The Department of Trade and Industry of the Philippines and the Securities and Exchange Commission shared a joint milestone when the two agencies signed a Memorandum of Agreement on the 28th of January 2020 for the creation of the Philippine Business Registry or PBR. The PBR shall serve as the interface for all domestic corporations, partnerships, and sole proprietorships with any local government units, as well as with national government agencies. Under the PBR, businesses shall only need to submit general requirements when they register and transact business with various government agencies. This presents a welcome change for business owners and entrepreneurs. In this article, we will discuss key provisions of the revised Corporation Code, shortening our visit to the local government units, and the primary requirements you need to submit to the appropriate government agency to streamline the processing of your business registrations. Our team provides comprehensive assistance for business registration Philippines, ensuring a smooth and efficient process.
The revised Corporation Code (RCC) took effect on the 23rd of February 2019. With 289 sections, it addresses perennial problems in dealing with the government that corporations encounter. This makes the RCC a treasure trove for anyone handling corporate concerns. The Department of Trade and Industry for domestic corporations, the Securities and Exchange Commission for foreign corporations, and the Cooperative Development Authority for the cooperatives will process your business registrations. Visit the appropriate government agency to match the thoroughness and speed needed for your chosen business ventures. In most cases, you won’t need to hire professionals or consult with an attorney to process your business permit applications, affording you a degree of flexibility and control in swiftly securing the requirements, readying them for filing with and issuance by the appropriate government agency, and enabling your valued business to start your commercial operations. With the PBR as the prospect, streamlined business permit applications give impetus to your entrepreneurial journey. Stay informed about business registration requirements with our detailed guides and expert advice.
Understanding Domestic Corporations
In the Philippines, a domestic corporation is incorporated under Philippine laws, and all incorporators are Filipino citizens or Philippine registered corporations or partnerships. It 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.
In an incorporation by one individual or corporation, such incorporator may be referred to as a single stockholder corporation while in an incorporation by more than one individual or corporation, the corporation may be referred to as a corporate corporation. We offer specialized services for setting up a domestic corporation, from initial registration to ongoing compliance.
Once the corporation is incorporated, it gains itself a judicial corporate personality. That corporate entity is separated and distinct from its members or stockholders. Therefore, being a stockholder or member of a corporation is not solely by itself an existence of vested ownership of the corporation; the corporation owns the same, a separate person and apart from its members or stockholders.
While a corporation is essentially considered a separate entity, certain instances load the veil of corporate distinction. However, for all intents and purposes, a corporation shall have its own distinct and separate legal entity and its own personality and is treated as such.
Definition and Characteristics
Republic Act No. 7042, as amended by R.A. 8179 and R.A. 8762, otherwise known as the Foreign Investment Act of 1991, was enacted to liberalize the entry of foreign investment in order to accelerate the country’s economic growth. Under the FIA, foreign investors are afforded the same investment opportunities as their domestic counterparts. Except for areas included in the Foreign Investment Negative List (FINL), the requirement of incorporating a domestic corporation in order to engage in business in the Philippines was done away with. However, while foreign investors have other legal investment alternatives, incorporating a domestic corporation remains to be the most significant of those alternatives. A corporation is an artificial person created by operation of law and endowed with the rights, privileges, and powers of a natural person.
Titles 16 and 68 of the Philippine Code, Path II, Book IV vested the Corporation Code of the Philippines (BP Blg. 68) with the authority to incorporate a domestic corporation. Title 16 describes the features and characteristics of corporations, and Title 68 describes the uses and general requirements in establishing a corporation. The Corporation Code and its implementing rules and regulations prescribe the specific powers and overall operational framework within which the agency operates and serves. While the Bureau of Trade Regulation and Consumer Protection may prescribe new requirements, standards, and procedures with regard to service and customer treatment, these requirements may not necessarily directly specify the standards by which service performance measures of the agency, through the CRMD, shall be evaluated.
Business Registration in the Philippines
As the business registration process can be time-consuming, this article aims to streamline the essentials a relative sole (and foreign) business beginners in the Filipino context must know and do during the business registration journey in the Philippines. As the intricacies build upon each other, readers are encouraged to read through from start to finish for a fair idea. After this quick read, you should be clear on what needs to be done and who you should look for to seek assistance in carrying out the task. For practical reasons, this article is as plain-speak as possible, and for an international audience mostly focused on domestic corporations and partly on single-person corporations.
Business registration in the Philippines can be quite time-consuming and sometimes quite confusing. As rules and regulations do change from time to time, businesses or their agents (a lawyer, trainee lawyer, or external professional) should consult the right sources at the right time to ensure that they are compliant and up to date with the business registration requirements. Keep in mind that this article is a high-level guide. The information in this article will likely need to be supplemented with current information from the Securities and Exchange Commission (SEC), Board of Investments (BOI) Philippines, the nearest Department of Trade and Industry (DTI) office, or a local-level business registration office from time to time during the registration process. Local-level business registration offices and details such as required forms and needed licenses vary among local governments. In the case of tax matters, the Bureau of Internal Revenue (BIR) Philippines.
Importance and Benefits
Let us find out why domestic corporations are mainly used by investors; what are the benefits you can derive from it and whether this is really meant for you. Why mainly domestic corporations? It is easier, faster, and less costly for non-residents to engage a Philippine business through a domestic corporation. General Rule: Only Filipino citizens may form or organize a corporation! Sec. 2 of the Foreign Investments Act.
But what are the benefits that a corporation can offer? For a small business? Profits as Incentive. A corporation offers the best opportunity for significant profits, benefits, and long-term growth. You can build real, transferable value and wealth. Reducing of Income Tax Rates. The tax code does not levy an income tax on a corporation’s earnings; it pays tax an amount left after the payments are made. Owners of a corporation, called shareholders, are taxed at a low corporate rate, with your personal tax rate being usually higher. It is a common business tax strategy to minimize the amount of corporate earnings that may be subject to double taxation.
Key Documents and Procedures
To expedite your dealings with any of these regulatory agencies, it would be best to bring with you the following documents:
– For name verification, it would be best to prepare a dozen or so preferred names so that if your top choice is already taken, you can easily move to your second or third choices. There is no reservation or policy on a one-name basis. During the preliminary hearing at the SEC, they will ask for your proposed names and give you a list of those deemed available. If all else fails and each of your proposed names is taken, some firms do resort to weird, highly imaginative, innovative names. Be prepared that such a name can be assigned to you, although you would prefer otherwise.
– Pay the required filing fees at the Cashier or Paying Officer of the SEC (located on the same ground floor, Hidden City building). This can be done before or right after the preliminary hearing. As of this publication, the minimum filing fee for the SEC is Php2500 for domestic corporations.
– A certified copy of the Articles of Incorporation must be obtained upon registration. It will take at least one week to process your request, so it would be best to fill up a request form upon filing the original documents of your A and A and have it certified and released at the same time as your company obtains its SEC Certificate of Registration and SEC Certificate of Incorporation. A pioneering company formation specialist service, through their affiliate-chartered accountants, can assist you to fast-track the registration process so that you can get both documents sooner.
FCB Law’s Expertise in Business Registration
Why does a business owner need FCB Law?
1. Specializes in business law – Aside from its specialization in business law, FCB Law takes pride in providing clients with efficient and quality legal services. As a law firm, FCB Law can provide business registration clients with direct access to versatile lawyers familiar with the pulse and dynamics in Western Visayas. Need some direction? Just visit or call FCB Law’s office without the extra hassle of being placed on hold through hotline numbers.
2. Business services expertise – The firm specializes in a range of business law services from compliance assessment to actual incorporation in the Philippines. Apart from specialties in immigration and business visas and setting up foreign business operations, FCB Law pulls together services essential for entrepreneurial activities such as intellectual property and data protection filings approvals.
3. Access to corporate lawyers – FCB Law provides a toolbox of resources when you need the expertise of corporate lawyers. The legal team is readily available to bring to the table solutions suited for specific business issues since going into legal hassles might hamper the entrepreneurial drive.
4. Accommodating & Responsive – Have immigrant business clients on their list of business registration clients? Yes, the lawyer team is well-versed and skilled in answering directly or addressing legal aspects promptly – their work process includes proper client meetings, responding to calls with the dedicated urgency their client’s questions deserve so they could react to amendments in the registration procedures and requirements as well.
5. Certifications and memberships – While specialized business law firms might not just come off of a recent article or advertisement, being meticulous to check professional certifications or memberships and client testimonials of business registration law firms can potentially save time and eliminate hassles in this essential bit of entrepreneurial endeavor.
