Legal Forms And

Requirements In
Starting A Business

Prepared by:

Sameem M. Mustapha
Sole Proprietorship

• Business structure owned and

managed by a single individual
• The business owner is referred to as
the “sole proprietor”
• Has full control and authority over the
business
• Every asset is owned by the proprietor,
and they have unlimited liability
• Easiest to run since there is no
formalities and regulations needed like
the corporation and partnership
• Requires minimal amount of capital
• Easier to set up and register
 Sole Proprietorship Business Registration
1. Register a business name with DTI to acquire a DTI
certificate of Registration;
2. Register with the barangay office where the business is
going to be located to acquire a Barangay Certificate of
Business Registration;
3. Register with the Mayor’s Office to acquire a Mayor’s
Permit; and
4. Register with the Bureau of Internal Revenue (BIR) to
acquire a Certificate of Registration.
 DTI
CERTIFICATE
It is necessary to
register your single
proprietorship
business with the
DTI to provide it with
a legal identity and
gain the rights to use
your business name.
 BARANGAY
CERTIFICATE OF
BUSINESS
REGISTRATION
Barangay Business
Certificate is one of the
permits or documents
required when registering
a new business. This
certificate is also needed
when renewing your
expired Mayor’s Permit
or Business License.
 MAYOR’S
PERMIT
Mayor’s permit or business
permit ensures that your
business complies with all
the ordinances of the
particular city or
municipality you operate in.
This is important because
each municipality or city
has its own set of
ordinances.
 BIR
CERTIFICATE OF
REGISTARION
Registering your
business with the BIR
gives you the authority to
print your official receipt
and invoices, formally
register the Tax
Identification Number
(TIN) provided for your
business in the
Certificate of Registration
Some examples of sole proprietorship businesses are:
1. Freelance photographer

Being a freelance
photographer means that
you work for yourself,
taking on clients for photo
shoots or creating and
selling your fine art
photography.
2. Bakers & Chefs

If you love to bake or

prepare food for others as
a service—meaning,
you’re setting paid to do
it– you’re a great
candidate for sole
proprietorship.
3. Fitness instructor

If your certified to teach

yoga fitness classes or you
are a personal trainer, you
can set up a sole
proprietorship to help others
meet their fitness goals.
PARTNERSHIP
 A partnership is the relationship between two or more
people to do trade or business.
 A legal agreement should be drawn up to outline how profits
will be shared.
 Each person contributes money, property, labor or skill, and
shares in the profits and losses of the business.
 Start-up costs are usually split equally between partners.
 Your personal liability is unlimited, but you’re also financially
responsible for any business decisions your partner makes.
 If a contract is broken or debts are incurred without your
knowledge, you’re still hook financially.
Two Forms of Business Partnership

General
Partnership
Limited Partnership
 Is a business entity made of two or
General partnership – more partners who agrees to
establish and run a business.

 This is a type of business agreement made between two or

more individuals who agree to share all assets, profits and
liabilities of the business.

 Each partner is personally responsible for the business,

including debts and lawsuits, and is held liable for the actions
of their partner (s).
Example of a General
Partnership

Mark and Melissa decided to open

a baking store. The store is named
M&M Bakery. By opening a store
together, Mark and Melissa are
both general partners in the
business, M&M Bakery.
 Is a form of partnership in which some of
the partners contribute only financially
Limited Partnership - and are liable only to the extent of the
amount of money that they have invested.

One owner is a general partner and at least one owner is a limited

partner.

The general partners make everyday business decisions and are

personally liable for business debts.

However, the limited partners simply invest in the business and have
little control over business operations.
Example of a Limited Partnership

Ben, Bob and Brandi are partners in

owning and running a book store.
They own The Book Nook. Per their
partnership agreement, Ben and Bob
are limited partners. They are
investors in the store. They each give
$50,000 to establish the store. Brandi
on the other hand is a book expert,
so she runs the store. Brandi is a
general partner.