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SECURITY

WORKPLACE
Technocart Corporation establishes its safety and security policies of
all assets, tangible and intangible, and its people, from managerial and
supervisorial level down to rank and file employee level, against to possible
loss, deterioration, unnatural obsolescence, and workplace violence that in
any other way may disturb the daily operations of the corporation thus,
diminishing financial and operational losses.
The President of Technocart Corporation is in charge of strictly and
keenly observation of the security and safety policies implemented in the
office. The Vice President for Productions and Operations on the other hand
will then be held responsible for the offsite warehouses security and safety
policies. The President and Vice President for Productions and Operations are
then being held liable for any failure or defilement to comply of the policies
being agreed. The key to a safe workplace is having an effective safety and
security policies in place and to communicate these policies to all employees.
The security and safety policies are laid down below.

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SA_Illustration#1: Safety and Security


Policy
Fire Prevention Measures
Guarantee safety throughout the workplace through effective life safety programs that help protect all assets

1. Respecting the No Smoking Policy inside the work area.


2. Employees are to be trained to use firefighting materials and the
said firefighting materials are to be tested regularly.
3. Firefighting Materials are to be strategically placed in the work area.
4. Supplies should be stored in its designated areas and kept only in a
small quantity.
5. Keeping exits and hallway free of obstructions.
6. The use of extension cords should be minimal and used only when a
flexible temporary connection is necessary.
7. Electrical equipment should be properly grounded. If any evidence
is found of frayed, cracked or damaged wiring or electrical outlets,
the equipment affected should be taken out of service until repairs
are made.

Water Safety Measures


Guarantee that all assets are protected from destruction or performance failure due to moist and water contac

1. All equipments are not to be located directly on the floor.


2. Windows should properly protect the workplace for water leakages.
3. Documents are to be stored properly in a waterproof container and
at a higher place.

Air Conditioning
Guarantees that all technological or IT equipments are properly ventilated.

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1. Air Conditioners are to be properly installed in the work area to


ensure that IT equipment are properly ventilated and cooled.
2. Air Conditioner filters are to be regularly cleaned.

Physical Security
Guarantees the employees and assets susceptible to theft
kept away from perpetrator.
1. Employees are required to wear their identifications in the vicinity
of the workplace.
2. Visitors or guests should sign in on the log book and wear a visitors
pass issued by the corporation at all times within the vicinity.
3. Visitors or guests are to be properly accompanied by an employee
anywhere the workplace at all times.
4. CCTV cameras are to be installed in the workplace and ensure that
the whole workplace is properly covered.
5. Establish code words to alert coworkers and supervisors that
immediate help is needed.
6. Require delivery people to wait in a single area and to make
deliveries at that one location only.
7. Locks installed are regularly replaced.

Housekeeping
Guarantees the workplace into a neat and good environment to work on.

1. Respect Do not Litter policy at all times.


2. Eating and drinking should be done away from any electrical
equipment.

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3. Employees are expected not to leave their workstations messy and


observe cleanliness in the vicinity.

PRODUCT

E-Cart: ASSET
Guarantees that any intellectual property, rights, patents and any intangible asset owned, produced, and used

theft, misuse, piracy, and/or una

Because Technocart Corporation is the pioneer organization to offer a


revolutionizing products that aides and adds value to supermarkets, the
protection of intellectual properties of Technocart Corporation will be
governed by the Republic Act 8293 also known as Intellectual Property Code
of the Philippines. The following are to be observed by the organization to
ensure the safety and protection of the e-Cart ASSET product:
1. Register the intellectual properties with the Intellectual Property
Office of the Philippines.
2. File copyright protection with the Copyright Division of the National
Library of the Philippines.
3. Such documents acquired are to be kept and stored safely.
Technocart Corporation affords the following exclusive rights as per
Section 177 of Republic Act 8293: Intellectual Property Code of the
Philippines.
177.1. Reproduction of the work or substantial portion of the work;
177.2 Dramatization, translation, adaptation, abridgment, arrangement
or other transformation of the work;

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177.3. The first public distribution of the original and each copy of the
work by sale or other forms of transfer of ownership;
177.4. Rental of the original or a copy of an audiovisual or
cinematographic work, a work embodied in a sound recording, a
computer program, a compilation of data and other materials or
a musical work in graphic form, irrespective of the ownership of
the original or the copy which is the subject of the rental; (n)
177.5. Public display of the original or a copy of the work;
177.6. Public performance of the work; and
177.7. Other communication to the public of the work (Sec. 5, P. D. No.
49a)
Intangible assets such as patents, and any other intellectual property
rights may have been legally complied and protected by Technocart
Corporation, but notwithstanding the fact that people are more inclined with
the fast evolving technology, such assets are still likely to be illegally and
unlawfully be used and that this risk cannot, to the very extent, could be
absolutely circumvented by the corporation. Still, it is the responsibility of the
management to lessen the risk. Confidentiality clauses are to be emphasized
and signed in the agreement with the people responsible in doing the
systems and designs.

LEGAL
The Technocart Corporation is to keenly observe all legal jurisdictions,
implications and legalities of sustaining a business here in the Philippines. All
economic activities of the organization must be made under the recent and
present laws under the Republic of the Philippines.
It is to take into considerations all of the general rules set that may
affect the conduct of business of the corporation. The rules and provisions

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that the entity has to comply with in good faith are the following but not
limited to:
Civil Code Book IV: Obligations and Contracts
Batas Pambansa Bilang 68: Corporation Code of the
Philippines
The laws on sales, agency and credit transactions
Republic act 2031: The negotiable instruments law

Business Registration
For regulatory purposes and to avoid any legal problems, Technocart
Corporation is required by the state to be registered first before the
commencement of its economic activities. Noncompliance to business
registration renders the business illegal. The set of requirements which must
be conformed with are as follows:

1. Securities and Exchange Commission (SEC) Registration


Required Documents for Applicant: Corporation

Name Verification Slip


Articles of Incorporation and By-laws
Treasurers Affidavit/Authority to Verify Bank Account
Bank Certificates of Deposit (notarized in place where bank is located)
Registration Data Sheet
Clearance from other government agencies
Written undertaking to change corporate name

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2. Business Registration at Local Government

Local Government - Business Registration Requirements

Business License Applications / Assessment Form


Community Tax Certificate
Barangay Business Permit
Tax Identification Number
Fire Safety Inspection Certificate
Building Permit
Environmental Compliance Certificate
Zoning Clearance
Sanitary Permit

3. Bureau of Internal Revenue (BIR) Registration

Technocart Corporation must submit fully furnished BIR Form 1903 Application for Registration for Corporatio

4. Social Security System (SSS) Registration

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The President of Technocart Corporation should accomplish and sign the SS Forms R-1 (Employer Registration)

5. Philippine

Health

Insurance

Corporation

(PhilHealth)

Registration

To provide social health insurance coverage to employees, Technocart Corporation must register Employer Da

6. Home Development Mutual Fund (HDMF) Registration

Employer Registration
Checklist of Requirements
Employers Data Form (EDF) (HQP PFF-002)
Specimens Signature Form (SSF) (HQP-PFF-002)
Valid ID
SSS Certification
Certified true copy of SEC Articles of Incorporation and By-Laws, and Business or Mayors Permit
TAXATION
One of the three inherent powers of the state is taxation. Taxation is a
power by which an independent state, through its law-making body, raises
and accumulates revenue from its inhabitants to pay the necessary expenses
of the government. It is also a process or act of imposing a charge by
governmental authority on property, individuals or transactions to raise
money for public purposes. Taxation is a means by which the Sovereign State
through its law-making body demands for revenue in order to support its
existence and carry out its legitimate objectives.

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Republic Act 8428 otherwise known as the National Internal Revenue


Code (NIRC) of 1997 embodies all laws legislated pertaining to the national
government taxes.

Tax Implications
Technocart Corporation, a domestic corporation organized in the
Philippines under Philippine law, shall execute the performance of all tax
obligations levied upon by the government regulating body and taxing
authority. It is the duty of Technocart Corporation to justly report right taxes
enumerated by the taxing authority to contribute for the development of
nation.
BIR Form 2303 Certificate of Registration furnishes all tax dues and
the related compliance requirements. Technocart Corporation will execute the
following obligations imposed by the government authority:
1. Registration Fees
Annual registration fee of P500.00 accompanied with BIR
Form 0605 is to be furnished yearly on or before the last day of
January of the succeeding year after the initial registration.
2. Income Tax
Technocart Corporation, as a starting corporation, is subject
to the following income taxes:
a. Normal Corporate Income Tax (NCIT)
Technocart Corporation is required to accomplish BIR
Forms 1702Q for the first three quarters each year (On or before
the 60th day after the end of the quarter), and 1702 for annual
tax return (On or before the 15th day of the fourth month of the
succeeding year). A tax rate of 30% is applied to the Net Taxable

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Income determined by the regulatory government body and tax


rules set by the NIRC.
b. Minimum Corporate Income Tax (MCIT)
Pursuant to Section 27(e) and Section 28 (a2) of the NIRC,
Technocart Corporation shall be taxed with 2 % based on the
gross income and not on the taxable income after operating
expenses if the corporation:
i.
ii.

Have been in its fourth year of operation, and


Incurred a net loss or zero taxable income, or a normal
income tax that is lesser than minimum income tax.
Per BIR Form 1702, MCIT can be computed by multiplying

the Total Gross Income subject to MCIT to 2%. Any excess of the
minimum corporate income tax over the normal income tax shall
be carried forward and credited against the normal tax
immediately for three (3) succeeding taxable years.
Technocart Corporation has to observe that any amount of
excess of MCIT shall be recorded in the corporations books as
an asset as Deferred charges, MCIT. Such amount shall be
removed and deducted from Deferred charges, MCIT account
by a debit entry to Retained Earnings account since this tax is
not allowable as deduction from the gross income, it being an
income tax. (Rev. Reg. 9-98)
Payment of MCIT is mandatory be paid quarterly as per
BIR Form 1702Q every 60th day after the end of every quarter.
Annual income tax return as per BIR Form 1702 has to be paid
on or before 15th day of the fourth month of the succeeding year.
3. Withholding Taxes

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The withholding tax system is one of the methods that the


government uses to hasten the collection of taxes. The cost of
collecting taxes is brought to a minimum with the help of private
individuals and corporations as withholding tax agents. Withholding
tax systems improve the governments cash flow because of
advance collection of taxes.
Section 80(a) of the National Internal Revenue Code, as
amended provides Technocart Corporation, as a withholding agent,
be liable for the withholding and remittance of the correct amount
of tax required to be deducted and withheld.
a. Final Withholding Tax
Under the final withholding tax system, the amount of
income

tax

withheld

by

Technocart

Corporation

will

be

constituted as a full and final payment of the income tax due


from the payee on the said income.
And as a withholding agent, Technocart Corporation is
liable to remit the tax together with the fully furnished BIR form
1601-F on or before the 10th day of the month following the
month in which withholding was made (January to November monthly)and 31stday of the following year (December - annual)
using BIR form 1604CF.
b. Withholding Tax on Compensation
Technocart Corporation has to deduct and withhold taxes
on compensation paid to each employee, except those individual
whose total compensation income does not exceed the statutory
minimum wage, by the time they receive their compensation.
Remittance is to be made on or before the 10 thday of the
month following the month in which withholding was made

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(January to November - monthly) using BIR Form 1601C and on


31stday of the following year (December - annual) using BIR form
1604CF.
c. Expanded Withholding Tax
This obliges the Technocart Corporation to withhold any
kind of income payments to payee that are subject to expanded
withholding taxes or those income payments not subject to
withholding taxes but subject to income tax.
Expanded

withholding taxes are

remitted and

paid

accompanied by BIR Form 1601E on or before the 10th day of


the month following the month in which withholding was made
(January to November - monthly), and on or before January 15 of
the succeeding year. Annual return is paid on or before March 1
of the year following the calendar year (annual) using BIR form
1604E.
4. Value-Added Tax (VAT)
A Value-added tax (Vat is a form of consumption tax imposed
on each sale, barter, exchange, or lease of goods, properties, or
services in the course of trade or business in the Philippines. From
the standpoint of the buyer, it is a tax on the purchase price. To the
seller, it is a tax only on the Value-added to a product or service
sold. It is designed to be borne by the consumers, with sellers
acting merely as tax collectors, thus making value-added tax an
indirect tax. (Transfer and Business Taxation, 2013, Edwin G.
Valencia)
Technocart Corporation must be registered as a VAT entity
because it expects to exceed and realize more than one million nine
hundred nineteen thousand five hundred pesos (Php 1, 919,500.00)

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sales in its first year of operations. It also has to pay an annual


registration fee of five hundred pesos (Php 500.00).
A Vat Payable or Excess Input Tax may result from an Output
Tax (12% of Sales) reduced by Input Tax (12% of purchases from
VAT registered entities). Any excess input tax shall be carried over
to the quarter.
The following rules are followed in accounting for input vat on
purchases of depreciable capital goods which are treated as
depreciable assets under Section 34(f) of the tax code:
a. If the aggregate acquisition cost per month excluding VAT is
Php1, 000,000 and below, the related input vat is deductible
at full amount from the output vat.
b. If the aggregate acquisition cost per month exceeds Php1,
000,000 (exclusive of vat) regardless of the acquisition cost
of each capital goods, the related input vat shall be spread
over 60 months or its useful life, whichever is shorter.
Using BIR form 2550M Value-added tax is payable on or
before the 20th day of the succeeding month (first two months
monthly return) and BIR form 2550Q on or before the 25th day of
the succeeding quarter (quarterly return).
Actual Input Vat (AIV) that are attributable to vat taxable
sales of goods and services to the Government or any of its political
subdivisions, instrumentalities/or agencies, including governmentowned or controlled corporations (GOCCs) shall not be credited
against the output taxes arising from sales to non-government
entities. The creditable input vat for sales to government would be
the 7% Standard Input VAT (SIV) and a 5% final withholding vat
based on sales to the government. The AIV is weighted against the
standard input vat (SIV). The difference between AIV and SIV is

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treated as other income if the SIV is greater than the AIV. The
difference is treated as an addition to the cost of sales or operating
expense if the AIV is greater than the SIV.
5. Improperly Accumulated Earnings Tax (IAET)
Technocart Corporation, as a closely-held corporation, is also
subject to Improperly Accumulated Earnings Tax (IAET) of 10% of
the corporate Improperly Accumulated Earnings. The IAET is an
additional tax to the regular corporate income tax imposed on
corporations. Under the law, a corporation becomes liable to the tax
if its profits and earnings are improperly accumulated or retained,
instead of being distributed as dividends to the stockholders. In this
sense, IAET is also regarded as a corporate penalty tax.
Other Obligations
Technocart Corporation has its obligations to appropriately deduct and
justly remit employees contributions in Social Security Systems, Home
Development Mutual Fund (HDMF/Pag-ibig) and PhilHealth. As an employer,
Technocart Corporation is also obliged to pay its own rightful amount of
contribution to the following government agencies:
1. SSS Contributions

Due Dates of Contribution


SSS Form R-3 and R-5
th
If the 10
Payment Deadline
digit of the
13-digit ER
number ends
in:
1-2
10th day of the following
month
3-4
15th day of the following
month
th
5-6
20 day of the following

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7-8
9-0

month
25 day of the following
month
last day of the following
month
th

2. HDMF Contributions

Schedule of Payments
MCRF HQP-PFF-053
First Letter
Due Date
ofEmployer/Busin
ess Name:
A-D
E-L
M-Q
R-Z, numeral

10th -14th day of the following


month
15th 19th day of the following
month
20th 24th day of the following
month
25th last day of the
following month

3. PhilHealth Contributions

Submission of Forms
RF 1 Employers Quarterly Remittance
Report
Applicable
Deadline of Submission
Quarter
January to March

On or before April 15

April to June

On or before July 15

July to September

On or before October 15

October to
December

On or before January 15 of
the succeeding year

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Schedule 16: Organization Expense


WAREHOUSE
Registration Fee
BIR Registration
DTI
SEC Name Verification Slip
Barangay Clearance
Mayors Permit
Special Books of account

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Documentary stamp tax


Community Tax Certificate
Environmental Compliance Certificate
Building and Sanitary Permit Fee
Zoning Certificate Fee
Fire Clearance Fee
TOTAL
OFFICE
SEC Fees
Municipal license
Barangay Clearance
Mayor's permit
Sanitary
Health certificate
Police clearance
Garbage fee
TIN sticker
Mayors clearance
Fire
TOTAL

TOTAL

138,80
Organization Expense

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