Republic of the Philippines

Department of Education

PUBLIC TECHNICAL-VOCATIONAL
HIGH SCHOOLS

Unit of Competency: Legalize a Business

Module no. 3 Module Title: Legalizing a Business

 TABLE OF CONTENTS

Module 3. Legalizing a Business...................................................1

Pre-test............................................................................................1

Let Us Study....................................................................................2
 Procedure in Registering a Business.......................................3
 Benefits Derived from Registering your Business....................3
 Sample of Legal Documents...................................................4
How Much Have You Learned?........................................................9
Let Us Apply What You Have Learned..............................................9

Post Test..........................................................................................10

Key to Correction.............................................................................12
 MODULE 3

COURSE : ENTREPRENEURSHIP III

UNIT OF COMPETENCY : LEGALIZE A BUSINESS

MODULE TITLE : LEGALIZING A BUSINESS

SUGGESTED DURATION : 12 HRS

WHAT IS THIS MODULE ABOUT?

This module covers the knowledge, skills, attitudes and values

needed in legalizing a business.

WHAT WILL YOU LEARN?

At the end of this module, you should be able to:

a. enumerate the steps/procedure in making the business legal;

b. gather legal documents pertaining to business/enterprise; and
c. explain the importance of registering the business to various
government offices.

WHAT DO YOU ALREADY KNOW?

Pre-test

Let us find out how much you already know about legalizing a
business. Read and understand the questions below. Choose the
correct answer by writing the letter of your answer in your quiz
notebook.

1. After registering with the DTI, the certificate becomes your proof
of _____.
a. authority to operate a business
b. business ownership
c. license to operate
d. payment of taxes
2. Where do you need to go to in order to secure the municipal
license or Mayor’s permit which will serve as your license or
permit to operate the business?
a. BIR
b. CDA
c. DTI
d. BPLO

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 3. There is political stability when there is no frequent change in
government; especially through force and violence. This
situation has to do with_________________.
a. facilities and infrastructures
b. maintaining peace and order
c. maintaining political stability
d. tasks
4. If you need to systematize the payment of taxes of your
business, where will you go?
a. BIR
b. DOLE
c. SEC
d. SSS
5. It is necessary to register your business to make it _____.
a. functional
b. legal
c. operational
d. profitable

LET US STUDY

Words to Study

Ownership means an exclusive right of a

person to a business
Authorization is the issuance of approval to
operate
Legalize 8. means to be permitted by law
2. DTI – Department of Trade and Industry
6. Ramon Lopez
DOLE – 5. Department of Labor and Employment
7. Silvestre Abello
3. SSS – Social Security System
SEC – Securities and Exchange Commission
10. CDA – Cooperative Development 10. Authority
1. BPLO – Business Permit and Licensing Office
4. BIR Revenue/9. Caesar Dulay
Legality of your business venture is necessary to make your
operation legal. The following illustration shows some of the documents
to be secured from the different governments agencies to run your
enterprise legally. Without compliance with those legal requirements
your business is considered illegal. These are documentary transactions
between the owner of the business and the government.

2
 I need to get a
permit for my
business,
where can I
ask for
assistance?
DTI DOLE SSS
SEC BPLO CDA
Barangay Permit

The following is the procedure in registering a business as

mandated by the Introduction to Entrepreneurs of Small Enterprises,
Research and Development Foundation (SERDEF).

 Register your business name with the Department of Trade and

Industry (DTI). The certificate issued after registration becomes
your proof of business ownership.
 Register with your municipal city government. When you have
a municipal license or a mayor’s permit, this serves as your
authorization to conduct or operate the business.
 Register with the Bureau of Internal Revenues (BIR). This will
help systematize your financial operation and payment of taxes.
 You have to register at the Social Security System (SSS) if you
have five or more employees.
 Register the Article of Partnership or Article of Incorporation
with the Securities and Exchange Commission (SEC).
 Register with the Department of Labor and Employment.

There are several benefits derived from registering your business

with the government, as follows:

1. When you register your business with the Department of Trade

and Industry, the certificate issued to you becomes your proof
of business ownership.
2. The municipal license or Mayor’s permit issued to you serves as
an authorization for you to operate your business.
3. Your registration with the Bureau of Internal Revenue will help
you systematize your financial operations and the payment of
taxes.
4. If you have registered your business enterprise with
Cooperative Development Authority (CDA), you can enjoy the
following privileges:

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 a. Exemption from taxes and fees except from real property and
capital gains tax, import duties and taxes, value-added tax on
imported articles, taxes on income not arising from the CDA
activity such as interest, royalties, prizes and dividends.
b. Exemption of the CDA derived income from the computations of
the owners or members in division.
c. Exemption from any government rules and regulations on
assets, income and activities directly connected with the
services of CDA.

It is a must to register your business for your own benefit and

protection. When your business has been registered you are now
ready to own your business and face challenges coming your way.

(The following pages show some samples of legal documents pertaining to

business/enterprise.)

4
LET US APPLY WHAT YOU HAVE LEARNED

Activity 1. Interview a business owner in your neighborhood. Ask

him/her how the business was registered, how much it costs him/her to
register his/her business. Share interview results with the class.

Activity 2. Interview a shareholder of a successful cooperative

enterprise. Ask how he/she registered the business and how much is
the cost.

LET US REMEMBER:

As an entrepreneur, it is important to register your

business to various government and non-government
offices for your own benefit and protection.

HOW MUCH HAVE YOU LEARNED?

Write the steps in registering your business. Record them in the

correct order. Do this in your quiz notebook.

9
Post-test
Filling-up of legal forms.

Directions:
Fill-out the Securities and Exchange Commission Form 28.1-4.

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RESOURCES:

References
Legal documents from different government agencies
Business plan

REFERENCES:

Villanueva, et. al. Business Management III,

Adriana Publishing Co. Inc., pp.119-121, Cubao, Quezon
City
Teneza, et. al. Business Management III,
Shekinah Publishing and Printing Press, pp.173-176,
Las Pinas City
http://www.businessplanpro.com
http//www.business.org
http//www.businessdictionary.com

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KEY TO CORRECTIONS

Pre-test

1. B
2. D
3. C
4. A
5. B

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