Acquiring Legal Status of a Business Firm under Sole Proprietorship in the Philippines
Starting a business in the Philippines requires series of procedures and steps, and there are different processes of registration depending on the form of business the entrepreneur ventures.
This research report will talk about how to acquire the legal status of a business under the business form – sole proprietorship, discussing in detail the steps involved. As Lawrence Gitman defines sole proprietorship, it is a business that is owned by one person and operated for his or her own profit. This form of organization appeals to entrepreneurs who enjoy working independently. (Gitman, 2012)
As an entrepreneur starts his business, he must come across different offices and agencies that will require several supporting and valid documents. The requirements must be secured before heading to a certain government agency. Moreover, the steps and processes to be discussed must be taken successively in order to complete the legality of one’s business. The following are the different government agencies and offices that must be dealt with in attaining legal status of a sole proprietorship business:
1. DEPARTMENT OF TRADE AND INDUSTRY
The entrepreneur’s first step is to register in Department of Trade and Industry the proposed name of the business that he will establish in the Philippines. This agency will provide the Certificate of Registration for the business. Here are the requirements for the business name registration (see Appendix A.1 for checklist of requirements): A. For original application, single proprietor, Filipino citizen - Applicant must be at least 18 years old
- Duly filled-up Application Form (BTRCP Form No. 16A)
- Proof of Citizenship (photocopy of any of the following: Philippine Regulatory Commission/ PRC ID, Voter’s ID, Passport or Birth Certificate) B. If filer is other than the applicant
- Letter of Authorization from the applicant
- Photocopy of valid ID card (bearing the signature of the applicant) If the applicant secured the said requirements, he may now be able to proceed in the registration of Business Name: (1)The applicant must get an Application Form (see Appendix A.2 for Business Name Application Form) from the DTI. This form may also be downloaded from the official website of the agency. (2)The form must then be filled-up or duly accomplished before submitting it together with other supporting documents. (3)After presenting the Application Form with TRN, the applicant must pay the corresponding fees according to territory. (4)Registration is completed by claiming the Business Name Certificate of Registration.
The registered Business Name will expire after 5 years. Thus the owner of the business is obliged to renew the application.
In addition, the registration fee that the applicant must pay depends upon the territory where he will set up his business. Those who register must pick one of the following territories (see Appendix A.3 for territories): * Barangay
Registration Fee: Php 200.00 + 15.00 Document Stamp
* City/ Municipal
Registration Fee: Php 500.00 + 15.00 Document Stamp
Registration Fee: Php 1000.00 +15.00 Document Stamp
Registration Fee: Php 2000.00 +15.00 Document Stamp
Through the territorial claim, the Business Name will only be exclusive for the area where it was registered and can have branches only within the territory. However, other businesses outside of the area have the right to use the same Business Name. If the owner would want to spread out its business and territorial range (e.g. the business was registered within the Barangay and it will expand to the area within the City/Municipality), it must register again in the Department of Trade and Industry and pay higher fees. The DTI’s main purpose is to protect business names from being used by other individuals and companies. And if by any chance, an...
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