Business finance

Starting a business in the Philippines

Business agencies concerned with business operations

Bangko Sentral ng Pilipinas Administers through the monetary board (MB) the monetary, banking and credit systems of the country. Securities and exchange commission Handles the registration, licensing, regulation and supervision of all corporations and partnerships organized in the philippines.

Department of trade and industry Responsible for industrial development promotion of investments , development of small and medium enterprises, expansion of exports and integrated delivery of DTI services to the regions and proveinces. Board of investments (BOI) and export processing zone authority (EPZA) are among the agencies of DTI.

+ Department of Labor and Employment Implements labor policies and enforces labor laws.

+ Department of Finance Handles the collection of taxes, issuance, implementation or enforcement of tax laws and negotiation of loans with foreighn governments and banks.

Registration of business name

Aside from the fact that no other existing business must have the same name, the requirements at the DTI are : I. the applicant must pay the registration or processing fee of P121.00, then procure the corresponding application form. II. the applicant must file the duly accomplished application form with the Department of Trade and Industry Provincial Office where the business is located. III. applicant must submit 2 copies of passport size pictures of himself.

IV. In case applicants is a natural person, he must be 21 years old and above. V. If applicant states that he is a filipino citzen but his surname sounds foreign , he must submit 2 xerox copies of any of the following: A. if natural born, voters ID or birth certificate B. if by election, (affidavit of election and oath of allegiance or ID issued by CID) C. if by naturalization ( Certificate of naturalization) D. if by marriage to a filipino ( marriage contract)

If applicant is an alien retailer, he must submit 2 photocopies of : 1. alien certificate of Registration (ACR) update for current year. 2. if business started prior to december 28, 1968, BOI certificate of Authority If applicant is a alien wholesaler, the requirements are the two photocopies of : 1. ACR and board of investment registration permit. If the applicant is a processor or manufacturer , submit 2 copies of 1. ACR 2. BDT permit 3. financial statement showing capitalization not exceeding P5 000.

In case of Juridical persons (corporations, partnerships, associations, etc.) subimt to copies of : 1. if juridical persons is wholly owned by filipino corporation or partnership. -- articles of incorporation or partnership --SEC Certificate of Registration --Board resolution authorizing person to sign application 2. if corp. or partnership is fully owned by aliens or the capital of which is more than 30% owned by aliens --articles of incorporation or partnership --SEC Certificate of Registration --BOI certificate --board resolution authorizing persons to sign application

3. In case of cooperatives, etc., applicants must submit --articles of incorporation --by-laws --certificate of registration issued by the ministry of agriculture. 10. Incase an applicant maintains a business with branches, he nust register the main as well as the branches.

XI. If the requirements are complied with, the provincial trade officer/ in charge signs at back of the application; then, the records clerk transmits application (quadruplicate copies of TRD , DBT, DTI; records clerk fills up and issues to applicant an acknowledgement receipt) stating date of receipt, name of applicant and the proposed business name. Record clerk prepares a letter of transmittal - provincial director signs and attached applications - provincial directors office furnishes DTI regional director copy of transmittal

Organizing a sole proprietorship

Sole proprietorship is the easiest to organize among the major forms of business organization. Registration is done at the DTI where required documents are submitted. The applicant pays a fee of P121.00.
Requirements are: applicant must be of majority age 2 passport size pictures of himself if an alien, submit the following: > alien certificate of registration if any. > accomplished DTI form no. 17 under R.A. No. 7042 > a written appointment of filipino resident agent > authority to verify bank accounts/ bank certificate of deposit > proof of inward remmitance of foreign currency for non-resident alien and bank certificate of deposit for retail

Organizing a partnership

Organizing a partnership

Partners should register their partnership at the office of security and exchange commission.

The following are the pre-registration requirements: 1.1 standard requirements of partnership a. verification slip b. articles of partnership (3 copies) c. undertaking to change name (3 copies) d. registration data sheet (3 copies) e. if it is a limited partnership , the name must reflect the word Limited. f. clearance from government agencies concerned are also applicable in forming partnership g. requirements for corporation with alien incorporators are also required in partnership with foreign contributors

1.2 extra ordinary requirements of partnership a. certificate, license, PTR of CPAs, lawyers, engineers, real state brokers, custom brokers, etc. for practice of profession b. if the nature of business of partnership is management consultancy, submit the Personal Info. Sheet of Partners (PIS) duly signed and under oath . c. partnership with foreign investors: > all the standard requirements plus alien certificate of registration (ACR) or immigrant certificate of residence > Income tax return of filipino partners duly accomplished. > a BOI certificate of authority should be added if foreign investments exceed 40% of the capital

BOI form 504 duly accomplished is required if foreign investors do not exceed 40%of the capital contribution.  xerox copy of the passport of non resident partners if the document is signed in the philippines  proof inward remittance of non resident alien partner  if the document is signed outside the philippines, the same must be duly authenticated by the Philippine Consular Office of the place where it is executed.

General steps in registration

1. secure verification slip and present it for checking with SECs Record Division 2. show documents to corporate and legal department (CLD) and get approved for payment stamped. 3. proceed to cashier for payment of filing fee. 4. submit 3 copies of documents to the receiving unit. 5. documents will go to the CLD for processing

6. It is then foreword to the supervising commissioner of CLD for signature of the certificate of registration of partnership 7. Certificate of registration is ready to release. Claim it at the releasing unit records division.

Organizing a corporation

Process of organizing a corporation generally consists of 3 stages which normally require the aid of legal, competent advisers.

Promotion incorporators make preliminary arrangements to set up a tentative working conditional to solicit subscriptions. 2. Incorporations process of formalizing the organization of the corporation . Procedures include :

1.

> drafting of the articles of incorporation which must be duly executed. > filing of the articles of incorporation with the SEC together with the statement of the assets and by laws. > after the required fees have been paid, the SEC issues a certificate of incorporation. > commencement of the business

Classification of corporations the corporation code of the philippines classifies private corporations into stock and non stock corporations. Stock corporation ordinary business corporation created and operated from the purpose of making a profit w/c maybe distributed in the form of dividends to stockholders. Non-stock corporation do not issue stock and distribute dividends to their members.

Other classification of corporations 1. corporation aggregate is a corporation consisting of more than one member 2. corporation sole special form of corp. usually associated with the clergy. Also a religious corp. because it has a succesor of a bishop. 3. ecclesiastical corporation organized for religious purposes. 4. lay corporation either eleemosynary or civil. 5. eelemosynary corp. one established for devoted to charitable purposes or those supported by charity.

6.Civil corp. established for business or profit. 7.domestic. Corp. one incorporated under the law under the law of the philippines. 8. foreign corp. organized under the law 9.De jure corp. corp. existing in fact but not in law. 10.De facto corp. existing in fact but not in law.

11. close corp. limited to selected person or members of a family. 12. Open corp. open to any person who may wish to become a stockholder. 13. parent or holding corp. related to another corp. that it has the power either, directly or indirectly, to elect the majority of the directors of such other corporation.

14, subsidiary corp. related to another corp. that the majority of its directors can be elected either, directly or indirectly. 15. Affiliated corp. related to another by owning are being owned by common management. 16. Public corp. formed or organized for the government of a portion of the state. Have their purpose of the general good and welfare. 17. Government owned corp . organized by the government which is the majority stockholder. This is not private. 18. Corporation by prescription exercised corporate powers for indefinite period.

The ff. are the other requirements for registering corp. >articles of incorporation >treasures affidavit > statement of assets and liabilities > bank certificate > authorization of SEC > personal information sheet > written undertaking by a resident shareholder to assume > unpaid subscription

>>> express lane

The SEC has devised an express lane for processing incorporation papers for common lines of business, subject to certain limitations. Processing of incorporation papers takes only one working day. The certificate of registration is issued on the same day.

Steps in registration of corporations

Express lane the applicant must : 1. verify proposed corporate name with Record Division 2. Procure an express lane form 3. present accomplished express lane forms or documents at CLD for checking of financial and legal aspects 4. proceed to cashier for payment 5. resubmit all documents to the receiving clerk at the Express Lane Unit for processing

The regular procedure: 1. secure verification slip and present for checking 2. prepare all documents required to be submitted as per brochure 3. get approved for payment stamped on article of incorporation from corporate and legal department 4. proceed to cashier for payment

SEC schedule of fees Stock corporations: filing fee articles of inc. 1/10 of 1% of the authorized capital stock not less than P200 legal research fee not less than P100.00 by law (fixed) P100.00 Non-stock corp.: filing fee articles of inc. P110.00 by laws P110.00 membership P150.00

Regular requirements for foreign corporations

Place of registration SEC Requirements for registration Certificate issued

a. Article of co partnership SEC certificate b. Filled SEC registration form a. SEC certificate Certificate of registration b. Article of co partnership of business name Certificate of registration of business name Mayor s permit and license to operate

DTI

City or municipal hall

BIR

a. SEC certificate A. BIR registration no. b. Article of co partnership B. VAT certificate no. c. Partnership tax account number. a. Filled SSS application form b. List of employees A. SSS certificate of membership B. SSS employer ID no.

Social security system

Opening a branch, applicants must submit this to board of investments: >authenticated copy of foreign corporations article > background data about applicant > detailed description of proposed business activity

Documents required by the SEC: 1. foreign corporations certified copy of its board of directors resolution, authorizing the opening of a branch and appointment of attorney in fact. 2. Certificate of reciprocity 3. statements under oath by the president or any duly authorized officer of the corporation are solvent and in sound financial standing 4. audited financial statement 5. copies of the articles of the incorporation and by laws, certified in accordance with law and translated in english. 6. certificate of authority from concerned government agencies ( BOI , CB, etc.)