or inflammable; 
b) directions for use, if necessary; 
c) warning of toxicity;                 
d) wattage, voltage or amperes; or 
e) process of manufacture used if necessary 
 
 
Warranty 
Terms of express warranty. — Any seller or manufacturer who gives an express warranty shall: 
1) set forth the terms of warranty in clear and readily understandable language and clearly
identify himself as the warrantor; 
2) identify the party to whom the warranty is extended; 
3) state the products or parts covered; 
4) state what the warrantor will do in the event of a defect, malfunction of failure to conform to
the written warranty and at whose expense; 
5) state what the consumer must do to avail of the rights which accrue to the warranty; and 
6) stipulate the period within which, after notice of defect, malfunction or failure to conform to
the warranty, the warrantor will perform any obligation under the warranty. 
In case of implied warranty, the period shall not be less than 60 days not more than one year  
AND THEN THE Enforcement of warranty or guarantee. — The warranty rights can be
enforced by presentment of a claim. To this end, the purchaser needs only to present to the
immediate seller either the warranty card or the official receipt along with the product to be
serviced or returned to the immediate seller. 
The provisions of this Act on warranty shall not apply to professional services of certified public
accountants, architects, engineers, lawyers, veterinarians, optometrists, pharmacists, nurses,
nutritionists, dietitians, physical therapists, salesmen, medical and dental practitioners and other
professionals engaged in their respective professional endeavors.  
THE MEANS OF REMEDIS PROVIIDED IN THIS LAW we have 3R, Repair, Refund, and
Replacement. 
Department Administrative Order No. 20-02, S.2020 
Revised Rules of Mediation and Adjudication of DTI. 
Date of Issuance : February 7, 2020 
  
What to do in case of violation of the Consumer Act or other trade and industry laws? 
Initial Complaints 
An initial complain is a written statement filed by a consumer, personally by mail or through any
electronic means or otherwise, expressing grievance over a violation of the Consumer Act of the
Philippines and other trade and industry laws arising from consumer transaction. 
Upon its filing the concerned DTI office or officer shall ensure to be obtained the following: 
1. Names, addressed and contact details of the parties and 
2. Brief narration of facts including relief prayed for and all necessary evidence to support
the claim. 
 
Where to file a complaint? 
All complaint shall be filed with the FTEB-MD Fair Trade Enforcement Bureau- Mediation
Division, DTI-RO DTI Regional Office, DTI-PO DTI Provincial Office, and/ or to
the consumercare@dti.gov.ph. 
The complainant may file an initial complain to the DTI, and on the period of 2 working days
DTI must already endorse the said complaint to the business. Whereas the business is given 7
days to settle things with the complainant then after the lapse of 7 days, a period of 3 days is
given to the complainant to file or send a formal letter informing the DTI if the matter has been
settled. If not a notice of mediation is issued by the DTI and a mediation officer will be
appointed to facilitate the mediation process. 
Mediation is an intervention by which the DTI through its appointed or designated mediation
officers, facilitates communication and negotiation between the parties, and assists them in
reaching a voluntary settlement of their dispute. 
Mediation is mandatory in all consumer complaints; it is a condition precedent for the filing of
formal complaint for adjudication. 
If the mediation is successful, a settlement agreement will be issue if not a notice of adjudication
together with the filing of the formal complaint for the purpose of the adjudication process. 
Essential requirements to file a formal complaint: 
All formal complaint shall be duly verified, dated and signed, and shall attach the following: 
a. Names and addresses of the parties 
 b. An allegation that the complaint went through mediation process and the same was
certifies for adjudication 
c. Concise statement of material facts and circumstances constituting the causes of action,
including the date, time, and place of commission of the act/s or omission/s complained of 
d. Certificate to File Action, Sworn statements of witnesses and/or object or documentary
evidence if any 
e. The reliefs prayed for, and the preliminary or preventive measures sought if any 
f. A certificate of non-forum shopping 
 
 
 
MICRO, SMALL, MEDIUM ENTERPRISES (MSMEs) 
MSMEs- BMBES ACT OF 2002 
Department Administrative Order No. 1, s. 2003 
Implementing rules and regulation of R.A. 9178, otherwise known as the “Barangay Micro
Business Enterprises (BMBEs) Act of 2002” 
Date of Issuance – February 7, 2003 
Department Administrative Order No. 2, s. 2006 
Implementing Guidelines for the Administration of the BMBE Development Fund under Section
10 of Republic Act 9178, otherwise known as the Barangay Micro Business Enterprises Act of
2002 
Date of issuance – 2006 
The “BMBEs Act of 2002” encourages the formation and growth of barangay micro business
enterprises by granting them incentives and other benefits.  
The Act was signed into law by President Gloria Macapagal-Arroyo on November 13, 2002. Its
Implementing Rules and Regulations (IRR) which was issued on February 7, 2003, as DTI
Department Administrative Order No. 1, Series of 2003, was published twice in the February 11
and 26, 2003 issues of the Manila Bulletin. 
A BMBE is defined as any business enterprise engaged in production, processing, or
manufacturing of products, including agro-processing, as well as trading and services, with total
assets of not more than P3 million. Such assets shall include those arising from loans but not the
land on which the plant and equipment are located. 
 
What is the objective of the law? 
BMBEs are essential to the country’s economic development since they effectively serve as
seedbeds of Filipino entrepreneurial talent. Thus, the Act primarily aims to integrate micro
enterprises in the informal sector into the mainstream of the economy. Strengthening BMBEs
would mean more jobs and livelihood, and a better quality of life for Filipinos. 
 
What are the incentives that BMBEs will be receiving? 
 Income tax exemption from income arising from the operations of the enterprise; 
 Exemption from the coverage of the Minimum Wage Law (BMBE employees will still
receive the same social security and health care benefits as other employees); 
 Priority to a special credit window set up specifically for the financing requirements of
BMBEs; and  
  Technology transfer, production and management training, and marketing assistance
programs for BMBE beneficiaries. 
 
How does one register as a BMBE?  
Based on the guidelines issued by the DTI under DTI DAO No. 01-03 and DOF under the DOF
D.O. No. 17-04 (as amended by DO No. 31-05) any person, cooperative, or association owning
an enterprise that fits the description of a BMBE may register for the first time or renew its
registration with the Office of the Treasurer of the city or municipality where the business is
located. 
a. Accomplish BMBE Form 01 in triplicate and submit to the Office of the Municipal or City
Treasurer.  
b. The Municipal or City Treasurer evaluates the application. The application shall be processed
within 15 working days upon submission; otherwise, the BMBE shall be deemed registered. 
 c. A registered BMBE shall be issued a Certificate of Authority as proof of registration,
effective for a period of two years. The application is renewable every two years. 
 
What document should be filed with BIR  
by an income tax exempt BMBE? 
 
In lieu of an income tax return, an income tax exempt BMBE is required to submit an Annual
Information Return. This is filed on or before the 15th day of the 4th month after the close of the
taxable year with an Account Information Form, which contains data from its financial statement
and Sworn Statement of Assets Owned and/or Used 
 
Is the Income Tax Exemption privilege of a BMBE irrevocable? 
 
The income tax exemption privilege of a BMBE may be revoked for any of the following
reasons: 
 a. Transfer of place of business 
b. Value of its total assets exceeds P3M 
 c. Voluntary surrender of the Certificate of Authority 
d. Death of the registered individual owner of the BMBE; violation or non-compliance with the
provisions of R.A. 9178  
e. Merger or consolidation with an entity which is not eligible to be a BMBE 
f. Sale or transfer of the BMBE, if it is a sole proprietorship without prejudice to the transferee
applying for registration 
g. Submission of fake or falsified documents 
h. Retirement from business, or cessation/suspension of operations for one year; and 
 i. Making false or omitting required declarations or statements 
 
 
 
MSMEs- GO NEGOSYO ACT 
Republic Act No. 10644, otherwise known as “Go Negosyo Act” 
Date of Issuance – July 15, 2014 
Department Administrative Order No. 14-5, s. 2014 
Implementing rules and regulations for Republic Act No. 10644 an act promoting job generation
and inclusive growth through the development of micro, small and medium enterprises,
otherwise known as the “Go Negosyo Act” 
Date of Issuance – December 19, 2014 
What is the basic policy of the “Go Negosyo Act”? 
The basic policy of the “Go Negosyo Act” is to foster national development, promote inclusive
growth, and reduce poverty by encouraging the establishment of MSMEs that facilitate local job
creation, production, and trade in the country. 
• Establishment of Negosyo Centers in all provinces, cities, and municipalities nationwide 
 • Establishment of a Start-up Fund for MSMEs to be sourced from the MSME Development
Fund and BMBE Fund 
• Technology Transfer, Production and Management Training, and Marketing Assistance for
SMEs 
 • A unified and simplified business registration through automatic approval of business permits
and licenses that are not approved for any reason within 15 days and,  
• Re-composition of the MSME Development Council and its additional function 
Who can avail of the services offered by the Negosyo Centers? 
Any person, natural or juridical, having the qualifications as defined in section 3 of the republic
act no. 9178 may avail of the service. 
 
Functions Of Negosyo Center 
 Business Registration Assistance  
 Business Advisory Services 
 Business Information and Advocacy 
 Monitoring And Evaluation 
 
Business Registration Assistance 
i. Accept and facilitate all new registration and renewal application of MSMEs, including
application for Barangay Micro-Business Enterprise (BMBE) 
 ii. Coordinate with the respective local government units (LGUs) and liaise with concerned
government agencies to process the duly accomplished forms submitted by the MSMEs 
iii. Implement a unified business registration process preferably through automated systems such
as the Philippine Business Registry (PBR) 
 
Business Advisory Services 
i. Assist MSMEs in meeting regulatory requirements to start and sustain the business 
 ii. Build local support networks and establish market linkages for MSME development through
the Micro, Small and Medium Enterprise Development (MSMED) Council and DTI 
iii. Facilitate access to grants and other forms of financial assistance, shared service facilities and
equipment, and other support for MSMEs through national government agencies (NGAs) 
iv. Ensure management guidance, assistance, and improvement of the working conditions of
MSMEs 
 v. Co-organize with the local chambers of commerce, other business organizations and
government agencies, a mentoring program for prospective and current entrepreneurs and
investors 
vi. Conduct other programs or projects for entrepreneurial development in the country aligned
with the MSMEs development plan. 
 
Business Information and Advocacy 
i. Provide information and services in training, financing, marketing, and other areas as may be
required by MSMEs 
ii. Establish and maintain a databank which will support business information requirements of
MSMEs 
iii. Promote ease of doing business and access to services for MSMEs within its jurisdiction 
iv. Support private sector activities relating to MSMEs development 
v. Encourage government institutions that are related to the business application process to help
promulgate information regarding the Negosyo Center 
 vi. Coordinate with schools and related organizations on the development of youth
entrepreneurship program 
vii. Encourage women entrepreneurship through access to information, training, credit facilities,
and other forms of assistance 
 
Monitoring and Evaluation 
i. Monitor and recommend business-process improvement for MSMEs 
ii. Establish a feedback mechanism among the MSMEs in the respective jurisdiction
of Negosyo Centers 
 
 
 
ELECTRONIC COMMERCE 
Republic Act No. 8792 
Electronic Commerce Act 
 
Objective of R.A. 8792 
 
This Act aims to facilitate domestic and international dealings, transactions, arrangements,
agreements, contracts and exchanges and storage of information through the utilization of
electronic, optical, and similar medium, mode, instrumentality, and technology to recognize the
authenticity and reliability of electronic data messages or electronic documents related to such
activities and to promote the universal use of electronic transactions in the government and by
the general public. 
Sphere of Application 
This Act shall apply to any kind of electronic data message and electronic document used in the
context of commercial and non-commercial activities to include domestic and international
dealings, transactions, arrangements, agreements, contracts and exchanges and storage of
information. 
Carriage Of Goods 
With reference to electronic commerce in carriage of goods, the new law provides in Section 26
thereof that "where the law requires that any action (in connection with a contract of carriage of
goods) be carried out in writing or by using a paper document, that requirement is met if the
action is carried out by using one or more electronic data or electronic documents." Thus,
electronic messages or electronic documents may be used as "functional equivalents" of written
or paper documents 
 
 
BUSINESS NAME 
Department Administrative Order No. 10- 08 Series Of 2010 
Further amending the revised implementing rules and regulations of act no. 3883, as amended,
otherwise known as the business name law 
Business Name (BN) 
Shall refer to any name that is different from the true name of an individual which is used or
signed in connection with her/his business on any written or printed receipts, including receipts
for business taxes, duties and fees and withdrawal or delivery receipts; any written or printed
evidence of any agreement or business transaction; and any sign or billboard conspicuously
exhibited in plain view in, or at the place of her/his business or elsewhere, announcing her/his
business. 
 
What is the purpose of this act? 
The primary purpose of this Order is to provide protection to the public dealing with business
establishments through disclosure of the identity and citizenship of the person owning and
operating the business as well as other facts of records in the Department of Trade and Industry. 
 Secondly, preventing a business establishment from using a name that is identical or confusingly
similar to the name of another registered business establishment. 
Coverage 
These rules shall apply only to natural persons doing business or proposing to do business in the
Philippines using a Business Name as defined in this Order. 
Contents Of Application Form 
 Proposed BN and two alternative BNs, in order of preference 
 Full name of the Applicant 
 Complete Residential address of the Applicant 
 Citizenship of the Applicant 
 Date of birth of the Applicant  
 Tax Identification No. of the Applicant 
 Business location 
 Undertaking 
Validity 
Validity the certificate of BN registration shall be valid for five (5) years from the date of
registration unless sooner cancelled voluntarily pursuant to section 19.2 or revoked pursuant to
section 28 of this order. 
Period To File 
Original Application The original application must be filed AT ANYTIME before the
commencement of the applicant's business operation. 
Applications for renewal shall be filed WITHIN SIX (6) MONTHS IMMEDIATELY
FOLLOWING the expiration of the registration. If the renewal APPLICATION is FILED
WITHIN the last three (3) months thereof, a surcharge of Fifty Percent (50%) of the registration
fee shall be imposed 
 
SECTION 27: BNs THAT ARE NOT REGISTRABLE 
27.1 those which are or whose natures of business are illegal, offensive, scandalous, or contrary
to propriety.  
27.2 those which are identical or nearly resemble a bn already registered with the DTI except
when expressly allowed in this order 
27.3 names composed purely of generic or geographic words 
27.4 names which by law or regulation cannot be appropriated 
27.5 names, words, terms, or expressions used to designate or distinguish, or suggestive of
quality of any class of goods, articles, merchandise, or service 
 
Section 28: Grounds for Revocation 
28.1 Registration of any of the BNs mentioned in Section 27 hereof 
28.2 Making any false or misleading information in the application for registration or engaging
in acts of misrepresentation for the purpose of securing registration or renewal thereof such as
production of materially false or misleading document 
28.3 Failure to display business name in a signboard and/ or registration certificate upon
commencement of, and while engaging in business 
28.4 Failure to operate business within a period of six (6) months from registration of the BN 
28.5 Change of OWNER'S address AND BUSINESS LOCATION without prior approval of the
Department 
28.6 Registration of those which may be used in a manner that will endanger the security of the
State; 28.7 Use of the BN for an immoral or illegal purpose or in a business found to be involved
in immoral or unlawful activity 
28.8 Contravention or failure to comply with any provisions of these rules and  
28.9 Gross violation of any law implemented by the Department. However, a Certificate of
Business Name Registration may be revoked motu proprio upon prior notice to the registrant in
case of: 
 
EXPORT 
Department Administrative Order No. 19- 04 Series Of 2019  
Guidelines resolving export trade complaints formally lodged with the department of trade and
industry revising dao no. 14-1, s. 2014 
Scope 
 Non-Payment of Delivery 
 Non-Delivery of Paid Order 
 Cancelled Letter of Credit Order 
 Short shipments 
 Non-compliance to Quality Classification 
 Unjustified non-performance of obligation 
 
Complaints Procedure 
Place of Filing 
Export trade complaint may be filed with the EMB, any DTI office, DTI attached agencies, or
the PTIC. The export trade complaint shall be immediately endorsed to the ETCC secretariat. 
Form of Complaint 
All expert trade complaints must be in writing and signed by the complainant and may be in
electronic document for. 
Upon filing of the complain and endorsed to the ETCC, a Notice to Answer will be issue to the
business with an order to file an answer within 15 calendar days from the receipt of the notice.
Failure to file such answer construed as a waiver of its right to be heard in the evaluation. 
If the respondent agrees to the mediation, mediation officer will commence the mediation
process. 
In the case that the parties reach a settlement agreement it must be in writing and signed by both
parties and be submitted to the mediation officer to declare the mediation as settled. 
If the respondent refuse to the mediation the mediation officer shall declare failure of mediation. 
After the termination of the Mediation process, the mediation officer will prepare an executive
summary to be submitted to the ETCC.  
Upon the receipt of the ETCC a Resolution will be made and submit to the Supervising
Undersecretary to declare the same as approve or disapprove. 
 
D. LATEST UPDATES AND NEWS- Mary Joy Pacunayen 
 
 DTI approves 3-5% price hikes on basic goods 
Published July 21, 2021, 1:21 PM 
by Bernie Cahiles-Magkilat 
 
Prices of basic necessities and prime commodities will increase by 3 to 5 percent or P0.75
centavos to P1 per can of sardines and canned meats, a situation that will likely worsen the
country’s already elevated inflation level. 
In a television interview, DTI Secretary Ramon M. Lopez said the price increases in basic goods,
which will be issued via the new suggested retail prices (SRPs), will be the first adjustment in
two years or since the last SRP was issued on September 30, 2019. 
The new SRP will be published prior to their effectivity, said Lopez. DTI Undersecretary for
Consumer Welfare and Protection Ruth Castelo said they are still finalizing the new SRP. 
Lopez justified the upcoming price hikes based on their studies that showed increases in inputs to
production such as raw materials and packaging. 
 
 DTI: PRESYONG RISONABLE DAPAT (PRD) PROGRAM FROZEN
MEAT EDITION CONTINUES 
Another Presyong Risonable Dapat (PRD) – Frozen Meat Edition Weekend Pop-up was
successfully held on 28 August 2021, from 10:00 AM – 4:00 PM at the Station Grill (The
Studio) Riverbanks Ave., Riverbanks Center, Barangka Marikina City. 
The Department of Trade and Industry (DTI) and the Department of Agriculture (DA) continues
to partner with the local government units and private establishments to bring affordable yet
high-quality meat products to consumers amidst the community quarantine. Aside from frozen
meat products, ready-to-cook meals and processed food were sold at discounted prices during the
weekend pop-up. 
The PRD Program – Frozen Meat Edition is scheduled to be conducted in different areas in the
National Capital Region (NCR) every week.  Consumers may also buy frozen meat at lower
prices in 83 supermarket branches of Robinsons, 25 supermarket branches of Puregold, and 10
retail outlets of participating meat importers and traders.
Recently, WalterMart’s North Edsa Supermarket also joined the progra 
 
KEY REGULATORY REQUIREMENTS AND IES FOR NON-COMPLIANCE 
 
DEPARTMENT OF TRADE & INDUSTRY 
 
TABLE OF CONTENTS 
 
I. START UPS (Registering a Business) 
 
Why? To be LEGAL 
 
What are the Benefits? 
 
 Tax Returns are proof of income. These are documents that certify your ability to
pay. If you have applied for a loan, a credit card, or rented a condominium, you may
have encountered this type of document. 
 
 Secures reputation as a legitimate business. When dealing with other businesses or
big clients, it is almost mandatory to provide a certificate of registration. This will allow
you and other businesses to determine whether the other party is a legitimate business
and is not just a scam. 
 
 
 Low-interest loans and other government benefits. The government provides free
seminars for registered businesses as long as they provide the required documents. For
example, the BIR gives free tax briefing for new registrants to allow them to know all
their responsibilities as a business owner. The DTI also provides free seminars, like this
which allow business owners to learn from other successful entrepreneurs on what to do,
where to get suppliers, when to expand, etc. The DTI also provides free services like logo
making, branding, and consultations with professionals. 
 
 Avoid unnecessary penalties and avoid the risk of getting jail time. Failure to
register your business and timely filing of your tax returns are considered crimes. Yes, if
you neglect your responsibilities as a taxpayer, you may risk getting imprisoned. This is
the most common form of tax evasion and is punishable by a fine of between Php 5,000
and Php 20,000, and up to 2 years in jail. Fortunately, the BIR has made a compromise
that the taxpayer has the option to just pay a specified amount instead of being
imprisoned. 
 
 
Requirements for Registering Business 
 
 Certificate of Business Name Registration from the Department of Trade and
Industry (DTI) 
 
 Barangay/Municipality/Regional clearance (depending on the scale and scope of the
intended operations) 
 
 
 Business permit from mayor’s office 
 
 Business Tax Identification Number (TIN) 
 
 
 
 
 
 
Certificate of Business Name Registration 
 
What’s in a name? In a business, it means a lot. Your business name is your company’s
branding, so it should catch attention and can be easily recalled. A business without a name
is barely a business because it doesn’t have an identity that customers can remember.
Moreover, two businesses with identical names can confuse potential customers and might
put all marketing efforts to waste. 
 
Thus, the Department of Trade and Industry (DTI) encourages every entrepreneur to get a
DTI Certificate of Registration. Aside from spending time coming up with a name for your
new business, you also need to register it with the DTI, if you’re a sole proprietor. 
 
Business name registration is required in the Philippines. According to the Business Name
Law (Republic Act 3883), it’s illegal for anyone to use any name for a business other than
the owner’s true name without first registering the business name with the DTI. 
 
In short, securing your trade name will guarantee you the legal and exclusive right to use it
within its validity period (renewable every five years). This means no other business can
register or use your business name in the barangay, city or municipality, region, or
country, depending on your business location coverage. However, note that business name
registration with the DTI is only for sole proprietors and not a license to run a business
(You’ll need to secure a business permit and other related documents for that purpose). 
 
Walk-in / Over-the-Counter Applicationfor DTI Registration 
 
 Go to any DTI office or Negosyo Center.[3] 
 
 Submit all the DTI business registration requirements. Make sure to have a list of
backups in case your three proposed business names are already taken. 
 
 
 Pay the business name registration fee. 
 
 Once DTI approves your business name, it will issue a Certificate of Business Name
Registration to you. 
 
 
All applicants (except for those filing their application online) must download, print, and
fill out two copies of the Business Name Registration Form[1] and present any of the
following valid IDs: 
 
 Passport 
  
 Driver’s license 
  
 UMID 
  
 PRC ID 
  
 NBI Clearance 
  
 Police Clearance (in ID form) 
  
 Postal ID 
  
 Voter’s ID 
  
 OWWA ID 
  
 Seaman’s Book 
  
 IBP ID 
  
 Senior citizen ID 
  
 PWD ID 
  
 Government office ID 
  
 Validated state college/university ID 
  
Additional documents are required depending on the applicant: 
 
● For foreign nationals: Alien Certificate of Registration and Certificate of Registration for
Sole Proprietorship/Certificate of Authority to Engage in Business in the Philippines issued
by the concerned DTI office 
 
 ● For refugees/stateless people: Certificate of Recognition issued by the DOJ-RSPPU or
Certificate of Recognition 
 
Foreigners, refugees, and stateless people who apply for DTI business registration online
still need to submit the documents listed above at any DTI office. 
 
There’s also a business name registration fee that varies per business territorial scope: 
 
● Barangay – PHP 200 
 
● City/Municipality – PHP 500 
 
● Regional – PHP 1,000 
 
● National – PHP 2,000 
 
DTI and BIR Registration may be done within 1 to 2 business days. 
 
All applications for DTI business name registration should be filed through the Business
Name Registration System (BNRS). No need to visit a DTI office to get a Certificate of
Business Name Registration.Here are the steps to register your business name online
through the BNRS. 
 
● Access the New Registration page of the BNRS site. Go to bnrs.dti.gov.ph/registration
and read the Terms and Conditions. When you’re done, click the I Agree button at the
bottom of the page. 
 
● Fill out the online registration form. Fields marked with a red asterisk must not be left
blank. Your tax identification number (TIN) must also be provided on the online form. 
 
● Pay the business name registration fee within seven calendar days from the online
application date. 
 
● Upon successful payment transaction, you’ll receive the Certificate of Business Name
Registration via email. 
 
● Once your payment is confirmed, click on “Register New Business” to complete the
online DTI registration of your business name. 
 
Failure to register your business and timely filing of your tax returns are considered
crimes. Yes, if you neglect your responsibilities as a taxpayer, you may risk getting
imprisoned. This is the most common form of tax evasion and is punishable by a fine of
between Php 5,000 and Php 20,000, and up to 2 years in jail. 
 
II. IN LINE (Business in the Industry) 
 
What Business Information Can be Changed? 
 
Change in the details of your business will only be allowed if your registration has not
expired or has not been canceled previously. You can apply online or physically in any DTI
branch for the change of the following details only: 
 
● Business address 
 
● Line of business – This portion can be changed only if the new proposed line of business
is in line with the existing one and relevant to the approved business name. Otherwise, if
the line of business is not applicable to your chosen business name, a new application for
registration will be necessary. 
 
● Products and services 
 
● Name of the registrant – In case the name of the registrant should be changed following
marriage or any judicial process, the change should be supported by an original copy of the
marriage certificate or any document that could verify the judicial decree. 
 
Who Can Change the Business Information? 
 
● Changes in the information of an existing business can be done by the proprietor. All
documents required for the application for change should be signed by the registered
business owner. If the request for change is filed before the registration expires, then a
Certificate of Change will be issued as a supplementary document to the Certificate of
Registration 
 
● For single proprietors, the application can be done online. Juridical persons who apply
for change must bring or submit a board resolution or any other equivalent document. 
 
Once the application for change is submitted, it will be subject to the approval of DTI and
shall be issued once payment has been made. 
 
Business Address 
 
Single Proprietorship 
 
 Request letter for the additional line of business 
 
 Preferably with photocopy of the business name certificate 
 
 
Corporation/Partnership 
 
 Board resolution requesting for the change of address 
 
  Certified true copy of the amended articles of incorporation (if applicable) 
 
 
 Copy of notification letter informing SEC of the change of address 
 
 Xerox copy of the BN certificate 
 
 
 
 
Line of Business 
 
Single Proprietorship 
 
 Request letter for the additional line of business 
 
 Preferably with photocopy of the business name certificate 
 
 
Corporation/Partnership 
 
 Board resolution requesting for additional line of business 
 
 Certified true copy of the amended articles of incorporation 
 
 
Why we renew our business name, simple, if we want to continue the business and for it to
be legal, we should renew our business. The renewal of business name comes on Online
registration. 
 
● If the business name is renewed past the three (3) months period following the expiration
of the license, an additional PhP 100.00 surcharge will be added to the renewal fee. 
 
● If your business name expires, and you wish to continue using the name, you will be
required to re-register the name. 
 
Who can renew a business name 
 
● Only a current proprietor of the business name can sign the renewal statement. 
 
● If the proprietors have changed, it will be necessary for a ‘Change of Particulars of
Registered Business Name’ to be lodged prior to, or at the time of renewal. 
 
● What happens after submitting my application for renewal 
 
● On receipt of the renewal statement, relevant documents and the renewal fee, your
business name will be valid for five years. A new certificate will be given to you. 
 
General Requirements 
 
For Single Proprietorship: 
 
 BTRCP Form No. 16A BTRCP16A – Business Name Application for Sole
Proprietorships (Original and Renewal) [to be printed using Legal-sized bond paper
(8.5” x 14”)] 
 
● Original copy of Business Name Certificate 
 
● If original copy is lost, affidavit of loss of owner 
 
● Two copies of latest 2x2 ID pictures bearing applicant’s signature at the back 
 
● Payment of Php300.00 
 
● Payment for documentary stamp of Php15.00 
 
For a Corporate Name Registered as a Business Name: 
 
 BTRCP Form No. 16B BTRCP16B- Business Name Application for Corporations,
Partnership and Other Juridical Entities (Original and Renewal) [to be printed using
Legal-sized bond paper (8.5” x 14”)] 
 
● Original copy of Business Name Certificate 
 
● If original copy is lost, affidavit of loss of owner 
 
● Certified true/machine copy of the Securities and Exchange Commission (SEC)
Registration Certificate and Articles of Incorporation by SEC or Corporate Secretary in
each of the pages 
 
● If registering an adopted name, board resolution for the use and registration of an
adopted name 
 
● Board Resolution re appointment of the authorized signatory, if signatory is not one of
the incorporators 
 
● Payment of Php500.00 
 
● Payment for documentary stamp of Php15.00 
 
For Cooperatives: 
  
● BTRCP Form No. 16B BTRCP16B- Business Name Application for Corporations,
Partnership and Other Juridical Entities (Original and Renewal) [to be printed using
Legal-sized bond paper (8.5” x 14”)] 
 
● Original copy of Business Name Certificate 
 
● Certified true copy of the Cooperative Development Authority (CDA) Certificate and
Articles of Cooperation by CDA or Board Secretary in each of the pages 
 
● If registering an adopted name, board resolution for the use and registration of an
adopted name 
 
● Board Resolution re appointment of the authorized signatory, if signatory is not one of
the board members 
 
● Payment of Php500.00 
 
● Payment for documentary stamp of Php15.00 
 
Failure to renew business name registration within six months after the expiration date
would mean an automatic cancellation of the business name from the database. In the old
manual scheme, change of business name information was done through DTI tellers. 
 
III. END LINE (Disclosing the Business) 
 
Requirements for Voluntary Cancellation 
 
Sole Proprietor 
 
● Submission of Other BN-Related Application Form prescribed in Annex D signed by the
registered BN owner; 
 
● Presentation of one (1) valid ID of the BN owner as listed in Annex A; 
 
● Submission of Other BN-Related Application Form prescribed in Annex D signed by the
registered BN owner; 
 
● Payment of fee prescribed in Annex E. 
 
● Submission of a declaration under oath that the cancellation is not intended to defraud
creditors and that he/she has no outstanding and pending financial obligation in connection
with his/her business or that he/she has notified all the creditors of such cancellation, as the
case may be; 
 
Corporation/Partners 
  
● Letter request signed by the authorized signatory 
 
● Certified photocopy of the SEC certificates of dissolution of the corporation/partnership 
 
● Original copy of the business name certificate of registration and the duplicate copy of
the application form. 
 
IV. ADDITIONAL (Franchising) 
 
Requirements for Franchising 
 
 Business address, email address, internet home page / website, fax numbers and
other Contact details. 
 
 Copy of the DTI or SEC Registration Cover page 
 
 
 Parent companies and affiliates, if any, and their respective description of their
qualifications and background, ownership of interest and references. 
 
 Declaration of the initial fee, amount that will be collected and services covering
these fees 
 
 
 Training that will be provided, number of persons, how long and training modules 
 
 Name of the Board Directors and officers with a brief description of their
qualifications and background, ownership of interest and references and background of
Franchise Manager. 
 
 
 The contact number and business location of existing Franchisees 
 
 Executed promotional / marketing materials 
 
 
 Numbers of years Company has operated and number of years it has franchised and
number of years it has franchised with corresponding numbers of company owned
branches and franchised branches 
 
 Copy of Memorandum of Agreement and Franchise Agreement 
 
 
 Description of the business concept, which includes brand image, brand personality,
unique selling proposition, target market, mission and mission 
 
 Basic Information on training, commercial and / or technical assistance 
 
 
 Certificate that the Franchisor is a member in good standing of any Franchisor
Association and that the Franchisor has no pending administrative, civil or criminal case 
 
 Full disclosure of the financial requirements of the franchise business and expected
P&L 
 
 
 A provision that requires the franchise applicant to seek adequate legal and
financial counsel before signing the Franchise Agreement 
 
 Mechanism for dispute resolution 
 
 
 Copy of the Trademark or Trademark application 
 
 
 KEY REGULATORY REQUIREMENTS AND PENALTIES FOR NON-COMPLIANCE 
DEPARTMENT OF TRADE & INDUSTRY 
TABLE OF CONTENTS 
I. START UPS (Registering a Business) 
Why? To be LEGAL 
What are the Benefits? 
 Tax Returns are proof of income. These are documents that certify your ability to pay.
If you have applied for a loan, a credit card, or rented a condominium, you may have
encountered this type of document. 
 Secures reputation as a legitimate business. When dealing with other businesses or big
clients, it is almost mandatory to provide a certificate of registration. This will allow you and
other businesses to determine whether the other party is a legitimate business and is not just a
scam. 
 Low-interest loans and other government benefits. The government provides free
seminars for registered businesses as long as they provide the required documents. For
example, the BIR gives free tax briefing for new registrants to allow them to know all their
responsibilities as a business owner. The DTI also provides free seminars, like this which allow
business owners to learn from other successful entrepreneurs on what to do, where to get
suppliers, when to expand, etc. The DTI also provides free services like logo making, branding,
and consultations with professionals. 
 Avoid unnecessary penalties and avoid the risk of getting jail time. Failure to register
your business and timely filing of your tax returns are considered crimes. Yes, if you neglect
your responsibilities as a taxpayer, you may risk getting imprisoned. This is the most common
form of tax evasion and is punishable by a fine of between Php 5,000 and Php 20,000, and up
to 2 years in jail. Fortunately, the BIR has made a compromise that the taxpayer has the option
to just pay a specified amount instead of being imprisoned. 
Requirements for Registering Business 
 Certificate of Business Name Registration from the Department of Trade and Industry
(DTI) 
 Barangay/Municipality/Regional clearance (depending on the scale and scope of the
intended operations) 
 Business permit from mayor’s office 
 Business Tax Identification Number (TIN) 
 
 
Certificate of Business Name Registration 
What’s in a name? In a business, it means a lot. Your business name is your company’s
branding, so it should catch attention and can be easily recalled. A business without a name is
barely a business because it doesn’t have an identity that customers can remember.
Moreover, two businesses with identical names can confuse potential customers and might put
all marketing efforts to waste. 
Thus, the Department of Trade and Industry (DTI) encourages every entrepreneur to get a DTI
Certificate of Registration. Aside from spending time coming up with a name for your new
business, you also need to register it with the DTI, if you’re a sole proprietor. 
Business name registration is required in the Philippines. According to the Business Name Law
(Republic Act 3883), it’s illegal for anyone to use any name for a business other than the owner’s
true name without first registering the business name with the DTI. 
In short, securing your trade name will guarantee you the legal and exclusive right to use it
within its validity period (renewable every five years). This means no other business can register
or use your business name in the barangay, city or municipality, region, or country, depending on
your business location coverage. However, note that business name registration with the DTI is
only for sole proprietors and not a license to run a business (You’ll need to secure a business
permit and other related documents for that purpose). 
Walk-in / Over-the-Counter Applicationfor DTI Registration 
 Go to any DTI office or Negosyo Center.[3] 
 Submit all the DTI business registration requirements. Make sure to have a list of
backups in case your three proposed business names are already taken. 
 Pay the business name registration fee. 
 Once DTI approves your business name, it will issue a Certificate of Business Name
Registration to you. 
All applicants (except for those filing their application online) must download, print, and fill
out two copies of the Business Name Registration Form[1] and present any of the following valid
IDs: 
o Passport 
o Driver’s license 
o UMID 
o PRC ID 
o NBI Clearance 
o Police Clearance (in ID form) 
o Postal ID 
o Voter’s ID 
o OWWA ID 
 o Seaman’s Book 
o IBP ID 
o Senior citizen ID 
o PWD ID 
o Government office ID 
o Validated state college/university ID 
Additional documents are required depending on the applicant: 
 For foreign nationals: Alien Certificate of Registration and Certificate of Registration
for Sole Proprietorship/Certificate of Authority to Engage in Business in the Philippines issued
by the concerned DTI office 
 For refugees/stateless people: Certificate of Recognition issued by the DOJ-RSPPU or
Certificate of Recognition 
Foreigners, refugees, and stateless people who apply for DTI business registration online still
need to submit the documents listed above at any DTI office. 
There’s also a business name registration fee that varies per business territorial scope: 
 Barangay – PHP 200 
 City/Municipality – PHP 500 
 Regional – PHP 1,000 
 National – PHP 2,000 
DTI and BIR Registration may be done within 1 to 2 business days. 
All applications for DTI business name registration should be filed through the Business Name
Registration System (BNRS). No need to visit a DTI office to get a
Certificate of Business Name Registration.Here are the steps to register your business name
online through the BNRS. 
 Access the New Registration page of the BNRS site. Go to bnrs.dti.gov.ph/registration
and read the Terms and Conditions. When you’re done, click the I Agree button at the bottom
of the page. 
 Fill out the online registration form. Fields marked with a red asterisk must not be left
blank. Your tax identification number (TIN) must also be provided on the online form. 
 Pay the business name registration fee within seven calendar days from the online
application date. 
 Upon successful payment transaction, you’ll receive the Certificate of Business Name
Registration via email. 
 Once your payment is confirmed, click on “Register New Business” to complete the
online DTI registration of your business name. 
Failure to register your business and timely filing of your tax returns are considered crimes.
Yes, if you neglect your responsibilities as a taxpayer, you may risk getting imprisoned. This is
the most common form of tax evasion and is punishable by a fine of between Php 5,000
and Php 20,000, and up to 2 years in jail. 
II. IN LINE (Business in the Industry) 
What Business Information Can be Changed? 
Change in the details of your business will only be allowed if your registration has not expired or
has not been canceled previously. You can apply online or physically in any DTI branch for the
change of the following details only: 
 Business address 
  Line of business – This portion can be changed only if the new proposed line of business
is in line with the existing one and relevant to the approved business name. Otherwise, if the
line of business is not applicable to your chosen business name, a new application for
registration will be necessary. 
 Products and services 
 Name of the registrant – In case the name of the registrant should be changed following
marriage or any judicial process, the change should be supported by an original copy of the
marriage certificate or any document that could verify the judicial decree. 
Who Can Change the Business Information? 
 Changes in the information of an existing business can be done by the proprietor. All
documents required for the application for change should be signed by the registered business
owner. If the request for change is filed before the registration expires, then a Certificate of
Change will be issued as a supplementary document to the Certificate of Registration 
 For single proprietors, the application can be done online. Juridical persons who apply for
change must bring or submit a board resolution or any other equivalent document. 
Once the application for change is submitted, it will be subject to the approval of DTI and shall
be issued once payment has been made. 
Business Address 
Single Proprietorship 
 Request letter for the additional line of business 
 Preferably with photocopy of the business name certificate 
Corporation/Partnership 
 Board resolution requesting for the change of address 
 Certified true copy of the amended articles of incorporation (if applicable) 
 Copy of notification letter informing SEC of the change of address 
 Xerox copy of the BN certificate 
 
Line of Business 
Single Proprietorship 
 Request letter for the additional line of business 
 Preferably with photocopy of the business name certificate 
Corporation/Partnership 
 Board resolution requesting for additional line of business 
 Certified true copy of the amended articles of incorporation 
Why we renew our business name, simple, if we want to continue the business and for it to be
legal, we should renew our business. The renewal of business name comes
on Online registration. 
 If the business name is renewed past the three (3) months period following the expiration
of the license, an additional PhP 100.00 surcharge will be added to the renewal fee. 
 If your business name expires, and you wish to continue using the name, you will be
required to re-register the name. 
Who can renew a business name 
 Only a current proprietor of the business name can sign the renewal statement. 
 If the proprietors have changed, it will be necessary for a 'Change of Particulars of
Registered Business Name' to be lodged prior to, or at the time of renewal. 
 What happens after submitting my application for renewal 
  On receipt of the renewal statement, relevant documents and the renewal fee, your
business name will be valid for five years. A new certificate will be given to you. 
General Requirements 
For Single Proprietorship: 
 BTRCP Form No. 16A BTRCP16A - Business Name Application for Sole
Proprietorships (Original and Renewal) [to be printed using Legal-sized bond paper (8.5" x
14")] 
 Original copy of Business Name Certificate 
 If original copy is lost, affidavit of loss of owner 
 Two copies of latest 2x2 ID pictures bearing applicant's signature at the back 
 Payment of Php300.00 
 Payment for documentary stamp of Php15.00 
For a Corporate Name Registered as a Business Name: 
 BTRCP Form No. 16B BTRCP16B- Business Name Application for Corporations,
Partnership and Other Juridical Entities (Original and Renewal) [to be printed using Legal-
sized bond paper (8.5" x 14")] 
 Original copy of Business Name Certificate 
 If original copy is lost, affidavit of loss of owner 
 Certified true/machine copy of the Securities and Exchange Commission (SEC)
Registration Certificate and Articles of Incorporation by SEC or Corporate Secretary in each of
the pages 
 If registering an adopted name, board resolution for the use and registration of an adopted
name 
 Board Resolution re appointment of the authorized signatory, if signatory is not one of
the incorporators 
 Payment of Php500.00 
 Payment for documentary stamp of Php15.00 
For Cooperatives: 
 BTRCP Form No. 16B BTRCP16B- Business Name Application for Corporations,
Partnership and Other Juridical Entities (Original and Renewal) [to be printed using Legal-
sized bond paper (8.5" x 14")] 
 Original copy of Business Name Certificate 
 Certified true copy of the Cooperative Development Authority (CDA) Certificate and
Articles of Cooperation by CDA or Board Secretary in each of the pages 
 If registering an adopted name, board resolution for the use and registration of an adopted
name 
 Board Resolution re appointment of the authorized signatory, if signatory is not one of
the board members 
 Payment of Php500.00 
 Payment for documentary stamp of Php15.00 
Failure to renew business name registration within six months after the expiration date would
mean an automatic cancellation of the business name from the database. In the old manual
scheme, change of business name information was done through DTI tellers. 
III. END LINE (Disclosing the Business) 
Requirements for Voluntary Cancellation 
Sole Proprietor 
  Submission of Other BN-Related Application Form prescribed in Annex D signed by the
registered BN owner; 
 Presentation of one (1) valid ID of the BN owner as listed in Annex A; 
 Submission of Other BN-Related Application Form prescribed in Annex D signed by the
registered BN owner; 
 Payment of fee prescribed in Annex E. 
 Submission of a declaration under oath that the cancellation is not intended to defraud
creditors and that he/she has no outstanding and pending financial obligation in connection
with his/her business or that he/she has notified all the creditors of such cancellation, as the
case may be; 
Corporation/Partners 
 Letter request signed by the authorized signatory 
 Certified photocopy of the SEC certificates of dissolution of the corporation/partnership 
 Original copy of the business name certificate of registration and the duplicate copy of
the application form. 
IV. ADDITIONAL (Franchising) 
Requirements for Franchising 
 Business address, email address, internet home page / website, fax numbers and other
Contact details. 
 Copy of the DTI or SEC Registration Cover page 
 Parent companies and affiliates, if any, and their respective description of their
qualifications and background, ownership of interest and references. 
 Declaration of the initial fee, amount that will be collected and services covering these
fees 
 Training that will be provided, number of persons, how long and training modules 
 Name of the Board Directors and officers with a brief description of their qualifications
and background, ownership of interest and references and background of Franchise Manager. 
 The contact number and business location of existing Franchisees 
 Executed promotional / marketing materials 
 Numbers of years Company has operated and number of years it has franchised and
number of years it has franchised with corresponding numbers of company owned branches
and franchised branches 
 Copy of Memorandum of Agreement and Franchise Agreement 
 Description of the business concept, which includes brand image, brand personality,
unique selling proposition, target market, mission and mission 
 Basic Information on training, commercial and / or technical assistance 
 Certificate that the Franchisor is a member in good standing of any Franchisor
Association and that the Franchisor has no pending administrative, civil or criminal case 
 Full disclosure of the financial requirements of the franchise business and expected P&L 
 A provision that requires the franchise applicant to seek adequate legal and financial
counsel before signing the Franchise Agreement 
 Mechanism for dispute resolution 
 Copy of the Trademark or Trademark application 
 
 
SECURITIES AND EXCHANGE 
 
COMMISSION (SEC) 
GROUP 2 (BSA 3A) 
 
 
A. OBJECTIVES 
REPORTER: Cristobal, Lealyn C. 
 
VISION 
By 2025, the SEC with its driven, highly trained and customer-centric team
of professionals, equipped with innovative technology and automated
registration and data management systems, is the premier investor
champion and catalyst of a broadened and informed investor-based capital
market and business sector considered among the best in the Southeast
Asian Region. 
 
MISSION 
We are the gateway to doing business in the Philippines. We provide a
competitive and secure environment for easy company registration, efficient
capital formation, and broad investor participation. 
 
To sum up this two, the SEC has its goal to; 
1. protect investors 
The SEC protects investors primarily by ensuring that companies are
transparent in their dealings. This is done by exchange-listed companies
giving full disclosure of financial information to the public.  
 
2. maintain fair, orderly, and efficient public securities markets 
The importance of this part of the SEC’s mandate is of great value to the
trading and exchange of securities. It strengthens the integrity of securities
markets, and without fail, penalizes organizations that infringe on the SEC
regulations.  
This commission maintains a fair and efficient marketplace to ensure strict
compliance with SEC regulations. 
 
3. facilitate the formation of capital 
By facilitating capital formation and the generation of new companies,
investors realize expanded opportunities to invest and create wealth, and
markets benefit from diverse companies. This consequently creates
Jobs and enables companies to progress in diverse sectors, thereby making
returns for those who invest in them.   
Getting access to funds is important for smaller businesses to thrive in the
competitive world of business today. 
  
VALUES 
 INTEGRITY - We are ethical, honest, fair, and sincere in our private and
public lives. 
 PROFESSIONALISM - We are capable and competent in performing our
mandate, we excel in our fields of expertise, and we possess high ethical
principles and standards which are essential in providing timely, quality, and
committed public service. 
 ACCOUNTABILITY - We are responsible for our actions and decisions. 
 TEAMWORK - We collaborate to achieve our common goals and tasks in
a seamless and efficient manner. 
 INDEPENDENCE - We act without fear or favor and render sound
judgment in the performance of our duties and responsibilities. 
 
B. ROLES, STRUCTURE AND AUTHORITIES 
REPORTER: Lealyn C. Cristobal 
 
ROLES 
The Securities and Exchange Commission (SEC) or the Commission is the
national government regulatory agency charged with supervision over the
corporate sector, the capital market participants, and the securities and
investment instruments market, and the protection of the investing public. 
Created on October 26, 1936, by Commonwealth Act (CA) 83 also known
as The Securities Act. SEC is the registrar and overseer of the Philippine
corporate sector; it supervises more than 600,000 active corporations and
evaluates the financial statements (FS) filed by all corporations registered with
it. SEC also develops and regulates the capital market, a crucial component of
the Philippine financial system and economy. As it carries out its
mandate, SEC contributes significantly to government revenues. 
 
Listed below are some of the main roles of SEC: 
 Supervision and control over all corporations, partnerships or
associations that are the grantees of primary franchise and/or a license or
permit issued by the government to operate in the Philippines. 
 The commission was tasked to regulate the sale and registration of the
securities, exchanges, brokers, dealers, and salesmen. 
 Protect the public and their investment. 
 The SEC has the authority to promulgate rules and regulations
reasonably necessary to enable it to perform its duties particularly in the
prevention of fraud and abuses on the part of the controlling stockholders,
members, directors, and trustees or officer of corporations. 
 SEC is mandated to register corporations, collect fees from registering
corporations, and prescribed reportorial requirements. 
  Commission’s role is to develop and regulate the corporate and capital
market toward good corporate governance, protection of investors, wildest
participation of ownership and democratization of wealth. 
 
STRUCTURE AND AUTHORITIES 
The Security and Exchange Commission (SEC) is structured into five semi-
autonomous divisions. These divisions are supervised by five commissioners
appointed by the president. However, there are a few rules to these divisions.  
 
They are: 
• Not more than three commissioners can belong to a single political party.
The law requires it to promote effective check and balances as well as
bipartisanship for each party.  
• One of the commissioners is designated as the chairman of the SEC by the
president. 
 
Each commissioner's term lasts five years, but they may serve for an
additional 18 months until a replacement is found. 
 
SECURITIES AND EXCHANGE COMMISSION (SEC): OFFICES 
 
 OFFICE OF THE COMMISSION SECRETARY - Maintains the official
records of En Banc, prepares the agenda and notices for En Banc meetings,
and develops Rules of Practice that guide the Commission, Departments,
Offices, staff and the public in the Commission’s processes and procedures. 
 OFFICE OF THE GENERAL COUNCEL - They are responsible for
providing legal advice, litigation, ensuring compliance, and overseeing large
business transactions and/or procurement. 
 OFFICE OF THE GENERAL ACCOUNTANT - Prepares opinions,
clarifications and reply to queries from the public that involve financial
reporting and audit issues. 
 EXTENSIVE OFFICES - Issues licenses to do business in the Philippines
to branch or representative offices of foreign and multinational companies
and monitors companies' compliance with reportorial requirements. 
 
SECURITIES AND EXCHANGE COMMISSION (SEC): DEPARTMENTS 
 
 MARKETS AND SECURITIES REGULATION DEPARTMENT  
THREE DIVISIONS 
1. Securities Registration Division - registers securities such as
equity securities, bonds, commercial papers, real investment trust and
other alternative investment products. 
2. Markets and Intermediaries Division - supervises securities
markets, market institutions (exchanges, alternative trading systems, and
over-the-counter markets), intermediaries and market professionals
 (brokers, dealers, government securities eligible dealers and brokers,
transfer agents, advisers, mutual fund distributors, etc)  
3. Investment Products and Services Division - Reviews proposed
rules of Self-Regulatory Organizations (SROs) and other market
participants, and proposed products and services in the market to ensure
their consistency with securities laws, regulations, policies, and global
best practices. 
 
 CORPORATE GOVERNANCE AND FINANCE DEPARTMENT - Monitors
Public Companies (PCs), Mutual Fund Companies (MFCs), Exchange Traded
Funds (ETFs), Financing Companies (FCs), Lending Companies (Les),
Issuers of Membership Certificates/Shares, Timeshares/Commercial Papers
and Foundations’ compliance with existing laws and regulations. It also
monitors covered companies’ compliance with the Revised Cod of Corporate
Governance (RCCG). 
 
 COMPANY REGISTRATION AND MONITORING DEPARTMENT
- Registers and licenses domestic and foreign corporations, partnerships,
associations, mergers and other corporate reorganizations and monitors
compliance of the said organizations with their reportorial responsibilities
under the Corporation Code and other existing laws. 
 
 ENFORCEMENT AND INVESTOR PROTECTION DEPARTMENT  
FOUR DIVISIONS 
1. Investigation and Prosecution Division (IPD) - investigate all
cases involving violations of the rules and regulation being implemented
by the Commission, prepare draft of Orders or Resolutions, and file
criminal complaint before the DOJ in case there are violations.  
2. Market Surveillance Division (MSD) - Conduct surveillance of the
trading of securities in the exchanges and ensure compliance of market
participants and intermediaries with Sections 24, 26 and 27 of the SRC
and its IRR, and coordinate with the Philippine Stock Exchange (PSE),
Philippine Dealing and Exchange Corporation (PDEx), Capital Markets
Integrity Corporation (CMIC) and capital market participants in gathering
evidence or obtaining information on market manipulation, insider
training and/or fraudulent transactions in connection with the purchase
or sale of securities.  
3. Special Operations Division - Conduct surveillance of the public
offering and exchanges of unregistered securities in all its forms including
commodities futures contracts done through the internet to determine
whether any person has violated or its about to violate any provisions of
the SRC, any rule, regulation, or order thereunder and coordinate with the
anti-cybercrime units of other law enforcement agencies in gathering
electronic evidence of violations of the SRC and other laws enforced by the
Commission done through the internet.  
 4. Anti-Money Laundering Division - Investigate all cases that
violates the rules and regulations of the Commission concerning Anti-
Money Laundering or Combating the Financing of Terrorism. 
 
 ECONOMIC RESEARCH AND TRAINING DEPARTMENT - Prepares
materials on policies plans, programs, and accomplishment of SEC for
reporting to government oversight agencies and it acts as the focal SEC
department in implementing infomercials and conducting education
programs for the external public. 
 
 INFORMATION AND COMMUNICATIONS TECHNOLOGY
DEPARTMENT - Updates the database entries relative to amendments to
the capital structure/contributed capital of SEC registered companies. It
also receives reports and other written communications (mails and walk-in)
and releases SEC documents, except applications processed and approved
by CRMD and maintains archives and manages electronic copies of
documents submitted by registered companies. 
 
 HUMAN RESOURCE AND ADMINISTRATIVE DEPARTMENT
- Implements Civil Service Commission law, rules, and regulations, in
matters of recruitment and selection, training and staff development,
scholarship grants, performance management, merit promotion, employee
welfare and administrative disciplinary actions. 
 
 FINANCIAL MANAGEMENT DEPARTMENT - Administers the financial
management and budget functions of the SEC. These activities include cash
management, accounting, fee collections, travel policy development, and
oversight and budget justification and execution. 
SECURITIES AND EXCHANGE COMMISSION (SEC): CHAIRPERSON AND
COMMISSIONERS 
 
SEC CHAIRPERSON 
 Emilio Benito Aquino is the first CPA-Lawyer appointed as Chairperson
and CEO of the Securities and Exchange Commission (SEC). He will serve
for a term of seven years. He assumed office last June 7, 2018. He was
earlier appointed as SEC Commissioner on December 2, 2016. 
 
SEC COMMISSIONERS 
 Ephyro Luis B. Amatong was appointed commissioner of the Securities
and Exchange Commission (SEC) by President Benigno S. Aquino III on April
23, 2014 and took his oath of office on May 13, 2014. 
 Javey Paul Durban Francisco is a career public servant who has been
with the SEC for the last 17 years. He was appointment as Commissioner by
President Rodrigo Roa Duterte on April 18, 2018, he was the SEC’s Director
for its Davao Extension Office, a position he has held since 2007.  
  Kelvin Lester K. Lee, a lawyer, was appointed Securities and Exchange
Commission (SEC) Commissioner by President Rodrigo Roa Duterte on 25
January 2019.  
 Karlo S. Bello is a lawyer with extensive experience in government
affairs and public policy. He is a newly appointed SEC commissioner last
August 27, 2021. 
 
C. KEY APPLICABLE LAWS 
REPORTER: Antonio, Celine Marie L. 
 
1. Revised Corporation Code (Republic Act No. 11232) 
 Act providing for the Revised Corporation Code of the Philippines, aimed
at improving ease of doing business in the country, affording more protection
to corporations and stockholders and promoting good corporate governance.  
 
Notable Amendments under the Code  
 One Person Corporation 
Under the New Code, a one person corporation (“OPC”) may now be
formed by a single stockholder, who may be a natural person, trust or an
estate. However, banks and quasi-banks, pre-need, trust, insurance,
public and publicly listed companies, and non-chartered government-
owned and controlled corporations may not incorporate as OPC.  
 Perpetual Existence 
Under the New Code, the default rule is that a corporation shall have
perpetual existence, unless otherwise specified in the Articles of
Incorporation.  
 
 Minimum Capital Stock 
The Old Code required that at least 25% of the authorized capital stock
must be subscribed, and at least 25% of the total subscription must be
paid by the stockholders, provided that the minimum paid-up capital
shall not be lower than Php5, 000.00 
The New Code removed the aforementioned 25% subscription, payment
and minimum paid-up capital requirements. The New Code states that
“stock corporations shall not be required to have a minimum capital
stock, except as otherwise specifically provided by special law 
 
 Incorporators, Directors, Trustees, and Officers  
The New Code removed the minimum number of
incorporators, directors and trustees, which stood as five (5) under the
Old Code. 
Section 10 of the New Code states that “any person, partnership,
association or corporation, singly or jointly with others but not more than
fifteen (15) in number, may organize a corporation for any lawful purpose
or purposes.” It appears that the New Code allows juridical persons to act
 as incorporators unlike the Old Code which limits incorporators to
natural persons. 
 
 Remote Communication and In-Absentia Voting 
Following the concept of allowing board meetings by way of
videoconferencing, teleconferencing, or other alternative modes of
communication which have been made explicit under the New Code, the
New Code took a step further by allowing stockholders or members to
exercise their right to vote through remote communication or in absentia
when authorized under the by-laws, subject to the rules and regulations
to be issued by the SEC.  
 
2. The Securities Regulation Code (Republic Act No. 8799)  
 An act that aims to regulate the issuance and trading of equity securities
and debt securities in the Philippines. 
 
 These securities typically come in the form of the following: 
 shares of stocks, bonds, debentures 
 investment contracts 
 options and warrants 
 
 
Requirements to Register Securities 
 3 copies of SEC Form 12-1 
 Duly signed and notarized statement of management responsibilities on
the audited financial statements 
 Consolidated/Audited/Interim Financial Statements (if applicable) 
 Additional components of the Audited Financial Statements 
 Material Contracts 
 Exhibits 
 Payment Assessment Form (PAF) 
 
3. Ease of Doing Business Act (Republic Act No. 11032)  
 An act that aims to make it easier for businesses to start operating in the
country. The most important measure that the ease of doing business law
introduces is the automation of the business registration process.  
 
Key Features Introduced by the EODB Law 
 Faster Processing of Business Permits and Licenses 
The EODB Law seeks to cut the red tape involved in business registration
and permit renewals 
 Standard Turnaround Time for Government Transactions 
All government agencies have to comply with standard turnaround times
for various transactions. These mandated timeframes range from 3 to 20
business days, depending on the complexity of the task.  All applications
 duly submitted to an agency will be automatically approved if they fail to
process the application within the prescribed time frame. 
 Automated Business Registration Process 
All forms will be moved online, and digital copies of documents will be
submitted electronically. Likewise, licenses and permits can now be
printed at home, and this copy shall have the same authority as a hard
copy.  
 Anti-Corruption Policy 
All government units engaged in the issuance of business permits and
licenses will implement a zero-contact policy between government
employees and business applicants. This is sought to improve the
government agencies’ level of service delivery and accountability. 
After the filing of the application, government functionaries will
anonymously transact with applicants, with only a case number to identify
them with. 
 
 Accountability of Heads of Offices and Agencies 
The EODB Law prescribes administrative and criminal liability to the
officials and employees who may act inappropriately. Some of the
violations include: 
1. Refusal to accept and process an application 
2. Imposition of requirements or fees not listed in the Citizen’s
Charter 
3. Collusion with fixers 
4. Missed deadlines 
 
4. Anti- Money Laundering Act (Republic Act No. 9160)  
 The AMLA investigates money laundering and other financial crimes to
protect financial institutions and deter criminals from making the Philippines
a money laundering site for criminal proceeds. 
 
Covered Persons 
 banks, non-banks, quasi-banks, trust entities, pawnshops, money
changers, remittance and transfer companies and other similar entities
regulated by the Bangko Sentral ng Pilipinas (BSP) 
 insurance companies, pre-need companies and all other persons
supervised or regulated by the Insurance Commission  
 securities dealers, brokers, salesmen, investment houses and other
similar persons managing securities regulated by the Securities and
Exchange Commission (SEC) 
 jewelry dealers in precious metals, who, as a business, trade in precious
metals 
 real estate developer, real estate broker and offshore gaming operator 
 
Covered Transactions 
  a transaction in cash or other equivalent monetary instrument involving
a total amount in excess of Five hundred thousand pesos (P500,000.00)
within one (1) banking day for covered persons 
 A transaction with or involving jewelry dealers, dealers in precious
metals and dealers in precious stones in cash or other equivalent
monetary instrument exceeding One Million pesos (Php1,000,000.00). 
 A casino cash transaction exceeding Five Million Pesos (PHP5,
000,000.00) or its equivalent in other currency.  
 A cash transaction with or involving real estate developers or brokers
exceeding Seven Million Five Hundred Thousand Pesos (P7, 500,000.00) or
its equivalent in any other currency. 
 
5. Microfinance Nongovernment Organizations Act (Republic Act No.
10693) 
 Under this act, aspiring small entrepreneurs who do not have access to
financial products and services can team up with accredited microfinance
nongovernment organizations (NGOs) that will provide them with
convenient, flexible and low-interest credit 
  
6. Credit Information System Act (Republic Act No. 9510)  
 An act that created the Credit Information Corporation, the primary
purpose of which is to receive and consolidate basic credit data, and to
provide access to reliable, standardized information on credit history and
financial condition of borrowers  
  
7. Civil Code of the Philippines  
 Unlike corporations whose governing law is a special law - the
Corporation Code of the Philippines, partnerships in the Philippines are
governed by and covered under Articles 1767 to 1867 of the Civil Code of the
Philippines. These are the provisions of law which govern all aspects of
partnerships - from their creation, formation, existence, operation and
management to their dissolution and liquidation, including the obligations of
the partners to one another, to the public or third persons and to the
government. 
 Partnerships are required to be registered with the Securities and
Exchange Commission [SEC].  Registration is done by filing the Articles of
Partnership with the SEC.  The Articles of Partnership set forth all the terms
and conditions mutually agreed by the partners thereto. 
 
8. Foreign Investment Act (Republic Act No. 7042) 
 to attract, promote and welcome productive investments from foreign
individuals, partnerships, corporations, and governments in activities which
significantly contribute to national industrialization and socioeconomic
development 
  As a general rule, there are no restrictions on extent of foreign ownership
of export enterprises. In domestic market enterprises, foreigners can invest as
much as one hundred percent (100%) equity except in areas included in
the negative list.  
 
The Philippines Foreign Investment Negative List is an Executive Order
that regulates where foreign entities are not allowed to invest. This
regulation tells you the business fields that are fully and partially open to
foreign investment in the Philippines. 
 
9. Anti- Dummy Law (Commonwealth Act No. 108) 
 seeks to penalize persons and corporations which circumvent these
foreign equity restrictions. The offender can be: (i) any citizen of the
Philippines, or (ii) any citizen of any other specific country. The proscribed
offense includes the act of using the “name” or “citizenship” of a Filipino
citizen to be used for the purpose of evading the foreign ownership
limitations. 
 
 One example of a violation of the Anti-Dummy Law is the designation of
a foreigner as a beneficial owner and of a Filipino citizen as a legal owner in
an enterprise engaged in nationalized or partially nationalized economic
activities. Under this nominee shareholder structure, the Filipino acts as a
nominee shareholder while the foreigner acts as the real or actual owner
hiding behind the former’s name. Corporate votes in stockholder resolutions
and board meetings are exercised by the Filipino nominee shareholder, but
the votes are in fact dictated by the foreign beneficial owner. Dividends are
issued in the name of the Filipino nominee shareholder, but are subsequently
transferred to the foreign beneficial owner. 
 
D. KEY REGULATORY REQUIREMENTS AND 
PENALTIES OF NON-COMPLIANCE 
REPORTER: Del Rosario, Jameine S. 
 
Key Concepts/ Topics 
1. Registration Process for Businesses Required to Register with SEC 
2. Revised Corporation Code of the Philippines 
3. Crimes Under the New Law and their Penalties 
4. 2015 Implementing Rules and Regulation of the Securities Regulation
Code (Republic Act No. 8799) 
5. SEC Memorandum Circular no.2 series of 2003 Revised Scale of Fines 
 
Registration Process for Businesses Required to Register with SEC 
 
SEC Registration in the Philippines 
 
Provided under Section 3 of Presidential Decree No. 902-A, the SEC has
absolute jurisdiction, supervision, and control over all corporations,
partnerships, and associations that are grantees of primary franchises and
licenses or permits issued by the government. 
 
SEC Registration Requirements 
 
1. Secure a unique business name (you can reserve your business name
through SEC’s online services portal – the SEC i-
View https://ireport.sec.gov.ph/iview/index.html   
2. Accomplish an Application Form from SEC   
3. Draft the necessary documents required for the specific business entity
you plan to register, which are as follows: 
 Articles of Incorporation and By-laws 
 Treasurer’s Affidavit 
4. Deposit the minimum paid-up capital requirement 
5. Obtain necessary licenses or permits from appropriate government
agencies (for regulated industry sectors and business activities) 
 
Revised Corporation Code of the Philippines 
 
On February 23, 2019, Republic Act No. 11232 or the Revised Corporation
Code became effective, replacing Batas Pambansa Blg. 68. The law introduces
fresh and progressive concepts aimed at improving the ease of doing business
in the country, promoting good corporate governance and afford protection to
corporations, investors and consumers alike, amid a fast-evolving business
landscape. Here are some of the key provisions of the new Code: 
1. Perpetual Term 
Section 115 provides that corporations are now allowed to exist beyond the
50-year term provided in the old code. This will eliminate the possibility of
legitimate and productive business prematurely closing down only because
they have failed to renew their registration.  
2. One Person Corporation  
The RCC removed the minimum number of incorporators required to
organize a corporation and allowed the formation of one person corporation, a
corporation with a single stockholder and without a minimum authorized
capital stock required. 
3. No Minimum Capital Stock  
Start your business with as little capital or funding possible. Section 12
provides that Corporations shall not be required to have a minimum capital
stock, except as otherwise specifically provided by special law.  
4. Participation Via remote Communications, In Absentia  
Be involved in the decision-making process whenever and wherever you are.
The RCC has allowed the use of remote communication such as video
 conferencing and teleconferencing during stockholder meetings. Stockholder
may also participate and vote in absentia.  
5. Emergency Board  
Be more decisive in times of emergency. Amendment also includes the
provision of an emergency board when a vacancy in a corporation’s board of
directors prevents the remaining directors from consulting a quorum and
consequently from making emergency action required to prevent
grave, substantial and irreparable loss or damage. 
6. Electronic Filing and Monitoring System 
Register, apply or file online. As part of efforts of doing business in the
country, the Revised Corporation Code mandated the Commission to develop
and implement an electronic filing and monitoring system. So far, the
Commission has implemented an online company registration system.  
 
FREQUENTLY ASKED QUESTIONS ABOUT OPC 
 How to craft the OPC’s corporate name? 
The suffix “OPC” should be indicated by the one person corporation either
below or at the end of its corporate name. 
 What requirement should be filed? 
The OPC shall file its Articles of Incorporation (AI) in accordance with the
requirements of Section 14 of the Revised Corporation Code of the Philippines. 
 What will happen in case of incapacity of single stakeholder? 
The nominee can take over the management of the OPC as director and
president.  At the end of the incapacity, the single stockholder can resume the
management of the OPC.  
 
CRIMES UNDER THE NEW LAW AND THEIR PENALTIES 
 
 Unauthorized Use of Corporate Name 
 
The unauthorized use of a corporate name shall be punished with a fine
ranging from Ten thousand pesos (P10,000.00) to Two hundred thousand
pesos (P200,000.00). 
 
 Violation of Disqualification Provision 
 
When, despite the knowledge of the existence of a ground for disqualification
as provided in the Revised corporation code, a director, trustee or officer
willfully holds office, or willfully conceals such disqualification, such director,
trustee or officer shall be punished with a fine ranging from Ten thousand
pesos (P10,000.00) to Two hundred thousand pesos (P200,000.00) at the
discretion of the court, and shall be permanently disqualified from being a
director, trustee or officer of any corporation. 
 
 When the violation of this provision is injurious or detrimental to the public,
the penalty shall be a fine ranging from Twenty thousand pesos (P20,000.00) to
Four hundred thousand pesos (P400,000.00). 
 
 Willful Certification of Incomplete, Inaccurate, False, or Misleading
Statements or Reports 
 
Any person who willfully certifies a report required under the Revised
corporation code, knowing that the same contains incomplete, inaccurate,
false, or misleading information or statements, shall be punished with a fine
ranging from Twenty thousand pesos (P20,000.00) to Two hundred thousand
pesos (P200,000.00). 
 
When the wrongful certification is injurious or detrimental to the public, the
auditor or the responsible person may also be punished with a fine ranging
from Forty thousand pesos (P40,000.00) to Four hundred thousand pesos
(P400,000.00). 
 
 Independent Auditor Collusion 
 
An independent auditor who, in collusion with the corporation’s directors or
representatives, certifies the corporation’s financial statements despite its
incompleteness or inaccuracy, its failure to give a fair and accurate
presentation of the corporation’s condition, or despite containing false or
misleading statements, shall be punished with a fine ranging from Eighty
thousand pesos (P80,000.00) to Five hundred thousand pesos (P500,000.00). 
 
When the statement or report certified is fraudulent, or has the effect of
causing injury to the general public, the auditor or responsible officer may be
punished with a fine ranging from One hundred thousand pesos (P100,000.00)
to Six hundred thousand pesos (P600,000.00). 
 
 Fraudulent Conduct of Business 
 
A corporation that conducts its business through fraud shall be punished
with a fine ranging from Two hundred thousand pesos (P200,000.00) to Two
million pesos (P2,000,000.00). 
 
When the violation of this provision is injurious or detrimental to the public,
the penalty is a fine ranging from Four hundred thousand pesos (P400,000.00)
to Five million pesos (P5,000,000.00). 
 
 Obtaining Corporate Registration Through Fraud 
 
 Those responsible for the formation of a corporation through fraud, or who
assisted directly or indirectly therein, shall be punished with a fine ranging
from Two hundred thousand pesos (P200,000.00) to Two million pesos
(P2,000,000.00). 
 
When the violation of this provision is injurious or detrimental to the public,
the penalty is a fine ranging from Four hundred thousand pesos (P400,000.00)
to Five million pesos (P5,000,000.00). 
 
 Acting as Intermediaries for Graft and Corrupt Practices 
 
A corporation used for fraud, or for committing or concealing graft and
corrupt practices as defined under pertinent statutes, shall be liable for a fine
ranging from One hundred thousand pesos (P100,000.00) to Five million pesos
(P5,000,000.00). 
 
When there is a finding that any of its directors, officers, employees, agents,
or representatives are engaged in graft and corrupt practices, the corporation’s
failure to install: 
(a) safeguards for the transparent and lawful delivery of services; and 
(b) policies, code of ethics, and procedures against graft and corruption shall
be prima facie evidence of corporate liability. 
 
 Engaging Intermediaries for Graft and Corrupt Practices 
 
A corporation that appoints an intermediary who engages in graft and corrupt
practices for the corporation’s benefit or interest shall be punished with a fine
ranging from One hundred thousand pesos (P100,000.00) to One million pesos
(P1,000,000.00). 
 
 Tolerating Graft and Corrupt Practices 
 
A director, trustee, or officer who knowingly fails to sanction, report, or file
the appropriate action with proper agencies, allows or tolerates the graft and
corrupt practices or fraudulent acts committed by a corporation’s directors,
trustees, officers, or employees shall be punished with a fine ranging from Five
hundred thousand pesos (P500,000.00) to One million pesos (P1,000,000.00). 
 
 Retaliation Against Whistleblowers 
 
A whistleblower refers to any person who provides truthful information
relating to the commission or possible commission of any offense or violation
under the Revised corporation code. 
 
 Any person who, knowingly and with intent to retaliate, commits acts
detrimental to a whistleblower such as interfering with the lawful employment
or livelihood of the whistleblower, shall, at the discretion of the court, be
punished with a fine ranging from One hundred thousand pesos (P100,000.00)
to One million pesos (P1,000,000.00). 
 
2015 Implementing Rules and Regulation of the Securities Regulation
Code (Republic Act No. 8799) 
 
Section 1. Title. - This shall be known as "The Securities Regulation Code" 
 
Section 2. Declaration of State Policy. – The State shall establish a socially
conscious, free market that regulates itself, encourage the widest participation
of ownership in enterprises, enhance the democratization of wealth, promote
the development of the capital market, protect investors, ensure full and fair
disclosure about securities, minimize if not totally eliminate insider trading
and other fraudulent or manipulative devices and practices which create
distortions in the free market. To achieve these ends, this Securities Regulation
Code is hereby enacted. 
 
Under chapter III Registration of Securities 
 
Section 8. Requirement of Registration of Securities. – 8.1. Securities shall
not be sold or offered for sale or distribution within the Philippines, without a
registration statement duly filed with and approved by the Commission. Prior
to such sale, information on the securities, in such form and with such
substance as the Commission may prescribe, shall be made available to each
prospective purchaser. 
 
8.2. The Commission may conditionally approve the registration statement
under such terms as it may deem necessary. 
 
8.3. The Commission may specify the terms and conditions under which any
written communication, including any summary prospectus, shall be deemed
not to constitute an offer for sale under this Section. 
 
8.4. A record of the registration of securities shall be kept in Register
Securities in which shall be recorded orders entered by the Commission with
respect such securities. Such register and all documents or information with
the respect to the securities registered therein shall be open to public
inspection at reasonable hours on business days. 
 
8.5. The Commission may audit the financial statements, assets and other
information of firm applying for registration of its securities whenever it deems
the same necessary to ensure full disclosure or to protect the interest of the
investors and the public in general. 
 
SEC Memorandum Circular no.2 series of 2003 Revised Scale of Fines 
 
 
Violations  
Offering of securities to the public without prior registration or permit 
 
 
Prohibited offers to exchange securities 
 
 
Unauthorized or illegal activities of investment companies 
 
Violation of registration requirements 
 
 
 
 
 
 
 
Penalty for Violation (minimum) 
P10,000per transaction or 1/10 of 1% of the aggregate issuance, whichever is
higher. 
 
10,000 per transaction or 1/10 of 1% of the aggregate issuance, whichever is
higher. 
 
P 50,000 or 0.5/10 of 1% of Consolidated Net Income / Revenue, whichever is
higher. 
 
P10,000 per violation or 1/10 of 1% of the aggregate issuance, whichever is
higher 
 
 LGU OBJECTIVES 
 Reduce crime incidents and improve crime solution efficiency 
 Improve jail management and penology services 
 Improve fire protection services 
 Continue professionalization of PNP, BFP and BJMP personnel and services 
 Enhance LGU capacities to improve their performance and enable them to effectively and
efficiently deliver services to their constituents 
 Continue to initiate policy reforms in support of local autonomy 
 
1. Reduce crime incidents and improve crime solution efficiency 
 How bad is the crime in the Philippines? The Philippines has a moderately high rate of violent
crime, particularly in the capital city of Manila. Incidents of violent robbery and assault occur
frequently. 
The Philippines government has long been unsuccessful at solving crimes; it is also one of the
major problems in the society. Also, crimes have extremely affected the country’s economic
growth (News Junkie, 2013). According to Sison (2014), crimes are committed due to extreme
hunger and for purely economic reasons such as lack of education, unemployment and population
growth because of this reasons,  people are forcing to do crimes such as pickpockets and
snatching. Crimes are committed in areas where the urban poor live. Additionally, the corruption
of the politicians also added in blocking the social and economic development. However, in the
last years, people actively witnessed the stealing of the politicians. As the effect, Filipinos end up
paying overpriced goods, low maintenance of the services and low quality of the infrastructure. 
 
2.  Improve jail management and penology services 
What is the situation of correctional facilities in the Philippines? As of 2019, the Philippines'
population rested at 108.31 million people, and 215,000 of those people were
incarcerated. Therefore, the Philippines has an incarceration rate of about 200 per 100,000
citizens. There are 933 prisons running in the Philippines. Unfortunately, they are mismanaged
and overcrowded 
 
3. Improve fire protection services 
What is the situation of correctional facilities in the Philippines? The Bureau of Fire Protection
(BFP), the primary agency responsible for fire prevention and fighting fire, is one of the most
undermanned government agencies created for the gargantuan task of preventing fire, if not
fighting fires when they do happen. THE BFP is doubly short. 
It is short of firefighters, with the ideal ratio of 1 firefighter per 2,000 people or population. The
BFP is also short of all-important fire trucks and other firefighting equipment. 
With its current population running up to 100 million, the Philippines needs at least 50,000
personnel doing actual firefighting on the field. Hence, the actual number of firefighters is short
by more than 100 percent. 
 
4. Continue professionalization of PNP, BFP and BJMP personnel and services 
Republic Act No. 9263 This Act shall be known as the "Bureau of Fire Protection and Bureau of
Jail Management and Penology Professionalization Act of 2004." 
It is declared policy of the state to maintain peace and order, protect life, liberty and property,
and promote the general welfare essential for the enjoyment by all the people of the blessings
of democracy (Article II, Section 5 of the Philippine Constitution) Moreover it recognizes the
responsibility of the state to strengthen government capability aimed towards the strengthening
of the delivery of basic services to the citizenry though the institutionalization of highly efficient
and competent fire and jail services. 
 
5. Enhance LGU capacities to improve their performance and enable them to effectively and efficiently
deliver services to their constituents 
Improving Local Government 
1. Budgeting. Budgeting is one of the most important things local government does. Budgeting
involves allocating limited financial resources to support the delivery of key public services — from
public safety, roads, and public transit to parks and libraries. A local government’s annual operating
 budget reflects its vision, strategies, and priorities for the future and determines which projects and
services will actually be implemented each year. 
2. Local Legislation & Policymaking. Legislative bodies at the local level, such as county boards of
supervisors and municipal city councils, pass laws and policies on a wide range of issues. In addition to
budgeting decisions, local legislative bodies make decisions that affect the quality, affordability, and
accessibility of public transportation, housing, parks and open space, waste management services, and
water and energy utilities. In short, local legislation has a huge influence on who has access to the
social and economic conditions that create health. 
3. Planning. Another core function of local governments is to help plan for the future growth of a
community. State laws usually stipulate how often localities must update their comprehensive plans or
master plans, and the laws often require some level of public participation in the planning process.
Plans include policies, strategies, and actions to meet a locality’s future goals for their community,
touching on a wide range of issues like housing, transportation, land use, economic and community
development, parks and open space, environmental quality, and public safety. Community
engagement efforts provide key information to help understand needs and concerns and, ultimately,
to gather support for proposed projects. 
4. Voting & Elections. One of the most fundamental ways that residents influence local
government is by voting. When more people exercise their power as voters, they can elect local
leaders whose values are aligned with their interests and hold leaders accountable to everyone they
serve. MAGREHISTRO NA.  
 
 

 
6. Continue to initiate policy reforms in support of local autonomy 
Policy reform, as we see it, encompasses two main thrusts: 
a.) changes in laws, decrees, regulations, i.e. the enabling framework 
b)  improving the institutional capacity of development partners to implement the enabling
framework effectively. 
 
 LOCAL GOVERNMENT UNITS – KEY APPLICABLE LAWS 
By: Kimberly C. Arellano – BSA 3A 
 
 The Local Government Code of 1991 (LGC) 
 Article X of 1987 Philippine Constitution 
 
HISTORY OF FISCAL DECENTRALIZATION 
 REPUBLIC ACT NO. 2264 - LOCAL AUTONOMY ACT OF 1959  
 An act amending the laws governing local governments by increasing their autonomy and
reorganizing provincial governments. 
 REPUBLIC ACT NO. 5185 - DECENTRALIZATION ACT OF 1967  
 An act granting further autonomous powers to local governments 
 1973 CONSTITUTION 
 ARTICLE XI - Local Government (5 sections) 
 BATAS PAMBANSA 337 OF 1983  
 PRESIDENTIAL DECREES DURING THE MARTIAL LAW  
 1987 CONSTITUTION  
 ARTICLE X - Local Government (21 sections) 
 REPUBLIC ACT NO. 7160 - LOCAL GOVERNMENT CODE OF 1991  
 Aquilino Martin “Koko” Pimentel III - acknowledged as Father of Local
Autonomy and principal author of the Code. 
 Signed into law by the President Corazon Aquino on October 10,1991. The Code took
effect on January 1, 1992. 
 It was written in English. It has since been translated into the different local languages of
the country to make it accessible and understandable to ordinary citizens.  
 The Code does not apply in the Autonomous Region of Muslim Mindanao (ARMM).
Being an Autonomous Region, it has its own local government code. 
 The Code, which replaced Batas Pambansa Bilang 337 of former president Ferdinand
Marcos, is divided into 4 parts: 
o Book I - Basic principles 
o Book II - Local taxation and fiscal matters 
o Book III - LGU creation, organization, and powers 
o Book IV - Transitory, penal, and and implementation provisions of the Code. 
 Department of the Interior and Local Government (DILG)  - is responsible for the
implementation, monitoring, and evaluation of the Code.  
 
Provinces, cities, and municipalities are directly headed by a local chief executive (Governor
for provinces, and Mayor for cities and municipalities) and Barangays are headed by a
Chairman. 
 
 
 President’s general supervision over LGUs 
 Section 25. National Supervision over Local Government Units 
President shall exercise general supervision over local government units to ensure that
their acts are within the scope of their prescribed powers and functions. 
The President shall exercise supervisory authority directly over provinces, highly
urbanized cities, and independent component cities; through the province with respect to
component cities and municipalities; and through the city and municipality with respect to
barangays. 
 
 Internal Revenue Allotment (depends on the class and income remittance) 
 Section 284. Allotment of Internal Revenue Taxes. 
Local government units shall have a share in the national internal revenue taxes based on
the collection of the third fiscal year preceding the current fiscal year as follows: 
(a) On the first year of the effectivity of this Code, thirty percent (30%); 
(b) On the second year, thirty-five percent (35%); and 
(c) On the third year and thereafter, forty percent (40%). 
 
 Seven (7) areas of concern 
 Local legislation 
 Local fiscal administration 
 Local development plan 
 Economic enterprise development 
 Organizational management 
  Environmental protection and management 
 Community mobilization 
 
 Relevant Constitutional Provisions 
 SECTION 2. Declaration of Policy. 
The territorial and political subdivisions shall enjoy local autonomy. But this “autonomy”
does not mean full freedom from control 
 SECTION 16. General Welfare 
Local government units shall ensure and support, among other things, the preservation
and enrichment of culture, promote health and safety, enhance the right of the people to a
balanced ecology, encourage and support the development of appropriate and self-reliant
scientific and technological capabilities, improve public morals, enhance economic prosperity
and social justice, promote full employment among their residents, maintain peace and order,
and preserve the comfort and convenience of their inhabitants. 
 Section 17. Basic Services and Facilities 
National agencies or offices concerned shall devolve to local government units the
responsibility for the provision of basic services and facilities 
 
Devolution - refers to the act by which the national government confers power and authority
upon the various local government units to perform specific functions and responsibilities. 
 
 Devolved basic services (section 17) 
 Agriculture 
 Health 
 Social services 
 Environment and natural resources 
 Public works 
 Tourism 
 School building programs 
 
 Regulatory powers 
1. Eminent domain 
 Section 19. Eminent Domain 
2. Open and close roads 
 Section 21. Closure and Opening of Roads. 
3. Reclassify agricultural lands 
 Section 20. Reclassification of Lands.  
4. Inspection of food products 
5. Adopt quarantine regulations 
6. Enforcement of the National Building Code 
7. Regulation of operation of tricycles 
8. Regulate real estate trade and business 
9. Licensing of cockpits and regulation thereof 
 
 Corporate Powers 
 Section 22. Corporate Powers. 
 (a) Every local government unit, as a corporation, shall have the following powers: 
(1) To have continuous succession in its corporate name; 
(2) To sue and be sued; 
(3) To have and use a corporate seal; 
(4) To acquire and convey real or personal property; 
(5) To enter into contracts; and 
(6) To exercise such other powers as are granted to corporations, subject to the limitations
provided in this Code and other laws. 
 
 LGU Creation criteria 
 Section 7. Creation and Conversion.  
 (a) Income 
LGU  Income requirement
(annual income) 
Province or city  At least 20 million* 
Municipality
converted into aAt least 200 million 
city 
Municipality  2.5 million 
Barangay  No specific income
requirement 
          *for the immediately preceding 2 consecutive years based on 1991 constant prices 
 
(b) Population 
LGU  Population requirement 
Province or city  Not less than 250,000
inhabitants 
Municipality   Not less than 150,000 
At least 2,000 (But if
within cities and
Barangay  municipalities in Metro
Manila or HUCs – at least
5,000 inhabitants) 
 
 
 
 
 
 
 
(c) Land Area 
LGU  Land area requirement
(square kilometers) 
Province  2,000 
City  100 
Municipality  50 
 Must be contiguous;
identified by metes and
Barangay  bounds or by more or less
permanent natural
boundaries 
 
 
 
 
Compliance with the foregoing indicators shall be attested to by the Department of
Finance (DOF), the National Statistics Office (NSO), and the Lands Management Bureau
(LMB) of the Department of Environment and Natural Resources (DENR). 
 
 Branches/Composition 
Executive Branch – composed of Provincial Governor, City and Municipal mayors, and
Punong Barangays called local chief executives (LCEs), they exercise executive powers 
Legislative Branch – serves as lawmaking and consultative body:
Sangguniang Panlalawigan (Province), Sangguniang Panglungsod (City), Sangguniang
Bayan (Municipality); and Sannguniang Pangbarangay (Section 48, LGC) 
  
 Sanggunian composition 
 Section 48. Local Legislative Power.  
  Local legislative power shall be exercised by the sangguniang panlalawigan for the
province; the sangguniang panlungsod for the city; the sangguniang bayan for the
municipality; and the sangguniang barangay for the barangay. 
 Section 49. Presiding Officer.  
The vice-governor shall be the presiding officer of the sangguniang panlalawigan; the city
vice-mayor, of the sangguniang panlungsod; the municipal vice-mayor, of
the sangguniang bayan; and the punong barangay, of the sangguniang barangay. The
presiding officer shall vote only to break a tie. 
In the event of the inability of the regular presiding officer to preside at
a sanggunian session, the members present and constituting a quorum shall elect from among
themselves a temporary presiding officer. He shall certify within ten (10) days from the
passage of ordinances enacted and resolutions adopted by the sanggunian in the session over
which he temporarily presided. 
  
 Powers of the Local Chief Executives (LCEs) 
 Execute laws and ordinances 
 Appointing authority 
 Supervisory authority 
 Issue Executive orders 
 Police power 
 Visitorial power 
 Issuance of permit 
 Mayors can solemnize marriage 
  
  Powers of Sanggunian 
 Approve ordinance and pass resolutions 
 Generate and maximize the use of resources and revenues 
 Enact ordinances, levying taxes, charges and fees 
 Grant tax exemption 
  
 Officials common to all Barangays 
 Punong Barangay 
 7 Sanggunian Members 
 Sangguniang Kabataan Chairman 
 Barangay Secretary 
 Barangay Treasurer 
  
 Elective Officials common to all Provinces 
 Governor 
 Vice Governor 
 Sangguniang Panlalawigan 
o Presiding Officer 
o Regular member 
o President of Liga ng mga Barangay 
o President of SK Federation 
o President of Federation of Sanggunian Members 
o 3 sectoral representatives 
  
 Approval of ordinances (section 54) 
 Section 54. Approval of Ordinances. – 
The veto shall be communicated by the local chief executive concerned to
the sanggunian within fifteen (15) days in the case of a province, and ten (10) days in the case
of a city or a municipality; otherwise, the ordinance shall be deemed approved as if he had
signed it. 
  
 
 Veto power of LCEs 
 Section 55. Veto Power of the Local Chief Executive. – 
The local chief executive may veto any ordinance of
the sanggunian panlalawigan, sangguniang panlungsod, or sanggunian bayan on the ground
that it is ultra vires or prejudicial to the public welfare, stating his reasons therefor in writing. 
The local chief executive, except the punong barangay, shall have the power to veto any
particular item or items of an appropriations ordinance, an ordinance or resolution adopting a
local development plan and public investment program, or an ordinance directing the
payment of money or creating liability.  
The local chief executive may veto an ordinance or resolution only once. . 
  
 Resignation of elective officials 
 Section 82. Resignation of Elective Local Officials.  
 Resignations by elective local officials shall be deemed effective only upon acceptance by
the following authorities: 
(1) The President, in the case of governors, vice-governors, and mayors and vice-mayors
of highly urbanized cities and independent component cities; 
(2) The governor, in the case of municipal mayors, municipal vice-mayors, city mayors
and city vice-mayors of component cities; 
(3) The sanggunian concerned, in the case of sanggunian members; and 
(4) The city or municipal mayor, in the case of barangay officials. 
The resignation shall be deemed accepted if not acted upon by the authority concerned
within fifteen (15) days from receipt thereof. 
  
 Annual Report 
 Section 97. Annual Report.  
On or before March 31 of each year, every local chief executive shall submit an annual
report to the sanggunian concerned on the socio-economic, political and peace and order
conditions, and other matters concerning the local government unit, which shall cover the
immediately preceding calendar year.  
 
 
 LOCAL FISCAL ADMINISTRATION AND TAXATION 
Section 305. Fundamental Principles. – The financial affairs, transactions, and operations of
local government units shall be governed by the following fundamental principles: 
(a) No money shall be paid out of the local treasury except in pursuance of an appropriations
ordinance or law; 
(b) Local government funds and monies shall be spent solely for public purposes; 
(c) Local revenue is generated only from sources expressly authorized by law or ordinance, and
collection thereof shall at all times be acknowledged properly; 
(d) All monies officially received by a local government officer in any capacity or on any
occasion shall be accounted for as local funds, unless otherwise provided by law; 
(e) Trust funds in the local treasury shall not be paid out except in fulfillment of the purpose for
which the trust was created or the funds received; 
(f) Every officer of the local government unit whose duties permit or require the possession or
custody of local funds shall be properly bonded, and such officer shall be accountable and
responsible for said funds and for the safekeeping thereof in conformity with the provisions of
law; 
(g) Local governments shall formulate sound financial plans, and local budgets shall be based on
functions, activities, and projects, in terms of expected results; 
(h) Local budget plans and goals shall, as far as practicable, be harmonized with national
development plans, goals, and strategies in order to optimize the utilization of resources and to
avoid duplication in the use of fiscal and physical resources; 
(i) Local budgets shall operationalize approved local development plans; 
(j) Local government units shall ensure that their respective budgets incorporate the requirements
of their component units and provide for equitable allocation of resources among these
component units; 
(k) National planning shall be based on local planning to ensure that the needs and aspirations of
the people as articulated by the local government units in their respective local development
plans are considered in the formulation of budgets of national line agencies or offices; 
(l) Fiscal responsibility shall be shared by all those exercising authority over the financial affairs,
transactions, and operations of the local government units; and 
(m) The local government unit shall endeavor to have a balanced budget in each fiscal year of
operation. 
  
Resource generation and allocation 
Sources 
Local 
Taxes 
  
Section 134. Scope of Taxing Powers. – Except as otherwise provided in this Code, the
province may levy only the taxes, fees, and charges as provided in this Article. 
  
  
Real Property Tax 
Section 197. Scope. – This Title shall govern the administration, appraisal, assessment, levy and
collection of real property tax. 
  
External 
IRA 
Section 284. Allotment of Internal Revenue Taxes. – Local government units shall have a
share in the national internal revenue taxes based on the collection of the third fiscal year
preceding the current fiscal year as follows: 
(a) On the first year of the effectivity of this Code, thirty percent (30%); 
(b) On the second year, thirty-five percent (35%); and 
(c) On the third year and thereafter, forty percent (40%). 
Provided, That in the event that the national government incurs an unmanageable public sector
deficit, the President of the Philippines is hereby authorized, upon the recommendation of
Secretary of Finance, Secretary of Interior and Local Government and Secretary of Budget and
Management, and subject to consultation with the presiding officers of both Houses of Congress
and the presidents of the “liga”, to make the necessary adjustments in the internal revenue
allotment of local government units but in no case shall the allotment be less than thirty percent
(30%) of the collection of national internal revenue taxes of the third fiscal year preceding the
current fiscal year: Provided, further, That in the first year of the effectivity of this Code, the
local government units shall, in addition to the thirty percent (30%) internal revenue allotment
which shall include the cost of devolved functions for essential public services, be entitled to
receive the amount equivalent to the cost of devolved personal services. 
  
National Wealth 
Section 289. Share in the Proceeds from the Development and Utilization of the National
Wealth. – Local government units shall have an equitable share in the proceeds derived from the
utilization and development of the national wealth within their respective areas, including
sharing the same with the inhabitants by way of direct benefits. 
  
Allocation to Local Government 
Section 285. Allocation to Local Government Units. – The share of local government units in
the internal revenue allotment shall be collected in the following manner: 
(a) Provinces – Twenty-three percent (23%); 
(b) Cities – Twenty-three percent (23%); 
(c) Municipalities – Thirty-four percent (34%); and 
(d) Barangays – Twenty percent (20%) 
Provided, however, That the share of each province, city, and municipality shall be determined
on the basis of the following formula: 
(a) Population – Fifty percent (50%); 
(b) Land Area – Twenty-five percent (25%); and 
(c) Equal sharing – Twenty-five percent (25%) 
Provided, further, That the share of each barangay with a population of not less than one hundred
(100) inhabitants shall not be less than Eighty thousand (P80,000.00) per annum chargeable
against the twenty percent (20%) share of the barangay from the internal revenue allotment, and
the balance to be allocated on the basis of the following formula: 
(a) On the first year of the effectivity of this Code: 
(1) Population – Forty percent (40%); and 
(2) Equal sharing – Sixty percent (60%) 
(b) On the second year: 
(1) Population – Fifty percent (50%); and 
(2) Equal sharing – Fifty percent (50%) 
(c) On the third year and thereafter: 
(1) Population – Sixty percent (60%); and 
(2) Equal sharing – Forty percent (40%). 
Provided, finally, That the financial requirements of barangays created by local government units
after the effectivity of this Code shall be the responsibility of the local government unit
concerned. 
  
Section 286. Automatic Release of Shares. – 
(a) The share of each local government unit shall be released, without need of any further action,
directly to the provincial, city, municipal or barangay treasurer, as the case may be, on a
quarterly basis within five (5) days after the end of each quarter, and which shall not be subject
to any lien or holdback that may be imposed by the national government for whatever purpose. 
(b) Nothing in this Chapter shall be understood to diminish the share of local government units
under existing laws. 
  
Section 290. Amount of Share of Local Government Units. – Local government units shall, in
addition to the internal revenue allotment, have a share of forty percent (40%) of the gross
collection derived by the national government from the preceding fiscal year from mining taxes,
royalties, forestry and fishery charges, and such other taxes, fees, or charges, including related
surcharges, interests, or fines, and from its share in any co-production, joint venture or
production sharing agreement in the utilization and development of the national wealth within
their territorial jurisdiction. 
Section 291. Share of the Local Governments from any Government Agency or Owned or
Controlled Corporation. – Local government units shall have a share based on the preceding
fiscal year from the proceeds derived by any government agency or government-owned or
controlled corporation engaged in the utilization and development of the national wealth based
on the following formula whichever will produce a higher share for the local government unit: 
(a) One percent (1%) of the gross sales or receipts of the preceding calendar year; or 
(b) Forty percent (40%) of the mining taxes, royalties, forestry and fishery charges and such
other taxes, fees or charges, including related surcharges, interests, or fines the government
agency or government owned or controlled corporation would have paid if it were not otherwise
exempt. 
  
Section 292. Allocation of Shares. – The share in the preceding Section shall be distributed in
the following manner: 
(a) Where the natural resources are located in the province: 
(1) Province – Twenty percent (20%); 
(2) Component City/Municipality – Forty-five percent (45%); and 
(3) Barangay – Thirty-five percent (35%) 
Provided, however, That where the natural resources are located in two (2) or more provinces, or
in two (2) or more component cities or municipalities or in two (2) or more barangays, their
respective shares shall be computed on the basis of: 
(1) Population – Seventy percent (70%); and 
(2) Land area – Thirty percent (30%) 
(b) Where the natural resources are located in a highly urbanized or independent component
city: 
(1) City – Sixty-five percent (65%); and 
(2) Barangay – Thirty-five percent (35%) 
Provided, however, That where the natural resources are located in such two (2) or more cities,
the allocation of shares shall be based on the formula on population and land area as specified in
paragraph (a) of this Section. 
  
Budgetary Limitation 
Section 325. General Limitations. – The use of the provincial, city, and municipal funds shall
be subject to the following limitations: 
(a) The total appropriations, whether annual or supplemental, for personal services of a local
government unit for one (1) fiscal year shall not exceed forty-five percent (45%) in the case of
first to third class provinces, cities and municipalities, and fifty-five percent (55%) in the case of
fourth class or lower, of the total annual income from regular sources realized in the next
preceding fiscal year. The appropriations for salaries, wages, representation and transportation
allowances of officials and employees of the public utilities and economic enterprises owned,
operated, and maintained by the local government unit concerned shall not be included in the
annual budget or in the computation of the maximum amount for personal services. The
appropriations for the personal services of such economic enterprises shall be charged to their
respective budgets; 
(b) No official or employee shall be entitled to a salary rate higher than the maximum fixed for
his position or other positions of equivalent rank by applicable laws or rules and regulations
issued thereunder; 
(c) No local fund shall be appropriated to increase or adjust salaries or wages of officials and
employees of the national government, except as may be expressly authorized by law; 
(d) In cases of abolition of positions and the creation of new ones resulting from the abolition of
existing positions in the career service, such abolition or creation shall be made in accordance
with pertinent provisions of this code and the civil service law, rules and regulations; 
(e) Positions in the official plantilla for career positions which are occupied by incumbents
holding permanent appointments shall be covered by adequate appropriations; 
(f) No changes in designation or nomenclature of positions resulting in a promotion or demotion
in rank or increase or decrease in compensation shall be allowed, except when the position is
actually vacant, and the filling of such positions shall be strictly made in accordance with the
civil service law, rules and regulations; 
(g) The creation of new positions and salary increases or adjustments shall in no case be made
retroactive; 
(h) The annual appropriations for discretionary purposes of the local chief executive shall not
exceed two percent (2%) of the actual receipts derived from basic real property tax in the next
preceding calendar year. Discretionary funds shall be disbursed only for public purposes to be
supported by appropriate vouchers and subject to such guidelines as may be prescribed by law.
No amount shall be appropriated for the same purpose except as authorized under this Section. 
  
Review of Appropriate Ordinances 
Section 326. Review of Appropriation Ordinances of Provinces, Highly-Urbanized Cities,
Independent Component Cities, and Municipalities within the Metropolitan Manila Area. –
The Department of Budget and Management shall review ordinances authorizing the annual or
supplemental appropriations of provinces, highly-urbanized cities, independent component cities,
and municipalities within the Metropolitan Manila Area in accordance with the immediately
succeeding Section. 
  
Section 327. Review of Appropriation Ordinances of Component Cities and Municipalities.
– The sangguniang panlalawigan shall review the ordinance authorizing annual or supplemental
appropriations of component cities and municipalities in the same manner and within the same
period prescribed for the review of other ordinances. 
If within ninety (90) days from receipt of copies of such ordinance,
the sangguniang panlalawigan takes no action thereon, the same shall be deemed to have been
reviewed in accordance with law and shall continue to be in full force and effect. If within the
same period, the sangguniang panlalawigan shall have ascertained that the ordinance authorizing
annual or supplemental appropriations has not complied with the requirements set forth in this
Title, the sangguniang panlalawigan shall, within the ninety-day period hereinabove prescribed
declare such ordinance inoperative in its entirety or in part. Items of appropriation contrary to
limitations prescribed in this Title or in excess of the amounts prescribed herein shall be
disallowed or reduced accordingly. 
The sangguniang panlalawigan shall within the same period advise
the sangguniang panlungsod or sangguniang bayan concerned through the local chief executive
of any action on the ordinance under review. Upon receipt of such advice, the city or municipal
treasurer concerned shall not make further disbursements of funds from any of the items of
appropriation declared inoperative, disallowed or reduced. 
  
  
  
Intergovernmental relations 
Section 25. National Supervision over Local Government Units. – 
(a) Consistent with the basic policy on local autonomy, the President shall exercise general
supervision over local government units to ensure that their acts are within the scope of their
prescribed powers and functions. 
The President shall exercise supervisory authority directly over provinces, highly urbanized
cities, and independent component cities; through the province with respect to component cities
and municipalities; and through the city and municipality with respect to barangays. 
(b) National agencies and offices with project implementation functions shall coordinate with
one another and with the local government units concerned in the discharge of these functions.
They shall ensure the participation of local government units both in the planning and
implementation of said national projects. 
(c) The President may, upon request of the local government unit concerned, direct the
appropriate national agency to provide financial, technical, or other forms of assistance to the
local government unit. Such assistance shall be extended at no extra cost to the local government
unit concerned. 
(d) National agencies and offices including government-owned or controlled corporations with
field units or branches in a province, city, or municipality shall furnish the local chief executive
concerned, for his information and guidance, monthly reports including duly certified budgetary
allocations and expenditures. 
  
Relations with PNP 
Section 28. Powers of Local Chief Executives over the Units of the Philippine National
Police. – The extent of operational supervision and control of local chief executives over the
police force, fire protection unit, and jail management personnel assigned in their respective
jurisdictions shall be governed by the provisions of Republic Act Numbered Sixty-nine hundred
seventy-five (R.A. No. 6975), otherwise known as “The Department of the Interior and Local
Government Act of 1990”, and the rules and regulations issued pursuant thereto. 
Section 29. Provincial Relations with Component Cities and Municipalities. – The province,
through the governor, shall ensure that every component city and municipality within its
territorial jurisdiction acts within the scope of its prescribed powers and functions. Highly
urbanized cities and independent component cities shall be independent of the province. 
  
Section 35. Linkages with People’s and Non-governmental Organizations. – Local
government units may enter into joint ventures and such other cooperative arrangements with
people’s and non-governmental organizations to engage in the delivery of certain basic services,
capability-building and livelihood projects, and to develop local enterprises designed to improve
productivity and income, diversity agriculture, spur rural industrialization, promote ecological
balance, and enhance the economic and social well-being of the people. 
  
Section 36. Assistance to People’s and Non-governmental Organizations. – A local
government unit may, through its local chief executive and with the concurrence of
the sanggunian concerned, provide assistance, financial or otherwise, to such people’s and non-
governmental organizations for economic, socially-oriented, environmental, or cultural projects
to be implemented within its territorial jurisdiction. 
Taxation – sources of income of local governments 
If it’s not in the IRA, you cannot collect it 
In terms of spending, there (1) should have basis on law; and, (2) with public purpose 
  
Local Revenue generation 
Section 129. Power to Create Sources of Revenue. – Each local government unit shall exercise
its power to create its own sources of revenue and to levy taxes, fees, and charges subject to the
provisions herein, consistent with the basic policy of local autonomy. Such taxes, fees, and
charges shall accrue exclusively to the local government units. 
  
Five distinct classes of potential LGU revenues 
1. Land-based tool* 
2. Community activity-based tools** 
3. Infrastructure based tools (sections 250, 155) 
4. Debt-based tools (sections 297-302) 
5. Revenue-sharing tools (sections 290, 291 and congressional funds) 
*sections 232, 235, 135, 236, 235 (a), 257, 258, 260, 20, 557, 558, 138 
**sections 143, 156, 137, 136, 139, 140, 141, 149, 153 
  
System of Budget Administration 
Local government budgeting 
1. Allocation 
 Economic efficiency 
 Technical efficiency 
 Net social benefits/costs 
2. Distribution 
3. Stabilization/Growth 
  
Budget preparation 
 Done by the local chief executive and the local finance committee 
Section 317. Submission of budget proposals by Heads of Departments or Offices 
 Each head of department or office shall submit a budget proposal for his department or
office to the local chief executive on or before the 15th of July each year; 
 Provided, that the budget proposal for each department or office shall be categorized
under either proposal of economic, social or general services; 
 Provided, further, that each service shall be covered by the budget of at least 1
department or office of the LGU concerned. 
  
Two parts of executive budget: 
Section 317 (b) 
Budget proposals of departments or offices shall be divided into 2 primary categories, namely: 
(1) the current operating expenditures; and, 
(2) the capital outlay 
  
Preparation of the Budget by the Local Executive 
Section 318, par. 2. 
 The local chief executive shall submit the said executive budget to
the sanggunian concerned not later than the 16th of October of the current fiscal year. 
 Failure to submit such budget on the date prescribed herein shall subject the LCE to such
criminal and administrative penalties as provided for under this Code and other applicable
laws 
  
Budgetary requirements (section 324) 
The budgets of LGUs for any fiscal year shall comply with the following requirements: 
1. 1. Barangay Aid – aid to barangays by the province, city or municipality shall not be less
than P1,000 per barangay (324 c) 
2. Calamity Fund – 5% of the annual appropriations for unforeseen expenditures shall be
set aside in the local budget for calamities as declared by the sanggunian concerned (324 d) 
3. Development Plan/debt servicing – debt servicing in the local budget is fixed at not
more than 20% of the regular income of the local government unit (324 b) 
4. Discretionary Fund (sec. 325 h) – the annual appropriations for discretionary purposes
of the LCE shall not exceed 2% of the actual receipts derived from basic real property tax in
the next preceding calendar year 
Budget Authorization 
 Legislative discussion of proposed budget is done by the Sanggunian between October 16
and November 17 
 Enact annual budget via appropriation ordinance on or before the current fiscal year 
  
Budget Review 
Section 326. Review of appropriation ordinances of provinces, HUCs, ICCs and
Municipalities within Metro Manila Areas. 
 DBM Power of review. The DBM has the power to review ordinances authorizing annual
or supplemental appropriations of provinces, cities and municipalities 
Section 327. Review of appropriation ordinances of component cities and municipalities. 
 The Sangguniang Panlalawigan shall review the ordinance authorizing the annual or
supplemental appropriations of component cities and municipalities in the same manner and
within the same period prescribed for the review of other ordinances 
 If within 90 days from receipt, the Sanngunian takes no action, the same shall be deemed
to have been reviewed in accordance with law and shall continue to be in full force and effect. 
 Sangguniang Panglungsod or Bayan power of review – sanggunians of cities and
municipalities have the power to review the barangay budgets. 
 The review must be completed within 60 days from receipt of the ordinance 
 If no action was taken within the said period, the ordinance is deemed approved (328 b) 
Budget execution 
 Actual release and disbursement of funds 
  
Limitations in disbursements 
 Overdrafts discouraged (337) – disbursements may be made from amounts in the
possession of the local treasury but in no case shall such exceed 50% of the uncollected
estimated revenue 
  Cash advances (339) – no cash advance shall be granted to any local official or
employee, elective or appointive, unless made in accordance with the rules and regulations as
the COA may prescribe 
 No advance payments (338) – no money shall be paid on account of any contract under
which no services have been rendered or goods delivered 
 No transfer of appropriation from one item to another (336) [technical
malversation; juggling funds not allowed] – 
 Funds shall be available exclusively for the specific purpose for which they have been
appropriated 
 No ordinance shall be passed authorizing any transfer of appropriations from one item to
another 
 juggling of funds whereby monies appropriated for specific purposes are transferred or
utilized for other purposed is prohibited 
  
Budget Accountability (COA) 
 see Section 340 
 
 
KEY REGULATORY REQUIREMENTS AND PENALTIES FOR NON-COMPLIANCE 
LOCAL GOVERNMENT UNIT 
Reporter: Rowena C. Dela Cruz 
 
Benefits of a Registered Business 
 Helps you avoid legal problems with the government. 
 Secures your reputation as a legitimate business. 
 Builds trust among suppliers, customers, and employees. 
 Allows you to fully market your brand and business everywhere. 
 Opens opportunities to do business transactions with large companies. 
Note: After you’ve registered with the Department of Trade & Industry or Securities Exchange
& Commission, you have 30 days to register for a business permit. You have to do this within
the 30 days or else you will be charge with a penalty fee. 
Business Permit (Mayor’s Permit) Requirements 
 DTI or SEC Registration 
 Certificate/Articles of Incorporation 
 Community Tax Certificate 
 Barangay Clearance 
 Location Clearance 
 Certificate of Occupancy 
 Building Permit 
 Fire Safety/Inspection Permit 
 Electrical Inspection Certificate 
 Contract of Lease 
 Picture/Sketch of the Site 
 Public Liability Insurance (for restaurants, mall, cinemas) 
 SSS Registration 
To Apply for Barangay Business Clearance 
 Location:  
Barangay Unit of the City or Municipality where you will locate. 
Requirements:  
• Community Tax Certificate and  
• Barangay Clearance Fee 
To Apply for Fire Safety Inspection Certificate 
Location:  
City or Municipal Hall Where you will locate 
Requirements:  
• Building plans  
• Building permit  
• Barangay Business clearance  
• Fire insurance coverage  
• Compliance to requirements and recommendations from fire safety inspectors 
To Apply for Building Permit and Electrical Inspection Certificate 
Location:  
City or Municipal Hall Where you will locate 
Requirements:  
• Building plans (including fencing, signboard, etc.) 
• Lot plan 
• Clearances (locational, home owners, barangay, MMDA, etc.)  
• Fire safety requirements  
• Contract of lease and authorization of owner (if rented)  
• Title, tax declaration, tax receipt (if owned)  
• Contractor’s business permit  
• Sketch  
• Old building permit  
• Bill of materials, specifications, structural computation  
• PRC/PTF of the Engineer 
To Apply for Sanitary Permit 
Location:  
Health Office of the City or Municipality where you will locate 
Requirements:  
• Chest X-Ray  
• 1x1 picture  
• Inspection of said establishment  
• Sanitary Permit Fee  
• Payment of sanitary permit and sanitation inspection fees  
• Medical Certificate / Health Card issued by the City Health Officer or duly authorized
representative 
To Apply for Certificate of Occupancy 
Location:  
City or Municipal Hall Where you will locate 
Requirements:  
• Pictures of the site  
• Fire Inspection Certificate 
To Apply for Locational Clearance 
Location:  
City or Municipal Hall Where you will locate 
Requirements:  
• Pictures of the site  
• Fire Inspection Certificate  
• Building Permit  
• Authorization from the owner (if rented)  
• Electrical Permit  
• Sanitary Permit  
• Certification of Non-Improvement  
• PRC/PTC of the Engineer  
STEPS IN SECURING A BUSINESS PERMIT (MAYOR’S PERMIT) 
The step-by-step process for procuring a Mayor’s Permit depends on the local regulations and
ordinances of the city/municipality where your business is located. But the general process
usually involves the following steps: 
 
1. Secure the initial requirements: 
 Accomplished Application Form 
 SEC/DTI/CDA Certificate of Registration 
 Contract of Lease or Transfer Certificate of Title 
 Sketch/Picture of the business location 
 
2. Secure permits and clearances – each permit can only be obtained when the aforementioned
requirements in step 1 are fulfilled. Each permit/clearance is usually obtained from designated
offices inside the City/Municipal Hall. The specific permits/clearances are as follows: 
 Barangay Business Clearance 
 Certificate of Occupancy 
 Building Permit and Electrical Inspection Certificate 
 Locational/Zoning Clearance 
 
3. File your Application Form along with the other requirements to the Bureau of Permits
(BP)/Business Permit and Licensing Office (BPLO) at the City/Municipal Hall. 
 
4. Procure a Community Tax Certificate/Cedula from the City Treasurer’s Office. 
 
5. An assessor will assess your application fees and you are required to have the assessment
(Official Billing Assessment) validated by a BP/BPLO officer. 
 
6. Submit your application requirements, along with the Official Billing Assessment, to the
designated office. 
 
7. Pay the necessary payment fees for the permits and licenses to the Cashier’s Office. 
 
8. Obtain a Fire Safety Inspection Permit from the designated Fire Department by presenting
your paid application requirements. 
 
9. Obtain a Temporary Sanitary Permit from the designated Sanitary Department by
presenting your paid application requirements. Depending on the local health regulations or
ordinances of the city/municipality, the actual permit may only be issued after completion of
mandatory company office inspections and/or health tests for employees. 
 
10. Submit all requirements, along with the Fire Safety Inspection Permit and Temporary
Sanitary Permit, to the designated BP/BPLO office. 
 
11. Release of Mayor’s Permit 
 
Business Permit Renewal 
Having a business registered in the Philippines requires you to renew its business permits
annually. 
It doesn’t matter if the company is a Single Proprietorship, a One Person Corporation, a
Partnership, a Corporation, a Branch Office, or a Regional Headquarter (ROHQ). All business
establishments, per Philippine law, must renew their permits or face possible closure of their
operations as well as a loss of face to their clients.  
 
Which permits in the Philippines require annual renewal & what is the deadline? 
 
The deadline to renew the barangay permit and mayor’s permit is January 22. Note, however,
that the local government has the authority to change this date. The BIR registration renewal
deadline is January 30. 
 
Deadline for
Document  renewal 
Barangay permit  January 22 
Mayor’s/Business January 22 
permit 
BIR registration  January 30 
These dates apply to all businesses regardless of the date of establishment. As such, even
companies registered in December must renew their permits in January. 
Requirements for Business Permit Renewal in the Philippines 
Barangay Permit Renewal 
The requirements for barangay permit renewal are the following: 
 Previous barangay permit (the original and a copy) 
 The receipt for the payment of the previous barangay permit (the original and a copy) 
 Completed application form 
Mayor’s/Business Permit Renewal 
An authorized representative must submit the following documents for business permit renewal: 
 New barangay permit 
 Your previous business permit (the original and a copy) 
 The receipt for your payment of the previous business permit (the original and a copy) 
 Your income statement from the previous year 
 Lease contract covering your stay until next year 
  Local insurance 
 Community tax certificate (CTC) otherwise known as cedula 
BIR Registration Renewal 
To apply for BIR registration renewal, you must prepare BIR form No. 0605. 
Note that all submissions must be in person. An authorized representative must go to each
government office to fulfill requirements. It is not possible to renew these documents online. 
Penalties for Non-Compliance  
What are the consequences of late or no renewal? 
Failure to renew your barangay and business permits, as well as your BIR registration will result
in penalties. The rates for the penalties are as follows: 
 A 25% surcharge on any unpaid taxes, fees, and charges; 
 A 2% monthly interest on anything left unsettled until the company pays the debts,
including the surcharge 
In more extreme cases of delinquency, such as operating for several years without a business
permit–or not having one in the first place–the local government can move to close down your
operations until you have settled your deficiencies. 
Seizure of property and assets is also a possibility–especially when it comes to violations of
secondary permits such as health, sanitation, and fire safety requirements. 
Another ground for seizure is continuing to run the business despite an order from the city hall to
cease your operations; in that case the local police may be called in to enforce the local
government’s decision. 
An attempt to run from the penalties by shuttering or abandoning the business is also unwise,
because there are also regulations and procedures for the proper shutting down of a business. 
It will also leave a black mark on your record that LGU’s or the BIR can see if you ever decide
to pursue it again in the future. The cons far outweigh any possible pros by operating
illegitimately, so be sure to keep everything on the level as a business owner. 
BUSINESS PERMIT AND LICENSING SYSTEM (BPLS)  
BPLS refers to the procedures followed by cities and municipalities in processing business
permits (more commonly known as Mayor’s Permit) which must be secured by businessmen to
operate legally in a locality. 
BPLS Streamlining means to reconstruct the current business permits and licensing systems
of LGUs for the purpose of simplifying and making them more efficient. 
The BPLS Nationwide Streamlining Program of the government enjoins cities and
municipalities to follow service standards in processing registration applications, both for new
and renewals, that is, 
 adopting a unified form 
 reducing the no. of steps 
 shortening processing time, 
 reducing the no. of signatories
 reducing the no. of requirements
 LATEST NEWS AND UPDATES - LGUS 
Local governments rise to
challenge                                                                          By: the Inquirer
Bureaus - @inquirerdotnet 
When the World Health Organization officially declared the new coronavirus disease (COVID-
19) as a pandemic, many local government leaders across the country wasted no time to
prepare for the looming health emergency. 
 
In Dagupan City, Mayor Brian Lim sent firetrucks to disinfect and sanitize streets, government
buildings, schools, markets and other areas every day to control the spread of virus infection. At
the onset of the outbreak, Lim immediately asked health officials to set up disinfection tents in
vital places, including the Malimgas and Makong markets, and Regional Medical Center. 
 
While people in the city remained in their homes, a project called “Hot Meals on Wheels” went
around villages to bring cooked food to residents. Lim used the equivalent of his eight-month
salary to buy 1,000 rapid test kits approved by the Food and Drug Administration. The amount,
approximately P1 million, would be used by local health officials for persons who are suspects
or probable carriers of the virus (formerly classified as persons under investigation). 
 
In Tarlac province, Gov. Susan Yap ordered 3,000 bunny suits, which were repurposed into
personal protective equipment for health workers. 
 
In Zambales, Gov. Hermogenes Ebdane Jr. had set up 15 quarantine facilities and border
disinfection units to strengthen the province’s fight against COVID-19. 
 
In Olongapo City, small wet markets, or “talipapa,” were put up in 17 villages to decongest the
public markets. 
 
 
Sack of rice 
In Baguio City, Councilor Art Allad-iw distributed relief goods to more than 80 households with
visually impaired members. Allad-iw, who walks around with the aid of crutches, had used his
own money to buy grocery items and hand these to his fellow persons with disabilities. 
 
In Nueva Ecija province, Mayor Emerson Pascual of Gapan City distributed a sack of rice, bags
of vegetables, live chickens and fresh eggs to each of the 34,000 households in his
town. Pascual also offered to donate P4.5 million representing his salary from July 2016 to
March this year to make sure that each of the households gets the aid they need during the
crisis. 
 
In Bataan province, Morong Mayor Cynthia Estanislao and her husband, former Morong Mayor
Jorge Estanislao, both of them doctors, put up the municipal epidemiology and surveillance unit
to monitor and identify suspected COVID-19 cases coming from Metro Manila. 
 
 
Cash aid, fresh fish 
In Quezon province, General Luna Mayor Matt Erwin Florido said local officials had prepared a
P4,000 cash aid for residents who would not qualify to receive financial assistance from the
national government. According to Florido, P3,000 will come from the local government’s
development fund while P1,000 will be contributed by barangay officials. 
 
In Sorsogon province, local governments have been distributing fresh and smoked “tamban”
(herring) to residents to supplement their food supply. Salvador Mendoza, the province’s
information officer, said Gov. Francis Escudero advised local governments to either give away,
or sell the fish at lower prices during the crisis. The provincial government gets its supply of fish
from Bulan fish port complex. 
 
Helping farmers 
The municipal governments of Arteche in Eastern Samar and Naval in Biliran bought locally
produced rice and vegetables for distribution to residents. Naval Mayor Gerard Espina also
provided bicycles to health-care workers who live outside the town center so they could go to
work. 
 
In Basey town, Samar, officials of Barangay Loyo distributed vegetable packs consisting of
cabbage, squash, “monggo,” onions, tomatoes and soy sauce to each of the 277 households.  
 
In the cities of Tacloban and Cebu, rolling markets have been mobilized to visit each village on
a specific date to sell vegetables, rice and fish to discourage people from gathering in public
markets. Since the launch of the 30 mobile markets in Cebu City on April 2, Jonil Matuguina,
city market administrator, reported a decline in the number of people going to Carbon Public
Market, the biggest wet market in the city. 
 
In Iloilo City, 240 community kitchens have been put up to provide meals to residents most
affected by the quarantine. Food packs prepared by day care teachers are delivered to
residents’ houses. The city government also provided temporary accommodations for hospital
personnel, especially front-liners at Iloilo City Community College. The city government also
implemented a cash-for-work program for 20,000 residents who received P2,500 each for 10
days of labor. 
 
In Negros Occidental, Gov. Eugenio Jose Lacson converted the government-
owned Mambukal Resort in Murcia town into a quarantine site for persons under monitoring and
a housing project into a healing center for suspects or probable cases of COVID-19 in
Barangay Sto. Niño, EB Magalona town. 
 
Organic food 
 
The local government of Kauswagan in Lanao del Norte has been distributing organic rice and
vegetables to Christian and Muslim families in its 13 villages. 
Kauswagan Mayor Rommel Arnado said most of these came from farms of former Moro rebels
under the town’s “From Arms to Farms” program. Some came from communal gardens
in Cayontor and Libertad villages. Each household received 25 kilograms of rice and assorted
vegetables like string beans, tomatoes, eggplants, “kangkong” and root crops. 
 
In Davao City, some 50,000 agri-food packs were prepared for poor families, especially those
who did not receive regular food rations in the past weeks. Each food pack contains a kilo each
of fresh vegetables, fish and either pork or chicken; a tray of eggs and 2 liters of milk, all bought
from Davao City farmers under its “buy-back, repack and distribute” program.  The same
strategy of distributing fresh vegetables is done in Kapatagan, Lanao del Norte; Opol, Misamis
Oriental; and Cagayan de Oro City. 
 
In Cagayan de Oro, families with children who are severely malnourished are given special food
packs with vegetables, rice, eggs, multivitamins and canned goods. 
 
In General Santos City, the local government divided its territory into 12 clusters and organized
four mobile talipapa for residents. 
 
REPORTS FROM YOLANDA SOTELO, GREG REFRACCION, ARMAND GALANG, MARIA
ADELAIDA CALAYAG, JOANNA ROSE AGLIBOT, DELFIN MALLARI JR., MADONNA
VIROLA, MA. APRIL MIER-MANJARES, MAR ARGUELLES, CARLA GOMEZ, NESTLE
SEMILLA, NESTOR BURGOS JR., JOEY GABIETA, JIGGER JERUSALEM, RICHEL UMEL,
KARLOS MANLUPIG, LEAH AGONOY AND ROMMEL REBOLLIDO 
Local governments rise to challenge | Inquirer News 
 
 6.1 LATEST NEWS AND UPDATES  
(Danica Ann F. Palad) 
LGUs promote good nutrition amidst COVID-19 pandemic 
The Enhance Community Quarantine (ECQ) required the suspension of classes,
temporary closure of non-essential businesses and enterprises, setting up of
checkpoints at every entry and exit points, and for people to stay home. These are the
things that people need to adjust to and cope with to prevent the spread of Coronavirus
or COVID-19. 
Actions are restricted, and work is limited. Earning a living to survive is difficult for many
of our people. Local Government Units must step in to provide food packs or relief
goods to their respective constituents. The food packs usually contain rice, instant
noodles, biscuits, sardines or other canned food. 
Fortunately, some LGUs in Region 9 such as Zamboanga City, Isabela City and the
Municipality of Kabasalan in Zamboanga Sibugay promote good nutrition by including
fresh vegetables and fish in their rations. Another LGU  distributed vegetable seedlings,
while another launched  a Kadiwa on Wheels where farm produce are made readily
accessible to their constituents. 
Hon. Katrina Cainglet-Balladares and Luvly Grace Cainglet-Valdez, the Mayor and Vice-
Mayor, respectively, of the Municipality of Kabasalan in Zamboanga Sibugay, added
fresh vegetables and fish to the food packs distributed in their locality. Kabasalan LGU’s
strategy is to buy these from local farmers and Fisherfolk, which, not only ensure that
every household is given healthy and nutritious food, but also improve income of local
farmers and fisherfolk, during quarantine. 
Another good practice is the distribution of vegetable seedlings and assorted vegetable
seeds to encourage backyard gardening during this quarantine. This is being practiced
by the City Agriculture Office of the City of Isabela, Basilan. Home gardening will not
only promote family bonding, but also help the family to have fresh home
grown vegetables for healthy and nutritious food. 
It’s hard to go to the market and grocery stores during this pandemic as there are no
public transportation going around the locality, unless one has a private vehicle. This
drove the LGU of Zamboanga City to launch the Kadiwa on Wheels which visit and
serve the different barangays in the City. The Kadiwa on Wheels is a joint project of the
DA, BFAR, NFA and City Agriculture Office of the LGU of Zamboanga City. It is a
container truck filled with fresh farm products including vegetables, fruits, fresh and
dried fish and fresh cut flowers from the local farmers where the constituents can buy
from. 
Maintaining a healthy and good nutrition, and boosting one’s immune system are vital in
this time of crisis. The distribution of food packs is a good way to encourage people
to stay at home and prevent the spread of COVID-19; but it is better to include fresh
vegetables to encourage good nutrition. Other LGUs are encouraged to do the same. A
strong immune system, good nutrition and proper hygiene will help prevent the onset
and spread of COVID-19.AA VI Cielo Katrina M. Mabalot 
 
DILG SA LGUs: Palakaisn ang COVID-19 case finding,
contact tracing  sa ilalim ng bagong alert system; magtalaga ng isang contact
tracer kada barangay 
September 20,2021 
 
Pinaalalahanan ng Department of the Interior and Local Government
(DILG) ngayon ang mga local na pamahalaan na siguraduhin na may itinalaga silang ka
hit isang contact
tracer sa bawat barangay na may populasyon na hihigit sa 5,000 upang mapalakas ang
case finding at contact tracing bilang bahagi ng pagpapatupad ng bagong alert
system sa Metro Manila. 
“Gusto naming mas maging masigasig ang ating case finding at contact
tracing lalo na ngayong na mas mabilis ang pagkalat ng Delta Variant.
Dahil dito, importante na mayroong karagdagang contact tracer sa bawat barangay
para mapabilis ang pagtutunton at maalalayan ang mga positive cases at close
contact,” sinabi ni DILG Secretary Eduardo M. Ano. 
Sinabi nito na ang barangay contact tracer ay karagdagan sa mga contact
tracers na nanggaling sa LGUs. Sinabi din nito na ang DILG
ay handang magsagawa ng pagsasanay para sa mga karagdagang barangay contact
tracers pamamagitang ng Local Government Academy o Department of Health. 
“Mainam na ang contact tracer ay magmula sa miyembro ng BHERT (Barangay Health
Emergency Response Team) ng
barangay dahil inaasahan na sila ay nakadalo na sa mga angkop na pagsasanay at kila
la nilaang mga tao sa kanilang lugar,” he said. 
Ayon kay Ano, para sa mga barangay na may populasyon ng mahigit 5,000,
ang karagdagang contact tracers ay maaaring mag-empleyo o magtalaga ang
LGUs upang masiguro na may taong nagmomonitor sa mga kaso ng
coronavirus pati na ang mga nakahalubilo o nakasama nito. 
Ayon sa patakaran ng Inter- Agency Task Force (IATF), ang NCR ay nasa alert level 4
kung saan ang bilang ng kaso ng COVID-19 ay mataas o nadadagdagan at ang total
bed utilization rate ang intensive care unit utilization rate ay nasa high utilization. Ang
Granular level lockdown o micro-level quarantine ay pwedeng ideklara ng
mayor sa mga lugar na tinaguriang “critical zones” ng LGUs kahit na ano pang alert
level. 
Sa Memorandum Circular 2021-103, sinabi ng DILG Secretary, kasama sa Gawain ng
contact tracers ang magbahay-
bahay upang malaman ang mga bagong dating mula sa probinsya o ibang bansa at ital
a ang kanilang close contacts. 
  
Dagdag pa nito, dapat payuhan ng mga contact tracers
ang mga bagong dating na mag-home
quarantine, alamin ang kanilang temperatura at manmanan kung makararanas ng
COVID-19 symptoms sa loob ng 14 days. 
 
"Kapag may lumabas na sintomas, dapat agad na maihiwalay ang taong iyon sa mga k
asamahan niya sa bahay dahil siya ay itinuturing na COVID-19 suspect. Ito
ay dapat madala agad sa referral center ng DOH o sa ospital para sa examination at
treatment," dagdag nito. 
 
Ayon kay Año, importante sa LGUs, sa tulong ng mga BHERTs at contact
tracers, na mapabilisang ma-isolate
ang mga taong positibo gayundin ang pagpapaigting ng bakunahan para mapababa an
g mga kasi. 
 
"Muli rin po kaming nakikiusap sa publiko na ipraktis ang minimum public health
standards (MPHS) at mag-isolate na at makipag-
ugnayan sa inyong LGU kapag may sintomas kayong nararamdaman.
Tayo rin ang patuloy na mahihirapan at mapeperhuwisyo kapag hindi tayo sumusunod s
a MPHS," sabi nito. 
 
May 130,178 contact tracers
ang kasalukuyang nakakalat sa buong bansa para makatulong sa contact tracing
activities na saklaw ang 103.5-million population. Lahat ng contact tracers
ay nasa ilalim ng pamamahala ng mga City/Municipal Health Office. 
 
Ayon kay Año, ang bilang na ito ay eksakto lamang pero sa pagdami ng banta ng Delta
variant, mas masigasig na case finding at contact tracing measures ay kailangang-
kailangan sa istratehiyang Prevent-Detect-Isolate-Treat-Reintegrate
(PDITR) laban sa COVID-19. 
 
Ngayong marami nang bakunang parating, hinikayat ni Año ang mga LGUs na paspasa
n ang bakunahan ng mga eligible
recipients. Pinaalalahanan nito ang publiko ang mga LGUs para sa kanilang vaccination
schedules. 
 
“Napakalaki ang maitutulong ng pagpapabakuna para
mas mapababa natin ang kaso at makatawid na tayo sa new normal,” he said. 
Sources 
https://nro9.neda.gov.ph/lgus-promote-good-nutrition-amidst-covid-19-pandemic/ 
https://www.dilg.gov.ph/news-archive/