Listed below is a detailed summary of the bureaucratic and legal hurdles an entrepreneur must overcome in order to incorporate and register a new firm, along with their associated time and set-up costs. It examines the procedures, time and cost involved in launching a commercial or industrial firm with up to 50 employees and start-up capital of 10 times the economy's per-capita gross national income (GNI). The information appearing on this page was collected as part of the Doing Business project, which measures and compares regulations relevant to the life cycle of a small- to medium-sized domestic business in 183 economies. The most recent round of data collection for the project was completed in June 2010. No
| Time to Complete
| Associated Costs
| Verify and reserve the availability of the company name with the Securities and Exchange Commission (SEC)
The availability of the proposed company name can be verified via the SEC's online verification system at no charge. Reservation of the name, once approved by the SEC, costs Php40/month for the first 30 days. The company name can be reserved for a maximum of 120 days for a fee of PHP 120, which is renewable upon expiration of the period.
| 1 Day
| PHP 40
| Deposit paid-up capital in the Authorized Agent Bank (AAB) and obtain bank certificate of deposit
The company is required by law to deposit paid-up capital amounting to at least 6.25% of the authorized capital stock of the corporation. This paid-up capital must not be less than PHP 5,000. Some banks in Manila charge a fee up to PHP 105 for each certificate of deposit.
| 1 Day
| No Charge
| Notarize articles of incorporation and Treasurer's affidavit with notary public
According to Section 14 and 15 of the Corporation Code, articles of incorporation should be notarized before filing with the SEC.
| 1 Day
| PHP 500
| Register company with the Securities and Exchange Commission
Comments: The company can register online through SEC i-Register but must pay on site at the SEC. The following documents are required for SEC registration:
a. Company name verification slip;
b. Articles of incorporation (notarized) and by-laws;
c. Treasurer's affidavit (notarized);
d. Statement of assets and liabilities;
e. Bank certificate of deposit of the paid-in capital;
f. Authority to verify the bank account;
g. Registration data sheet with particulars on directors, officers, stockholders, and so forth; h. Written undertaking to comply with SEC reporting requirements (notarized); i. Written undertaking to change corporate name (notarized).
The SEC Head Office issues pre-registered TINs only if the company’s application for registration has been approved. The company must still register with the Bureau of Internal Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, obtain and stamp sales invoices, receipts and the books of accounts.
| 3 Days
| PHP 2,665
| Payment of documentary stamp taxes (DST)
The company must pay DST on the original issuance of shares of stock. The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of such shares of stock. This payment with the BIR should be made on the 5th of the month following registration with the SEC.
| 1 Day
| PHP 4,170
| Obtain community tax certificate (CTC) from the City Treasurer's Office (CTO)
To obtain a Barangay clearance, a company must obtain a community tax certificate. The company is assessed a basic and an additional community tax. The basic community tax rate depends on whether the company legal form is a corporation, partnership, or association (PHP 500 or lower). The additional community tax (not to exceed Php 10,000.00) depends on the assessed value of real property the company owns in the Philippines at the rate of Php2.00 for every Php5,000.00 and on its gross receipts, including dividends or earnings, derived from business activities...
Please join StudyMode to read the full document