Requirements For Registering Your Business
Requirements For Registering Your Business
FAQs
1. What is a Sole Proprietorship?
A sole proprietorship, also known as the sole trader or simply a proprietorship, is a type
of business entity that is owned and run by one natural person and in which there is no legal
distinction between the owner and the business. The owner is in direct control of all elements and
is legally accountable for the finances of such business and this may include debts, loans, loss
etc. (en.wikipedia.org.)
2. What is a corporation?
According to Corporation Code (B.P. 68), A corporation is an artificial being created by
operation of law, having the right of succession and the powers, attributes and properties
expressly authorized by law or incident to its existence.
3. What is partnership?
By the contract of partnership two or more persons bind themselves to contribute money,
property or industry to a common fund, with the intention of dividing the profits among
themselves (Article 1767 of the New Civil Code).Two or more persons may also form a
partnership for the exercise of a profession.
4. What is a cooperative?
A co-operative (also known as co-op, cooperative or coop) is an autonomous association
of people united voluntarily to meet their common economic, social, and cultural needs and
aspirations through a jointly owned and democratically controlled business (en.wikipedia.org.).
5. What is the main difference between a corporation, partnership, cooperative and a sole
proprietorship when it comes to registration?
The main difference is the government agencies regulating the entity. Depending on the
structure of your business, your first step is to get a certificate of registration for your business
name in one of these agencies:
6. If your business is a sole proprietorship, what are the steps in registering your business?
1. Register your Business with the DTI and obtain a Business Name Registration
Certificate1
2. Obtain Barangay/municipality/regional clearance from the concerned local government
where you will set up your office
3. Go to the mayors office in order to secure a business permit in the municipal level
4. Go to the Bureau of Internal Revenue (BIR) district office where your business will be
located
5. Obtain a Tax Identification Number (TIN)
6. Fill out an application form for Certificate of Authority to Print Receipts and Invoices
7. Have your Book of Accounts, Receipts and Invoices stamped by the BIR
8. Apply as a self-employed member of the Social Security System (compulsory for
business owners in the Philippines)2
7. What are the government agencies involved when you are planning to set up your
business?
DTI
SEC
Barangay
City/Municipality
BIR
SSS
8. What is DTI?
The Philippine Department of Trade and Industry (Filipino: Kagawaran ng Kalakalan
at Industriya, abbreviated as DTI) is the executive department of the Philippine
Government tasked to expand Philippine trade, industries and investments as the means to
generate jobs and raise incomes for Filipinos. It acts as catalyst for intensified private sector
activity in order to accelerate and sustain economic growth through comprehensive industrial
growth strategy, progressive and socially responsible trade liberalization and deregulation
1 www.dti.gov.ph
2 www.sss.gov.ph
programs and policymaking designed for the expansion and diversification of Philippine trade both domestic and foreign (en.wikipedia.org.).
9.What is SEC?
The Securities and Exchange Commission (Filipino: Komisyon sa mga Panagot at
Palitan, commonly known as SEC) is the agency of the Government of the
Philippines responsible for regulating the securities industry in the Philippines. In addition to its
regulatory functions, the SEC also maintains the country's company register (en.wikipedia.org.).
10.What are the guidelines in choosing a business name?3
1.Choose a business name
2.Search for a business name
3. Register your business name
4.Submit Documentary Requirements
5. Pay your Application
11. How do you choose your business name?
Think of at least three business names in case your first preference cannot be registered
If the name you have chosen is already similar or confusingly similar to a registered
business name, your next preferred business name will be considered4
The root word or words of the name shall be considered (e.g. island instead of
Islander)
The business name should describe the nature of the business
It should be comprised of any or all of the following:
o Letters
3 http://www.bnrs.dti.gov.ph/web/guest/faqsfiling
4 www.gov.ph
5 www.gov.ph
o Numerals
o And punctuation marks that are part of the English and Filipino Language
13. What is not an acceptable business name?
Names which are not acceptable:6
product/service handled
6 http://www.bnrs.dti.gov.ph/web/guest/faqsfiling
12 www.dti.gov.ph
13 www.dti.gov.ph
14 www.dti.gov.ph
Go to your places Barangay Hall. Inform the officer that you are applying for a Barangay
Clearance.
2.
State the reason why you need a Barangay Clearance (ID requirement, employment,
Postal ID, etc.).
3.
Present your Cedula. You can also get this from the Barangay.
4.
5.
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New Applicant19
1. Barangay Clearance
2. DTI/SEC Registration
3. SSS Clearance
4. Two valid IDs
4. Homeowners Clearance for Business (if operating in subdivision)
5. Locational Clearance (if required)
6. Fire Clearance (if required)
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18 http://smallbusiness.chron.com/
19 http://generaltrias.gov.ph/business-and-investment/requirements-for-businesspermit/
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applying for certain accreditation requirements and securing other applicable registration-related
permits (RR 7-2012)
33. What is Tax Identification Number?
Taxpayer Identification Number (TIN) - shall pertain to the system-generated reference
index number issued and assigned by the BIR to each and every person registered in its database.
In all of the business and/or personal transactions of the registered person whether these are with
government offices or otherwise, this reference index number is required to be indicated.
The TIN comprises of a 9 to 13 digit numeric code where the first 9 digits is the TIN proper and
the last 4 digits is the branch code. The branch code digits may be increased depending on future
systems enhancements and policy declarations of the Commissioner of Internal Revenue (CIR).
(RR 7-2012)
34. What is the legal basis of TIN?
Any person, whether natural or juridical,, required under the authority of the Internal Revenue
Code to make, render or file a return, statement or other documents, shall be supplied with or
assigned a Taxpayer Identification Number (TIN) to be indicated in the return, statement or
document to be filed within the Bureau of Internal Revenue, for his proper identification
purposes (Sec. 236 (i) of the Tax Code)
35. What are the primary requirements in the BIR?
Requirements23
Business Name Registration Certificate
Mayors Permit
Brgy. Clearance
Proof of your business Address (e.g. lease/ rental agreement, land title)
Book of Accounts, to be stamped by the BIR (which can be purchase in office
supplies stores)
Receipts and Invoices from BIR accredited print shops, to be stamped by BIR
BIR Form 1902- For Individuals Earning Purely Compensation Income, and Non- Resident
Citizens and Resident Alien Employee.
BIR Form 1903-For corporations/ Partnerships (Taxable and Non Taxable) Including
Government Agency Institutions (GAIs) and Local Government Units (LGUs)
BIR Form 1904-For One Time Taxpayer and Person registering under E.O. 98 (Securing a TIN
to be able to transact with any government office)
37. What are the documentary requirements in BIR form 1901?
A.1. For Single Proprietor, mixed income Individuals24
1. Birth Certificate or any document showing name, address and birth date of the applicant
2. Mayors Permit-if applicable to be submitted prior to the issuance of Certificate of
Registration
3. Other documents for submission only if applicable:
Contract of lease
DTI certificate of Registration Business Name, if business trade name
shall be used
Certificate of authority if Barangay Micro Business Enterprises (BMBE)
registered entity
Proof of Registration/ Permit to operate with Board of Investment (BOI/
Board of Investment for Autonomous Region for Muslim Mindanao (BOIARMM), Philippine Export Zone Authority (PEZA), Bases Conversion
Development Authority (BCDA) and Subic Bay Metropolitan Authority
(SBMA)
Sworn Statement of Capital
Waiver of Husband to claim additional exemption;
Marriage contract; and
NSO Birth Certificate of declared dependents
39. What are the procedures in Application for BIR Form 1901?
1. Accomplish BIR form 1901 and submit the same together with the documentary requirements
to the RDO having jurisdiction over the place where the head office and branch, respectively.26
2. Pay the annual Registration Fee (P 500) at the Authorized Agent Banks (AABs) of the
concerned RDO
3. Pay Documentary Stamp Tax (DST) loose DST/ BIR form 2000* for DST on Contract
of lease, etc.) Present Proofs of payment.
4. Submit requirements for ATP and registration of books of accounts.
5. Attend the taxpayers initial briefing to be conducted by the RDO concerned for new
registrants in order to apprise them of their rights and duties/ responsibilities
6. The RDO shall then issue the Certificate of Registration (Form 2303) together with the
Ask for Receipt Notice, Authority to print and Books of Accounts27
40. When is the deadline of submission of BIR Form 1901?
All individuals engaged in trade or business shall accomplish and file the application on
or before the commencement of business, it shall be reckoned from the day when the first sale
transaction occurred or within (30) calendar days from the issuance of Mayors
permit/professional Tax Receipt (PTR) by the LGU, whichever comes earlier.28
41. What are the procedures in Application for TIN of an estate under judicial settlement?29
1. Accomplish BIR form 1901 and submit the same together with the documentary
requirements to the RDO having jurisdiction over address of the estate.
2. Pay the annual Registration Fee (P 500) at the Authorized Agent Banks (AABs) of the
RDO
42. When is the Deadline for registration of an Application of TIN of an estate?
Application for registration shall be accomplished and filed before filing a return, statement or
declaration as required in the Tax Code and payment of any tax due.30
43. What are the procedures in Application for TIN in Trust Agreement?
1. Accomplish BIR form 1901 and submit the same together with the documentary
requirements to the RDO having jurisdiction over address of the estate.31
2. Pay the annual Registration Fee (P 500) at the Authorized Agent Banks (AABs) of the
RDO
44. When is the Deadline for registration of Application for TIN in Trust Agreement?
Application for registration shall be accomplished and filed before filing a return, statement or
declaration as required in the Tax Code and payment of any tax due.
45. What are the documentary requirements in BIR form 1902 of an Individual earning
purely compensation income
1. NSO birth certificate of the applicant; or
2. Passport (in case of non-resident alien not engaged in trade or business)
3. Waiver of husband on his right to claim additional exemptions, if wife will claim;
4. Marriage contract if applicable
If the husband want to reacquire from his wife the privilege of claiming the additional
exemptions for the dependent children, he shall execute a cancellation of the previously-executed
waiver of the privilege to claim additional exemptions in favor of the wife, which Notice of
Cancellation of Waiver of the privilege of claiming the Additional Exemptions shall be filed
separately, together with the registration update form, with the RDOs having jurisdiction over
the registration o the husband and of the wife.32
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1.Birth certificate or any valid identification showing name, address and birth date; and or
passport with VISA; or
2. Employment contract38
52. What are the procedures Application of BIR Form 1902 (OCW/Seamen)?
Accomplish BIR form 1902 and submit the same together with the required attachments RDO
having jurisdiction over the place of the applicant39
53.When is the deadline for Application of BIR Form 1902?
Application for registration shall be accomplished and filed before filing a return,
statement or declaration as required in the Tax Code and payment of any tax due40
54.What is the form required when the applicant is corporation?
BIR form 1903.41
55. What if it is a Partnership?
The same as corporation.42
56. What are the documentary requirements of corporation and partnerships?
1. Copy of SEC registration and Articles of Incorporation/ Articles of Partnership, as the case
maybe:43
2. Copy of Mayors Business Permit or duly received application for Mayors Business permit, if
the former is still in process with the LGU44
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41 BIR form 1903
42 BIR form 1903
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Contract of Lease
Certificate of Authority if Barangay Micro Business Enterprise
(BMBE)registered entity
Franchise Agreement
License to do Business in the Philippines, in case of Resident Foreign
Corporation;
Proof of Registration/ Permit to Operate with BOI, SBMA,BCDA,PEZA
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62. What are the documentary requirements when an applicant is Government Agencies
and Instrumentalities (GAIs) and Local Government Units (LGUs)?
Unit or Agencys Charter.
63. What are the Procedures for Registration of BIR Form 1903 (GAIs and LGUs)?
Accomplish BIR form 1903 and submit the same together with the required attachments
to the RDO having jurisdiction over the registered address of the Government agencies and
instrumentalities
64. When is the deadline for registration of BIR Form 1903 (GAIs and LGUs)?
Application for registration shall be accomplished and filed before filing a return,
statement or declaration as required in the Tax Code and payment of any tax due
65. What are the documentary requirements in BIR form 1904 (For Payor of capital gains
tax (Stock and Real Properties)?
1. For Payor of capital gains tax (Stock and Real Properties)49
-Birth Certificate or any document showing name, address and birth date of taxpayer applicant
with signature but not limited to:
Drivers license
Integrated Bar of the Philippines (IBP) Identification Card
Professional Regulation Commission (PRC) identification card; and/or
Passport (also in case of non-resident alien not engage in trade or
business)
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Drivers license
Integrated Bar of the Philippines (IBP) Identification Card
Professional Regulation Commission (PRC) identification card; and/or
Passport (also in case of non-resident alien not engage in trade or
business)
-Marriage contract
-Deed of Donation
3.Estate tax
-Death certificate
4.For payor of Final Tax on winnings
-Certification from awarding company/person
5.For vehicle registrants
-Birth certificate or any document showing name, address and birth date of the
applicant
-Cash invoice or official receipt or deed of sale
6.For other applicant
- Birth certificate or any document showing name, address and birth date of the
applicant50
66.What are the procedures in registration of BIR form 1904?
1. For Payor of capital gains tax
Stocks
Accomplish BIR form 1904 and submit the same together with the required attachments
to the RDO having jurisdiction over the registered address of the seller/transferor.
Real Properties
Accomplish BIR form 1904 and submit the same together with the required attachments
to the RDO having jurisdiction over the location of the property.
2.Donors tax
If donation is real property
Accomplish BIR form 1904 and submit the same together with the required attachments
to the RDO having jurisdiction over the address/domicile of the donor at the time of the donation
If donation is personal property
50 BIR form 1904
Accomplish BIR form 1904 and submit the same together with the required attachments
to the RDO having jurisdiction over the address/domicile of the donor at the time of the donation
3.For Payor of Estate tax
Accomplish BIR form 1904 and submit the same together with the required attachments
to the RDO having jurisdiction over the domicile/permanent residence of the decedent at the time
of death
4.For payor of Final Tax on winnings
Accomplish BIR form 1904 and submit the same together with the required attachments
to the RDO having jurisdiction over the residence of the applicant
5.Vehicle Registrant
Accomplish BIR form 1904 and submit the same together with the required attachments
to the RDO having jurisdiction over the registered address of the applicant
67.When is the deadline of registration of BIR Form 1904 ?
Application for registration shall be accomplished and filed before filing a return,
statement or declaration as required in the Tax Code and payment of any tax due.51
68.What are the requirements of the persons registering under E.O. 98?
For Individual:
1.NSO Birth Certificate of the applicant;
2.Passport (in case of non-resident alien not engaged in trade or business)
3.Marriage Contract, if the applicant is a married woman
Non-Individual:
Document to support transaction between a non-resident foreign corporation and the
withholding agent.
69.What are the procedures of the persons registering under E.O. 98?
Accomplish BIR form 1904 and submit the same together with the required attachments
to the RDO having jurisdiction over the residence of the applicant
70.When is the deadline of persons registering under E.O. 98?
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Application shall be accomplished and filed before transacting with any government
agencies or instrumentalities.
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All taxpayers are required to register with the RDO having jurisdiction over the head office,
branch office, place of production or storage place where inventory of goods for sale or use in
business are kept.55
75.Are non-resident aliens and non-resident foreign corporations receiving income from
sources within the Philippines required to register with the BIR?
Yes. Non-resident aliens not engaged in a trade or business (NRA-NETB) or NRFC shall be
issued TINS for purposes of withholding taxes on their income from sources within the
Philippines. The withholding agent shall apply for the TIN in behalf of the NRA-NETB or
NRFC prior to or at the time of filing their monthly withholding tax return as applicasnt under
EO 98,series of 1998 (Sec. 4.1v of RR 7-2012)
76.If a taxpayer is engaged in VATable activity, but the gross sales or receipts from business
or practice of profession P 1,919, 500 or below, is he required to register?
Yes, he is required to register as a Non-Vat taxpayer. However if his gross sales or
receipts is more than P 100,000.00 but does not exceed P 1,919, 500, he has the option to register
as VAT taxpayer. In the case of marginal income earners with gross sales or receipts of P1,
00,000 and below, they have no other option but to register as Non Vat Tax payer.56
77.Are branches, storage places and places of production also required to pay the Annual
registration Fee (ARF) of P500?
Each branch is required to pay the ARF of P 500.However, storage and production places are
liable to the ARF only when sales operations are conducted thereat.57
78.Who are required to register without paying the ARF?
a)
b)
c)
d)
e)
f)
g)
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The original copy of COR and the duly validated BIR form 0605 as proof of payment of
ARF are required to be displayed in any conspicuous place in the head office and branch office.
85.What are the instances when a taxpayer can apply for cancellation of his registration?
The Tin/registration cancellation shall take place upon:
All taxpayers who filed for cancellation of registration due to closure/ cessation or
termination of business, except for branches, shall be subjected to immediate investigation by the
BIR office concerned to determine the taxpayers liabilities.
86.Is there a particular form prescribed by Application for Cancellation of Registration?
Yes BIR form 1905 (Application for Registration Information Update)62
87.Where shall the application for registration information update be filed?
It shall be filed with the RDO who issued COR. for VAT taxpayer; he shall further notify
the RDO where the Home Office registered.63
88.What is the Penalty provision related to Primary Registration?
1.Failure to register- (Those who are found unregistered during TVCD- Subject to the penalties
under prevailing issuances)64
2.Late Register- (Those who are voluntary registering, but beyond the prescribed period as
indicated in these Regulations) Compromise penalty of P 1,000.00 in addition to the unpaid
ARF and penalties due thereon for every year that the business is in operation. This provision
shall not apply to application of TIN employees.65
3.Late payment of ARF-Subject to 25% surcharge and 20% interest per annum and P200
penalty.66
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99.Why is it that GAIs ,LGUs and Non Stock/Non-Profit organizations is exempted from
paying ARF?
It is predicated on the fact that their undertakings/endeavors are not directed nor intended
to generate income/profit.73
100. What will happen when an individual paying ARF dies and the same business is
continued by the person or persons interested in his estate?
Those continuing the business should register as a separate entity reflecting in said registration
that is pursuing the business enterprise as heirs of the estate of the decedent.74
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