DON BOSCO TECHNICAL COLLEGE

ARCHITECTURE DEPARTMENT
736 GENERAL KALENTONG ST., MANDALUYONG CITY

Name: GUERRERO, Ronne Louise B. Professor: Arch. Danillo T. Gonzales, FPIA, UAP
Year: 5th Year Architecture Date: October 3, 2023
Subject: BMA 1 Homework: BMA-1-HW#8.1

Detailed steps, including the requirements for each steps, in Registering a

Business organization including the Estimated Fees and Expenses.

1. CHOOSE YOUR BUSINESS STRUCTURE

A. Sole Proprietorship (Self-Employed Individual/Professional)

This shall include all businesses owned by only one person,
including freelancers and professionals. If you are planning to sell homemade food,
clothes, medical paraphernalia, or want to raise money from digital advertising
by blogging and vlogging, registering as a sole proprietor is beneficial because it
usually has lower taxes and fewer regulations to comply with.
However, a sole proprietorship does not distinguish its owner from the business, i.e.
any transaction made by the business reflects on the owner of the business. So if
you have excess liabilities in your business, your creditors can sell your personal
belongings to compensate.

B. Corporations and Partnerships

The main benefit of creating a corporation or a partnership is that the business can
have more funds to operate and expand since there is more than 1 investor. This
will also make business management more flexible since you and your co-owners
can share responsibilities based on your strengths.
However, the catch is that corporations and partnerships are heavily regulated and
are taxed more than sole proprietors.
To illustrate:
A business earning PHP 10,000,000 in taxable income will incur the following income
taxes:

 There is a difference of PHP 558,500 in taxes;

 Dividend Taxes are only incurred when actually withdrawn by the owner; and
 This only includes the taxes that are different for both business structures.

Choosing the best business structure for you

Determining which business structure works for you depends on your intention,
ability to be compliant with different regulations, risk appetite, and capacity to
produce capital for your business.
1. Sole proprietorship/Self-employed professional – these are for people who
want an easy way to own a business without worrying too much about highly
technical laws. If you have the capital to set up and run a business, this is the
best business structure for you.
2. One-person Corporation – these are for people who want the prestige of
owning a corporation with the benefit of becoming the only one responsible for
decision-making while also securing your personal assets from creditors.
3. Domestic Corporation – these are for people who want to create a large-scale
enterprise since this business structure enables them to have more than 5
investors. Every industry leader creates a domestic corporation that allows them
to gather more capital for expansion purposes.
4. General Partnership – If you cannot create a business on your own due to a
lack of capital but also do not want the added responsibility of a corporation, then
this may be the best business structure for you. This will allow the owners to
gather more capital by inviting more partners into the business while limiting the
number of requirements when dealing with government agencies. Keep in mind
that taxation is the same for all corporations and partnerships.
5. Others – there are other business structures available for new registrants like
General Professional Partnerships, Resident Foreign Corporations, and
Cooperatives. However, their taxation and management are almost the same
as the other four.

2. REGISTER YOUR BUSINESS NAME AND/OR CORPORATE NAME

A. DTI (For Self-employed individuals)

Applying for a business name is required for all business owners that wish to use
names other than their birth name for their business. Businesses, by default, must be
named after the owner (e.g. Juan Dela Cruz), so if you want to name your business
“Aling Dolly’s Online Shop”, then you are required to apply for business name
registration with the DTI.
However, you may skip this step if you are a freelancer or a professional, whose
income solely comes from providing services.

B. SEC (For Corporations and Partnerships)

Business name registration is different for corporations and partnerships. Instead of
DTI, you have to do the registration with the Securities and Exchange Commission
or SEC.
3. APPLY FOR A CERTIFICATE OF REGISTRATION WITH THE BIR

All businesses are required to register with the BIR. This will allow taxpayers to pay
their tax dues and enjoy the benefits of a legit business. The general process to
register is as follows:
1) Accomplish BIR Form 1901 for sole proprietors or BIR Form 1903 for
corporations/partnerships;
2) Submit the filled-out forms together with the requirements to the RDO where
your business is located;
3) Pay the corresponding registration fee; and
4) Claim the Certificate of Registration on the scheduled date.

4. APPLY FOR A BUSINESS PERMIT

It is best practice to secure a business permit from the Local Government Unit (LGU)
governing the city where your business is situated before starting your business. You
can get this done at the same time as your BIR registration.
To apply for a business permit/mayor’s permit, you must:

1. Secure all documents as required by your LGU;

2. Have your location assessed by the local fire department;
3. Pay the corresponding assessment fees; and
4. Claim the mayor’s permit on the scheduled date.

Additional Requirements if You Have Employees

Any business with employees must register with the DOLE, SSS, PhilHealth,
and PagIBIG.
Fortunately, the whole process may be done in Philippine Business Registry (PBR)
kiosks which are available in selected DTI and SEC offices. Meaning, if the kiosks
are available, you may register all these employer IDs in one setting.
Steps:
1) Accomplish PBR Form;
2) Submit to the DTI Teller together with 1 photocopy of the SEC Certificate (if
applicable). Bring the original copy for verification;
3) Pay the corresponding fee; and
4) Claim Employer Registry Numbers (SSS, PhilHealth, and PagIBIG).
How Much Is the Total Cost of Business Registration in the Philippines?
For Sole Proprietors

For Partnerships
For One Person Corporations

The amounts are based on the following:

 Authorized Capital of PHP 1,000,000.

 Estimated shares to be issued once you invested cash and inventory – PHP
500,000.
 Application fee of LGUs shall include all necessary permits (e.g. fire fee, sanitary,
etc.)
 DST on original issuance will be charged once the shares are actually received
by the shareholder/s.

For Corporations
It shall be computed as the total cost of registration of a one-person corporation
(OPC) plus registration of By-Laws and Registration of stock worth PHP 1000 and
PHP 150, respectively, which brings the estimated cost of registering domestic
corporations to PHP 14,860.
How Long Does It Take To Register Philippine Business?
Sole Proprietor – DTI and BIR Registration may be done within 1 to 2 business
days; LGU (Business Permit) Registration may take up to 6 weeks.
Corporations and Partnerships – SEC registration may take 1 to 10 business days
while BIR Registration may be done within 1 to 2 business days; LGU (Business
Permit) Registration may take up to 8 weeks.

REFERENCES:

Miguel Antonio Dar II, C., Perez, R. M., & Jr., L. B. (2022, May 30). How to register a
business in the Philippines: The ultimate guide. FilipiKnow. https://filipiknow.net/how-
to-register-a-business-in-the-philippines/