ANSWER THE FOLLOWING QUESTIONS, DEFINE AND ATTACH SUPPORTING DOCUMENTS.
WHAT FORM OF BUSINESS THAT IS BEST FOR YOUR NEEDS?
The optimal business structure is based on personal needs, including financial requirements,
tolerance for risk, and growth potential. It is advisable to seek the advice
of business advisors, lawyers, and accountants in deciding on this. (1) Sole
proprietorships, partnerships, limited liability companies (LLCs), corporations,
and cooperatives are some of the most common types of business entities. (2)
Each form has varying implications for taxes, liability, capital raising, and paperwork. (1)
Business Structures
Sole Proprietorship: This is the simplest form, owned and controlled by one person,
merging personal and business finances without liability protection. It is easy to set up with
minimal fees, but the owner is personally liable for business debts.
Partnership: This involves two or more individuals who share responsibilities. There are
general partnerships, where all partners have unlimited liability, and limited partnerships,
offering limited liability to some partners.
Limited Liability Company (LLC): An LLC separates liability from ownership, protecting
personal assets from business debts and lawsuits. LLCs can choose between pass-through or
corporate taxation.
Corporation: This is an independent legal entity that can raise capital by selling stocks.
Corporations offer strong protection from personal liability but involve more complex
registration and operational processes. They are subject to corporate tax, and profits may be
taxed twice.
WHAT ARE THE REQUIREMENTS TO REGISTER A BUSINESS NAME?
If a business uses a name different from the owner's true name, it must be
registered with the Department of Trade and Industry (DTI). This registration is
required under Republic Act 3883, also known as the Business Name Law, and is
necessary to obtain a business or Mayor's Permit. Registration prevents others from using
the same name. Any Filipino citizen 18 years or older can register a business name,
and it can be done online or in person at a DTI Regional or Provincial office. (4)
To register a business name online, the DTI Business Name Registration Portal
requires information about the business owner, the business's territorial scope,
dominant name, descriptor, and business name. (3) Valid IDs are required when
registering through a regional or provincial DTI office, along with a duly accomplished and
signed application form. (4) Non-Filipino citizens can also register a business name if
they are at least 18 years old and authorized to do business in the Philippines. DTI
business name registration applies only to sole proprietors and cannot include "company,"
"corporation," "incorporated," or "cooperative". (3)
To register a business name in the Philippines, follow these general steps:
Department of Trade and Industry (DTI) Registration: Registering with the DTI
provides a business with a legal identity and the right to use its chosen business name. This
can be done online via the DTI Business Name Registration Service.
Requirements for DTI Registration:
Completed application form.
Valid government-issued ID of the business owner.
For non-Philippine nationals: Clear certified copy of the Alien Certificate of
Registration and Certificate of Registration for Sole Proprietorship or Certificate of
Authority to engage in business in the Philippines.
For recognized refugees or stateless persons: Clear certified copy of the Certificate of
Recognition issued by the DOJ-RSPPU or presentation of the original certificate and
submission of a duplicate copy.
Registration Fees: The fees depend on the scope of the registration:
Barangay level: ₱200.
Regional level: ₱1,000.
National level: ₱2,000.
Scope of Registration:
Barangay level is suitable for small stores operating within a limited vicinity.
National level is required for freelancers or businesses servicing clients nationwide
WHO SHOULD GET A TIN AS REQUIRED BY LAW TO PAY TAXES IN THE
PHILIPPINES?
Anyone who earns income or compensation from employment is required to have
a Tax Identification Number (TIN). Employers typically require a TIN from new hires to
ensure proper tax withholding and remittance to the Bureau of Internal Revenue (BIR). (5) A
TIN confirms that an individual is a registered taxpayer and is used to transact with various
institutions. Even unemployed citizens and students older than 18 can obtain a TIN.
(6)
The following individuals and entities are legally required to obtain a TIN:
Employees: All individuals earning income, whether through regular employment or
self-employment, including both Filipinos and resident aliens working within the
country.
Self-Employed Individuals: Professionals, freelancers, and individuals engaged in
independent trades or businesses.
Corporations and Partnerships: All corporations, partnerships, joint ventures, and
other entities operating within the Philippines.
Non-Resident Aliens: Individuals who are not residents of the Philippines but earn
income from Philippine sources.
Estates and Trusts: Estates and trusts that are taxable under the law.
Legal Basis: Section 236 of the National Internal Revenue Code (NIRC) of 1997
mandates that any person required to make a return, statement, or other document
must be assigned a TIN for tax purposes
WHAT ARE THE REQUIREMENTS TO REGISTER A MAYOR'S BUSINESS
PERMIT IN THE PHILIPPINES?
Mayor’s Permit, also known as a Business Permit or BPLO Permit, is a license issued
by the local government, granting authorization to operate a business within a city or
municipality. All business entities, including sole proprietorships, corporations, partnerships,
cooperatives, and associations, must obtain this permit. The application is filed with the
Business Permits and Licensing Office (BPLO) of the city or municipality where the business
is located. (7)
Typical requirements include a Business Permit application form, application
forms for other clearances and permits (such as Zoning Certificate, Locational
Clearance, Fire Safety Inspection Certificate, Sanitary and Occupational Health Permits), and
a SEC, DTI, or CDA Registration Certificate. A Barangay Business Permit, Contract of Lease
(or proof of property ownership), Certificate of Occupancy, and Locational Clearance (and
Zoning Certificate) are also required. Additional requirements may include a Fire Safety
Inspection Certificate, Sanitary Permit to Operate, Comprehensive General Liability
Insurance Policy, Community Tax Certificate (Cedula), employees’ medical certificates,
photos of the establishment, and an Affidavit of Undertaking. (7)
The requirements can vary depending on the specific city or municipality,
but typically include the following:
Essential Documents:
Application Form.
Certificate of Registration from SEC, DTI, or CDA.
Barangay Business Clearance.
Community Tax Certificate (CTC or Cedula).
Lease Contract (if leased) or Transfer Certificate of Title (if owned).
Sketch or pictures of the business location.
Additional Permits and Clearances:
Locational/Zoning Clearance.
Fire Safety Inspection Certificate.
Sanitary Permit.
Certificate of Occupancy (Building and Unit).
Building Permit and Electrical Inspection Certificate.
Industry-Specific Requirements:
Public Liability Insurance for restaurants, cinemas, and malls.
FDA permit for bakeries and drugstores.
General Steps in Securing a Mayor’s Permit:
Secure initial requirements (application form, SEC/DTI/CDA Certificate, lease contract,
etc.).
Obtain necessary permits and clearances from designated offices within the
City/Municipal Hall.
File the application form with all required documents at the Bureau of Permits (BP) or
Business Permit and Licensing Office (BPLO).
Procure a Community Tax Certificate (Cedula) from the City Treasurer’s Office.
Pay the assessed fees at the Cashier’s Office.
Obtain a Fire Safety Inspection Permit and a Temporary Sanitary Permit.
Submit all requirements to the designated BP/BPLO office to get the Mayor’s Permit
released
BIBLIOGRAPHY:
1. Joshua Stowers. (2024). How to Choose the Best Legal Structure for Your Business.
https://www.businessnewsdaily.com/8163-choose-legal-business-structure.html
2. Choose a business structure | U.S. Small Business Administration. (2024).
https://www.sba.gov/business-guide/launch-your-business/choose-business-structure
3. How to Register Business Name in the Philippines - Esquire Financing. (2022).
https://esquire.com.ph/articles/how-to-register-business-name-in-the-philippines
4. Business Registration and Permits | Department of Trade and ... - DTI. (2024).
https://www.dti.gov.ph/negosyo/business-registration-and-permits/
5. Harold Respicio. (2024). A Comprehensive Guide on Obtaining a Tax Identification Number ...
https://www.lawyer-philippines.com/articles/a-comprehensive-guide-on-obtaining-a-tax-
identification-number-tin-in-the-philippines-1
6. Sofia. (2025). How to Get a TIN ID in the Philippines | Digido. https://digido.ph/articles/how-to-
get-a-tin-id
7. FilePino. (2025). How to Get a Mayor’s Permit in the Philippines (Complete Guide).
https://www.filepino.com/mayors-permit-philippines/
