Suppose you plan to open a business or are already engaged in one. In that case, it is essential to register your business with the necessary government agencies to keep your business legitimate and legal. Only attempt to run a business with the essential certificate of business registration and other permits on the pretense of doing shortcuts. You don’t want the police, barangay officials, and DTI appearing at your business to shut you down. Be a legit business and do everything legally.
Business Registration Requirements
It summarizes business registration requirements and procedures to obtain a business registration certificate if setting up a business.
1. Obtain a bank certificate of deposit of the paid-in capital – Some banks may not charge any fee, while fees from other banks may vary, going up to P105 per certificate.
2. Verify the availability of possible business names with the Securities and Exchange Commission (SEC) – P40.
3. Register incorporation with the SEC – Filing fees: articles of incorporation – P1,000; issuance fee – P1,000; bylaws fee – P510; stock and transfer registration – P470; membership book registration – P75.
4. Obtain a community tax certificate (CTC) – P500 (This is needed to apply for barangay clearance).
5. Apply for a barangay (district) clearance – P800.
6. Obtain Mayor’s Permit or Municipal License to operate at the Licensing Section of the Mayor’s/Municipal Office – P5,400 plus 0.2% of capital, including Mayor’s permit, sanitary permit fee, permit fee for businesses engaged in retail, and garbage collection fee.
7. Inspection by the Mayor’s Office of your business.
8. Buy special books of account from a bookstore and then register for taxes at the Bureau of Internal Revenue (BIR) – Around P1,115, depending on the cost of accounting books.
9. Payment of documentary stamp taxes – P1 for every P200 capital.
11. Print receipts and invoices at printing shops accredited by the BIR – Around P3,000 to P5,000 for a minimum printing of 25 booklets.
12. Submit receipts and invoices to BIR for approval; receipts, invoices, and books of accounts are to be stamped by BIR.
13. Initial and complete registration with the Social Security System (SSS) and Philippine Health Insurance Company (PHIC).
Since most of the abovementioned are straightforward, this article will focus more on registering the business in DTI and the requirements for BIR registration.
How to Register Business in DTI
1. Prepare the business name you registered with SEC. DTI advises that your business name should be used concerning your business, not your actual name.
2. You can also confirm the availability of your business name by searching on the official DTI website. It is advisable to prepare more than one business name idea.
3. Fill out the online registration form at DTI’s Business Name Registration System (BNRS). Take note of the reference code provided that will be used in all BNRS transactions.
4. After completing the form, follow the instructions and pay the necessary registration fee within seven calendar days from the application date. Payment can also be made through GCash, PayMaya, or a credit/debit card.
The territorial scope of the registration fee:
- Barangay – P200
- City/Municipality – P500
- Regional – P1,000
5. Upon payment confirmation, your business name will be successfully registered. You can now go to Transaction Inquiry, accept the Terms and Conditions, and input the reference code previously provided. You can then download the certificate.
You also have the option to apply for DTI registration in-person or over-the-counter. All you need to do is to go to your local DTI office or Negosyo Center. Submit all the DTI business registration requirements. Pay for the registration fee, and once the DTI approves the business name, it will issue a Certificate of Business Name Registration.
How to Register Business in the BIR
1. Prepare the requirements for BIR registration:
- DTI Certificate of Registration
- Barangay Business Clearance
- Mayor’s Permit
- Certificate of Land Title (if owned) or Certificate of Lease (if rented)
- Government-issued identification (driver’s license, SSS or UMID card, passport, etc.)
2. Download and complete BIR Form 1901, to be accomplished in 3 copies.
3. Submit the completed application form to your Revenue District Office (RDO). The RDO is where your business is located and has jurisdiction over the business.
4. Pay the registration fee of P500 plus P30 for the Proof of Payment of Annual Registration (ARF) Fee. Payment can be made through any BIR-accredited bank. The bank will provide a BIR payment form, which is then submitted to the bank with your Documentary Stamp Tax on Lease. After payment, submit a photocopy of the BIR payment form and other documentary requirements.
5. Claim the Certificate of Registration (COR). However, before claiming the COR, clarify from your RDO if they require new business owners to attend a seminar about filing taxes. Upon declaring the COR, make sure you are provided with the “Ask for Receipt” wall sign.
6. As mentioned beforehand, buy and register your books of account. It becomes your original record for all business transactions. There are three types of books of accounts:
- Manual Books of Account – This includes columnar books, ledgers, and journals where all business transactions are manually (handwritten) documented.
- Loose-leaf Books of Account – All journals and ledgers are printed instead of handwritten. Bookkeeping using spreadsheets such as Microsoft Excel can be considered loose-leaf books of account.
- Computerized Books of Account – A computerized system or bookkeeping program typical for businesses with complex operations.
Register the books of account by filling out and submitting BIR Form 1905 along with the books of account at the RDO where your business is registered.
7. BIR requires businesses to have Authority to Print (ATP) receipts (for companies offering services) or commercial invoices (for businesses selling goods). Fill out and submit three copies of BIR Form 1906 at the RDO, a sample of principal or supplementary invoices, and a copy of your COR to secure an Authority to Print. The ATP usually takes a week to be released.
Upon release of your ATP, you can check with your RDO or on the official BIR website for accredited BIR printers in your local area. The printing and eventual release of official receipts or invoices take around two weeks, depending on the availability of the printing press.
After going through all the hoops and paperwork, your business is now registered and legal. You are ensured that your business name is yours alone, and no one else can use it. You can now focus on building up and growing your business knowing that you can legally operate.
The key to starting a successful business venture is having all your ducks in a row—no more than obtaining your Certificate of Business Registration. Sure, this process can seem daunting and have you feeling out of your depth, but there’s no need to panic! With the information in this blog post, you have everything you need to know to execute your Certificate of Business Registration quickly and efficiently. And with that knowledge under your belt, you can put all other elements into motion for launching that successful business on the way to raking in moolah like never before! So go forth – registration documents in hand – and watch your dreams come true!