A simplified guide into registering your business in the Philippines.

Starting your own business is a huge achievement, so first of all - congratulations! You’re well on your way to turning your entrepreneurial dreams into reality. As a company that finances many businesses, we understand your vision and your dream to make it big!

However, before you can operate fully, we would advise you to ensure that your business is legally registered and compliant with the Philippine regulations. This guide will walk you through the steps required for business registration and other essential requirements to get your venture soaring.

1. Determine Your Business Structure

The first step in registering your business is deciding on the structure that best suits your needs. In the Philippines, the most common business structure types include:

• Sole Proprietorship: Ideal for small businesses owned and managed by one person. This structure is easy to set up but comes with unlimited liability. This means your personal assets can be at risk if the business faces financial difficulties.
• Corporation: A separate legal entity owned by shareholders. This structure provides limited liability protection but requires more documentation, including bylaws and Articles of Incorporation. It's best suited for larger businesses with multiple owners or investors.
• Partnership: A business owned by two or more individuals who share profits, losses, and responsibilities. Partnerships can be general or limited. It can vary depending on levels of liability for the partners.
• Cooperative: A business owned and operated by a group of individuals for their mutual benefit. It requires a cooperative structure and is typically used by community-based businesses.

Choosing the correct structure is crucial as it affects your tax obligations, legal liabilities, and funding options. We recommend you research on the different types and consider consulting with a legal advisor to determine which structure aligns best with your business goals.

2. Register your Business with the SEC or DTI

Once you have identified your business structure, the next step is to officially register your business with the appropriate government agency.

• For Corporations and Partnerships: Register with the Securities and Exchange Commission (SEC). The SEC registration process includes submitting the Articles of Incorporation, bylaws, and other required documents specific to your business type. This process ensures that your business is legally recognized and can operate under the laws of the Philippines.
• For Sole Proprietors: Register with the Department of Trade and Industry (DTI). This process involves securing a Certificate of Business Name Registration. This validates your business's name and prevents other entities from using it.

3. Register Your Business Name

Your business is unique, and the name you decide is important from a brand identity, value and a recall point of view. Registering your business name ensures it is legally protected and recognized by the government. Follow these steps to register your business name with DTI:

• Visit the DTI website and start your registration process.
• Submit a list of your preferred business names and pay the registration fee.
• Once approved, you will receive a Certificate of Business Name Registration that is valid for five years.

You are required to register your business for many reasons. It secures your brand, adds credibility, is essential when dealing with clients, suppliers, and financial institutes.

4. Register with the Bureau of Internal Revenue (BIR)

The BIR registration requirements are mandatory for all businesses operating in the Philippines. Registering with the BIR allows you to pay taxes, issue official receipts, and remain compliant with tax laws. With a few simple steps and an application form, it's easy to register with the BIR and get your business up and running.

Steps to register with the BIR:

• Visit your nearest BIR Revenue District Office (RDO) that has jurisdiction over your business location.
• Submit the completed BIR Form 1901 or 1903, depending on your business type.
• Provide documentary requirements such as your Certificate of Business Name Registration, Articles of Incorporation (for corporations), and other relevant documents.
• Pay the registration fee and receive your Certificate of Registration and Authority to Print Receipts and Invoices.

Additionally, secure a Tax Identification Number (TIN) for your business, open a set of books of accounts, and print official receipts and invoices for tax purposes. Maintaining accurate records and issuing official receipts is essential for compliance and transparency.

5. Obtain Barangay Clearance and Mayor’s Permit

Before you can officially start your business, you need to get local permits that include a Barangay Clearance and the Mayor’s Permit from the Local Government Unit (LGU) where your business is located. Here's how they help:

• Barangay Clearance: This is a prerequisite for obtaining the Mayor’s Permit and shows that your business complies with community standards.
• Mayor’s Permit: Also known as the Business Permit, this authorizes your business to operate legally in your chosen location. Requirements typically include your SEC or DTI registration, lease contract (if renting), and Barangay Clearance.

These permits are essential as they ensure your business meets local safety, zoning, and environmental regulations. Failing to secure these permits can result in fines or business closure.

6. Comply with Employee Benefits in the Philippines

If your business has employees, it is mandatory to register them for government-mandated benefits. These benefits are designed to protect employees’ welfare and include:

• Social Security System (SSS): Offers benefits for sickness, maternity, disability, retirement, death, funeral, and unemployment.
• PhilHealth: Provides health insurance coverage to employees and their dependents.
• Pag-IBIG Fund (HDMF): A national savings program that offers housing loans and financial assistance to members.

Additionally, registering your employees and ensuring timely contributions are crucial for legal compliance and maintaining a healthy relationship with your workforce.

7. Consider Financial Support for Your Business

After completing all registration steps, your business is ready to operate legally. However, growth often requires additional funding, whether for inventory, expansion, or working capital. Keeping this in mind, many businesses turn to financial institutions for support.

Esquire Financing is a leading non-bank financial institution that offers non-collateral business loans tailored to SMEs in the Philippines. Unlike traditional bank loans, Esquire’s loans do not require collateral, making them more accessible to growing businesses. With quick processing times and minimal documentary requirements, Esquire Financing provides an easy solution to meet your financing needs.

To summarize…

Starting a business in the Philippines involves several steps to ensure compliance with local laws and regulations. From choosing the right structure and securing the necessary permits to registering with government agencies, each step is vital to your business's long-term success. By following this guide, you can navigate the business registration process confidently and set your business up for success.

For ongoing financial support, consider partnering with Esquire Financing, where we are committed to helping entrepreneurs fuel their dreams with fast, hassle-free loans. Visit Esquire Financing for more information on how we can support your business journey.