Formal registration of companies has many immediate benefits for the companies and for business owners and employees. Legal entities can outlive their founders. Resources are pooled as several shareholders join forces to start a company. Formally registered companies have access to services and institutions from courts to banks as well as to new markets. And their employees can benefit from protections provided by the law. An additional benefit comes with limited liability companies. These limit the financial liability of company owners to their investments, so personal assets of the owners are not put at risk. Where governments make registration easy, more entrepreneurs start businesses in the formal sector, creating more good jobs and generating more revenue for the government.
Below is a detailed summary of the bureaucratic and legal hurdles faced by entrepreneurs wishing to incorporate and register a new firm in Philippines. 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.
This information was collected from World Bank: Doing Business
* Takes place simultaneously with another procedure.
This information was collected from World Bank: Doing Business
| No. | Procedure | Time to Complete | Associated Costs |
|---|---|---|---|
| 1 | Verify and reserve the company name with the Securities and Exchange Commission (SEC) | 1 day | PHP40 |
| 2 | Deposit paid-up capital in the Authorized Agent Bank (AAB) and obtain bank certificate of deposit | 1 day | no charge |
| 3 | Notarize articles of incorporation and treasurer's affidavit at the notary | 1 day | PHP500 |
| 4 | Register the company with the SEC and receive pre-registered Taxpayer Identification Number (TIN) | 3 days | (PHP 1,926.44 filing fee equivalent to 1/5 of 1% of the authorized capital stock or the subscription price of the subscribed capital stock, whichever is higher but not less than PHP 1,000 + PHP 19.26 legal research fee (LRF) equivalent to 1% of filing fee but not less than PHP 10 + PHP 500 By-laws + PHP 150 for registration of stock and transfer book (STB) required for new corporations + PHP 320 STB + PHP 10 legal research fee for the By-laws) |
| 5 | Obtain barangay clearance | 1 day | PHP 500 |
| 6 | Pay the annual community tax and obtain the community tax certificate (CTC) from the City Treasurer's Office (CTO) | 1 day | PHP 500 |
| 7 | Obtain the business permit to operate from the BPLO | 6 days | (PHP 2,408.05 business tax (25% of 1% of paid-up capital) + PHP 200 mayor’s permit + PHP 150 sanitary inspection fee + PHP 50 signboard fee + PHP 300 business plate + PHP 100 QCBRB + PHP 545 zoning clearance + PHP 1,300 garbage fee+ PHP 300 FSIC (10% of all regulatory fees)) |
| 8 | Buy special books of account at bookstore | 1 day | PHP 400 |
| 9 | Apply for Certificate of Registration (COR) and TIN at the Bureau of Internal Revenue (BIR) | 2 days | PHP 100 (certification fee) and PHP 15 (documentary stamp tax, in loose form to be attached to Form 2303) |
| 10 | Pay the registration fee and documentary stamp taxes (DST) at the AAB | 1 day | (PHP 500 registration fee + PHP 4,169.97 DST on original issuance of shares of stock. DST on the lease contract is not included in the computation of the cost) |
| 11 | Obtain the authority to print receipts and invoices from the BIR | 1 day | no charge |
| 12 | Print receipts and invoices at the print shops | 7 days | PHP 3,500 |
| 13 | Have books of accounts and Printer’s Certificate of Delivery (PCD) stamped by the BIR | 1 day | no charge |
| 14 | Register with the Social Security System (SSS) | 7 days | no charge |
| 15 | Register with the Philippine Health Insurance Company (PhilHealth) | 1 day | no charge |
| * 16 | Register with Home Development Mutual Fund (Pag-ibig) | 1 day (simultaneous with previous procedure) | no charge |