SPECIAL ENGAGEMENT MONITORING

a. BUSINESS REGISTRATION
Why do we need to register our business?
1. Registration of business will give you protection under the laws.
2. Since the company and the owner are separate legal entity so there is limited
liability upon you and after registration, your company can sue or can be sue as it
is the separate legal entity.
3. Important for getting a loan from the bank.
4. Creating a brand name
5. This will help you to create valid invoices.
6. This will help you under the tax laws.
7. Important for finding investors.
8. Increase your credibility in the market and customer will trust you more.
Where to Register a Corporation?

1. Securities and Exchange Commission

2. Local Government Units where your business is located:
a. Barangay
b. Mayor’s Office
3. Bureau of Internal Revenue
4. If you have employees, you need to register to the following:
a. Social Security System (SSS)
b. Philippine Health Insurance Corporation (PHILHEALTH)
c. Home Development Mutual Fund (PAG-IBIG)

Basic Requirements and Procedure in Registering a Corporation

1. Reserve and Register Your Business Name in Securities and Exchange

Commission (SEC), as follows:

NEW PROCEDURE IN SEC:

The Company Registration System (CRS) is the full automation and online pre-
processing of corporations and partnerships, licensing of foreign corporations,
amendments of the articles of incorporation and other corporate applications
requiring SEC approval.
 The SEC as the corporate register of domestic companies and foreign
corporations doing business in the Philippines takes pride to be in the forefront of
introducing and implementing reforms by making business registration process
simpler, faster, more efficient and more transparent.
The CRS special features are as follows:
• Online Verification of Company Name
• Online Appeal for Disallowed Proposed Name
• Online Fill-out of Articles of Incorporation (AI) and By-laws (BL);
• With Built-in Validation in the Pre-form and In-form Data Encoding;
• Online Submission thru Uploading of Documents for Internal
Processing/Evaluation;
• Online Issuance of Deficiencies on Submitted/Uploaded Application;
• Online Assessment of Filing Fees;
• Online Payment of Fees.

Procedures for Online Company Registration

STEP 1 CREATE AN Click sign up and enter the information required:

ACCOUNT  Basic Information
 Address
 Contact Details
 TIN
 Company Information
PROVIDE A Will use to log in to your account and to which all
VALID E-MAIL communications in relation to your registration will be
ADDRESS sent.

Check your e-mail and click on the link provided to

activate and log in to your account.
STEP 2 SELECT From a dropdown list, click on the service or type of
APPLICATION application you wish to avail:
TYPE  Primary Registration
  Appeal
 Amendment
 Other Application
STEP 3 VERIFY NAME From a dropdown list, select the type of company you
wish to register:
 Stock Corporation
 Non-stock Corporation
 Foreign Stock Corporation
 Foreign Non-Stock Corporation
 General Partnerships
 Limited Partnerships
 Professional Partnership

Initially, the systems will let you know whether the

proposed name is still available for use or not If the
name is still available, enter the trade name/s if
preferred then click validate.

If the system confirms that the proposed trade name is

still available, click Add.

Select which office will process your application: Main

office, Satellite Office, or Extension Offices, then click
Next.

Submit your application for further evaluation and final

approval. You will then receive an e-mail notification of
the proposed names’ approval or disapproval.

In case the proposed names were disapproved, you

may now file your Appeal using the CRS.
 Note: You must accomplish Steps 3 and 4 in four days,
otherwise, your application will expire and the reserved
name may be used again by the public.
STEP 4 ADD COMPANY Fill up the following forms to generate your By-Laws,
DETAILS Articles of Incorporation or Article of Partnership and
other company registration documents:

Pre-Form
Company Information
Company Address

Read the Registration Guidelines, the Re-strictions

applicable to your application and the list of documents
to be submitted.
In-form
1. Company Classfication
2. Purpose Clause
3. Terms of Existence
4. Capital Structure
5. Number of Incorporators
6. Profile of Incorporators
7. Corporate Subscribers

Carefully review and confirm the company details you

entered. A payment assessment will appear to inform
you of the amount that you need to pay. Click Next
then download, and print the system-generated AI or
AP, and BL, then confirm your registration summary.
STEP 5 UPLOAD Upload the unsigned system-generated AI or AP, and
DOCUMENTS BL together with other requirements (i.e. Treasurer’s
Affidavit, Cover Sheet, etc.)
 Submit forms and wait for an email notification of either
the payment procedure or the list of documents for
compliance.

If there are still requirements for compliance, remain at

Step 5 and you will need to go back to Step 4. You
cannot proceed to Step 6 unless all requirements are
met.

Note: You must accomplish Steps 4 and 5 in thirty

days, otherwise, your application will expire and the
reserved name may be used again by the public.
STEP 6 PAY THE Once the payment advise was received, print the Order
ASSESSED of Payment attached in the e-mail(except when paying
FEES online through the Landbank ePayment). Log into your
CRS account, choose a payment method and pay the
corresponding fees and charges at any of the
following:
 Landbank ePayment
 Landbank on Collection
 SEC Cashier/Over the Counter
 Point of Sales ( POS)
STEP 7 UPLOAD PROOF After payment, upload the official receipt/proof of
OF PAYMENT payment, with the signed and notarized AI or AP, Bl
and other documentary requirements. Wait for an e-
mail notification of when the original documents should
be submitted.
STEP 8 SUBMIT THE Once you receive the email notification advising you to
ORIGINAL submit the original signed and notarized AI or AP, BL
DOCUMENTS and other documentary requirements, proceed to the
Company Registration and Monitoring Department,
 G/F Secretariat Bldg., PICC Complex, Pasay City or
the Extension Office you selected in Step 3.
STEP 9 CLAIM THE After further review and approval, you may claim the
CERTIFICATE Certificate of Incorporation with other submitted
OF documents; and the Unified Registration Records
REGISTRATION (URR), bearing the Employer’s Registration Numbers
issued by the SSS, PAG-IBIG and PhilHealth and the
company TIN issued by the BIR.

Check if your desired business name is available via SEC online website or at
SEC Office in Mandaluyong. If available, register/reserve your business name via SEC
online website or at SEC Name Verification Unit – SEC Office in Mandaluyong

Prepare, sign and notarize the following:

a. Articles of Incorporation;
b. By Laws
c. Treasurer’s Affidavit; and
d. Joint affidavit of two incorporators undertaking to change corporate name
immediately upon receipt of notice or directive from the Securities and
Exchange Commission that another corporation, partnership, or person has
acquired a prior right to the use of that name or that name has been declared
misleading, deceptive, confusingly similar to a registered name, or contrary to
public morals, good customs or public policy. (Not required if the Articles of
Incorporation have a provision on this commitment).

Submit notarized documents to SEC Office in Mandaluyong City. Claim your

SEC Certificate of Registration

Processing Time: At least one (1) week upon submission of complete documents

2. Acquire Barangay Clearance

Once the corporation is registered with SEC the next step is to get a barangay
clearance in the barangay where your business is located.
Here are the basic steps

 Go to the barangay where your business is located to secure and fill-up

application form
 Submit your completed application form together with the following:
o Certificate of Business Registration from SEC
o Two (2) valid IDs
o Proof of Address such as Contract of Lease (if rented) or Certificate of
Land Title (if owned)

Processing Time: 1 day upon submission of complete documents.

3. Acquire Business Permit from the Mayor’s Office

Once you have a Barangay Clearance Certificate, the next step is to acquire a
Business Permit in the municipality where your business is located.

Here are the basic steps and requirements:

 Go to the municipal office where your business is located to secure and fill-up
application form
 Submit your completed application form together with the following:
o Certificate of Business Registration from SEC
o Barangay Clearance Certificate
o Two (2) valid IDs
o Proof of Address such as Contract of Lease (if rented) or Certificate of
Land Title (if owned)

Processing Time: At least one week upon submission of complete documents. But It
can take longer depending on the permit requirements based on the industry.

4. Register with the Bureau of Internal Revenue (BIR)

Once you have the Mayor’s Business Permit, you can now register with the BIR.

Here are the basic steps and requirements:

 Go to the Regional District Office (RDO) where your business is located
 Fill-up registration form as follows:
o BIR Form 1903 – Application for Registration (For
Partnership/Corporation)
 Submit completed registration form together with the following:
o Certificate of Registration form SEC
o Barangay Clearance
o Business Permit from the Mayor’s Office
o Proof of Address such as Contract of Lease (if rented) or Certificate of
Land Title (if owned)
o Valid IDs, if applicable.
 Pay the Registration Form (BIR Form 0605) and Documentary Stamp Tax (BIR
Form 2000), if applicable.
 Register your book of accounts and receipts/invoices.
 Claim your Certificate of Registration (BIR Form 2303)

SOCIAL SECURITY SYSTEM

SSS- Social Security System- Provided under Republic Act No. 8282, a social
insurance program that aims to provide protection to its members and beneficiaries.
SSS members can avail of maternity, sickness, disability, retirement, funeral and
death benefits. SSS also allows qualified members to take up salary, housing,
business, educational loans.
 The SSS contribution is 11% of an employee’s monthly salary. The employer is
required to shoulder 7.37% of the total 11% contribution, while the remaining 3.63% is
shouldered by the employee.

New SSS Contributions Table effective January 2021.

In pursuant to Republic Act No. 11199 or the Social Security Act of 2018, SSS
contribution was increased to 13%, a 1% increase from the previous rate. Minimum
Monthly Salary Credit (MSC) is also increased from P2,000 to P3,000 except for
Household Employers/Kasambahay Members and OFW Members whose MSC shall
remain the same. Likewise, the maximum MSC is also raised to P25,000 from P20,000
for all members.
HOW TO REGISTER IN SSS AS EMPLOYER?

PROCEDURES

 Employer registration shall be made through the Employer Registration Form (SS
Form R-1), which should be submitted with the Specimen Signature Card (SS
Form L-501) and the original and photocopy of the following required documents,
duly signed by the authorized signatory:

AUTHORIZED SIGNATORY President, Chairman or Corporate Secretary

(Approved Articles of Incorporation from
SEC)

 The employer shall then submit the initial Employment Report Form (SS Form R-
1A) to report his/her employees, within thirty (30) days upon hiring.
 The SS Form R-1A should indicate the correct ER number, the total number of
employees reported, and complete employees’ details such as their respective
SS numbers, birth dates, employment start dates, monthly compensation, and
positions.

Managing your membership details

Changes in employer’s data and status of business operations should be reported

immediately to the nearest SSS Office by accomplishing an Employer Data Change
Request (SS Form R-8), which should be duly signed by the authorized signatory and
supported by the original and photocopy of appropriate documents, if any, showing the
Effectivity Date. It should also be duly notarized, except if it is for a change/addition of
address, e-mail address, and telephone or fax numbers.

The SS Form R-8 should be signed by any of the following:

 Corporation - President, General Manager, Chairman or Corporate Secretary

  Foreign-owned Corporation- Designated Philippine Representative as shown
in the SEC registration

Required Documents

For Change of Business Name/Legal Personality/Nature of Business

Any of the following, whichever is applicable:

 Certificate of Registration of Business Name from DTI

 Certificate of Filing of Articles or Amended Articles of
Partnership/Incorporation/Cooperation from SEC/CDA

For Change of Business Address

 Proof of billing, or in its absence, any of the following

 Deed of Sale of Property/Lease Contract
 Barangay certificate evidencing transfer to the new address

For Change of Name of Owner/Managing Partner/Corporate Officers

Any of the following, whichever is applicable:

 Deed of Sale/Assignment duly signed by concerned parties with the new

Owner’s DTI Registration or Business License
 Deed of Donation, subject to compliance with the requirements thereto
 General Information Sheet duly received by SEC
 Minutes of General Assembly (for cooperatives)

For Amendment of Date of Coverage (DOC)

All of the following:

 Employer Registration Form (SS Form R-1) and Employment Report Form
(SS Forms R-1A) that will supersede the initial submission
 Affidavit of employees attesting to the actual date of their employment
  Certification from the Municipal/City Treasurer’s Office/ Bureau of Internal
Revenue (BIR)

For Temporary Suspension of Business Operations

Any two (2) of the following documents, whichever are applicable:

 Notification of suspension of operation duly received by BIR within the

prescribed period
 Audited Financial Statements and Income Tax Return (ITR) showing non-
operation/no earnings for the applicable period/s filed with SEC or BIR within
the prescribed period
 Board Resolution approving the suspension of business operation adopted
within the prescribed period and duly acknowledged received by regulatory
agencies (e.g. BIR, SEC, etc.)
 Employment Report Form (SS Form R-1A) showing the separation of its
employee/s duly received by SSS within the first ten (10) days of the month
after the applicable quarter
 Notice of Strike duly received by DOLE with a Certification that there was no
operation/employees during the strike
 Lease Contract/Joint Affidavit of Termination of Lease Contract
 Certificate of Non-Renewal of Business License from the Municipal/City
Treasurer’s Office
 Certification from the Fire Department/concerned unit of the municipality/city,
in case of destruction of corporate facilities due to fire/fortuitous event

For Resumption of Business Operations

 Employment Report Form (SS Form R-1A) reporting for coverage newly
hired/re-hired employee/s

For Termination/Dissolution of Business

Partnership/Corporation/Cooperative
  Certificate of Filing of Articles of Dissolution/Cancellation of Registration
issued by the SEC/CDA or in its absence, any two (2) of the following:
 Audited Financial Statements and ITR showing non-operation/no earnings for
the applicable period/s filed with SEC or BIR within the prescribed period
 Board Resolution approving the termination of business operation adopted
within the prescribed period and duly acknowledged/received by regulatory
agencies (e.g. BIR, SEC, etc.)
 Employment Report Form (SS Form R-1A) showing the separation of its
employees duly received by the SSS within the first ten (10) days of the
month after the applicable quarter
 Notification of Business Termination duly received by SEC or BIR within the
prescribed period

For Termination/Dissolution due to Mergers/ Consolidation of Registration

 Certificate of Filing of Articles of Merger issued by the SEC

For Cancellation of DOC due to Employer’s Allegation that Business Operation

Did Not Materialize

 SSS Account Officer Report

PHILHEALTH

Philippine Health Insurance Corporation (PhilHealth)- aims to provide Filipinos with

financial assistance and access to affordable health services. It covers hospital costs,
subsidy for room and boarding, medicine, and professional services.

The employer is required to shoulder half of the contribution and the remaining 50% will
be deducted monthly to the salary of the employee. The minimum salary base is
₱10,000 and the maximum is ₱50,000, which is equivalent to the minimum contribution
of ₱275.00 and the maximum is ₱1,375.00 per month.

Figure 1. Philhealth Contribution Table for Direct Contributors

Monthly Basic Salary (MBS)- The fixed basic pay of an employee which shall not
include sales commissions, overtime pay, allowances, thirteenth month pay, bonuses or
other gratuity payments.

The MBS shall be computed based on the estimated equivalent monthly rate (EMR)
consistent with the latest edition of the DOLE Handbook Workers Statutory Monetary
Benefits.

HOW TO REGISTER IN PHILHEALTH AS EMPLOYER?

Employers may register through the Philippine Business Registry (PBR). Once
registered in this system, they will no longer be required to submit documents. However,
if the employer fails to register through the PBR, the following shall be submitted:

Partnerships and corporations - Securities and Exchange Commission (SEC)

Registration

To register their employees

Government and Private Sectors

Submit the following to any PhilHealth Office:

  Employer Data Record (ER1) Form (in duplicate)
 PhilHealth Membership Registration Form (PMRF) for each employee (in
duplicate)

After processing, the employer will be issued the following:

 PhilHealth Employer Number (PEN) and the Certificate of Registration

 PhilHealth Identification Number (PIN) and Member Data Record (MDR) of
registered employees

Employers (except for household employers) are required to display the Certificate
of Registration in conspicuous area of their offices.

Home Development Mutual Fund (Pag-IBIG Fund)

The HDMF, commonly known as Pag-IBIG (Pagtutulungan sa kinabukasan:

Ikaw, Bangko, Industriya, Gobyerno) Fund, was established to provide a national
savings program and an affordable house financing for Filipinos.

 Aside from housing programs, it also offers savings program and multi-purpose
loans that qualified members can avail.
 Pag-IBIG fund has a fixed monthly contribution of ₱200.00.
 For employed individuals, ₱100.00 will be shouldered by the employer, while the
remaining ₱100.00 will be deducted to the monthly salary of the employee.

How do employers register with Pag-IBIG online?

The Pag-IBIG Online Employer Registration System is no longer available. To

apply for a Pag-IBIG Employer ID, employers have to submit the following documents to
the Pag-IBIG branch that keeps their membership record:

 Filled out Employer’s Data Form

 Accomplished Specimen Signature Form
 Proof of business ownership (SSS Certification, Business Permit/Mayor’s Permit,
DTI Certificate of Registration, etc.)

Application for Authority to Print Receipts & Invoices

BIR Form 1906- (Jan 2000 ENCS) Application for Authority to Print Receipts and
Invoices.

 This form is to be accomplished by all taxpayers’ every time printing of receipts

and invoices is needed.
 All persons who are engaged in business shall secure from the BIR an Authority
to Print receipts or sales or commercial invoice before a printer can print the
same.

DOCUMENTARY REQUIREMENTS

› Final & clear sample of principal and supplementary receipts/invoices

› Photo copy of last issued ATP or Printer's Certificate of Delivery (PCD) or any
booklet from the last issued ATP for subsequent application

PROCEDURES

› For taxpayers:

a. Accomplish BIR Form 1906 and submit the same together with the documentary
requirements to RDO where the HO is located or concerned office under the Large
Taxpayer Service;

b. Keep/File PCD and ATP copy duly received/issued by BIR for audit purposes;

c. Taxpayer’s branch office shall furnish its RDO a copy of the ATP issued by the
appropriate BIR office having jurisdiction over the head office.

› For the printer/supplier:

a. Prepare Printer’s Certificate of Delivery (PCD) in five (5) copies and submit to
RDO where the place of business is located or concerned office under the Large
Taxpayer Service within thirty (30) days from date of ATP and prior to delivery of
receipts and/or invoices to taxpayer;

b. Furnish the taxpayer and its branches copy of the received PCD and approved
ATP together with the taxpayer’s Sworn Statement within thirty (30) days from the
issuance of PCD. One copy thereof shall likewise be submitted to the BIR Office that
has jurisdiction over the head office of the printer.

DEADLINES

› Secure Application for Authority to Print Receipts and Invoices on or before the
commencement of business
Who will stamp the printed receipts and invoices?

Stamping shall be done by the Taxpayer Assistance Section of the RDO having
jurisdiction over the establishment which will issue the invoice/receipt

What are the essential features of the receipts or invoices?

Invoices or receipts must be serially numbered and shall show, among others,
the following:

 Name of the Professional/Business/Commercial Establishment

 Business Style business name
 Taxpayer Identification No.
 Business Address of the Person/Entity
 Space for date of transaction
 Space for customer name and address
 Serial Number of invoice or receipt
 ATP Number and series approved
 Printer information

What are the basic information required to be reflected on Invoices and Receipts
issued by Financial Institutions

 name, TIN (with suffix of the word VAT), business style, if any, and address of
the financial institution
 date of transaction
 name, TIN, business style, if any, and address of the VAT-registered client;
 description of the nature of transaction
 the invoice value or consideration, showing the VAT separately
 total amount billed and received; and
 such other information, as required in Section 237 of the Code.
Are tape receipts (cash register machine or point of sales machine tape)
considered as an official receipt/invoice?

Yes, as long as the tape receipts are generated from a BIR-registered

CRM/POS, as evidenced by the BIR sticker attached to the machine duly signed by the
RDO.

How to Renew Your Business Permits?

The deadline for all registered businesses in the Philippines on renewing their
business permits — which expires annually at the end of each year (December 31st) —
is January 20th of the upcoming year.

Penalties for Late Renewal of Business Permits in the Philippines

Business permit renewal begins from 01 January until 20 January of each year.
Failure to secure a renewal of licenses and certificates or a late filing with the Bureau of
Internal Revenue (BIR) and your designated Local Government Units (LGUs) could be
detrimental to your business operations. Which in turn, will directly affect your profits
and overall survival in the local industry. Make sure you renew your business permits
within this period and avoid the following penalties:

BIR Penalties

 Fine of not less than five thousand pesos (P5,000) but not more than twenty
thousand pesos (P20,000); and
 Imprisonment of not less than six (6) months but not more than two (2) years.

Local Government Units (LGU) Penalties

 The LGU will impose a twenty-five percent (25%) surcharge on the tax assessed,
plus an additional two percent (2%) penalty for every month which the business
permit was not renewed; and
 Closure and/or seizure of properties and assets (for extremely delinquent
accounts).

Renewal of Barangay Permit/Clearance – Deadline January 20

 The first step is getting your Barangay Permit or Barangay Clearance.

Barangay Clearance - is essential as it verifies your business’ compliance with the

requirements of the local government. Also take note that this document is necessary
for obtaining your Mayor’s Permit.

What you need to bring:

 Original and photocopy of previous year’s Barangay Permit

 Original and photocopy of previous year’s Official Receipt
 Accomplished application form (2 copies)
 Requirements indicated on the application form

What you have to do:

1. Go to the local barangay hall of the district where your business is located.
2. Obtain a renewal application form.
3. Fill it out and submit along with the original copy of Last Year’s Barangay Permit
and Official Receipt for assessment.
4. Once approved, pay the corresponding fees (will vary depending on the nature of
your business).
5. Get the Official Receipt of the Barangay Permit. Take note of the date indicated
on when you can claim your Barangay Permit.
6. Go back to the barangay hall on the said date and claim your new Barangay
Permit.

Renewal of Mayor’s/Business Permit – Deadline January 20

The second step is processing your Mayor’s Permit renewal, which can only be
done after obtaining a Barangay Permit/Clearance.

What you need to bring:

 New Barangay Permit (Current Year)

 Last Year’s Original Mayor’s Permit
 Last Year’s Original Official Receipt
  Last Year’s Income Statement (audited or unaudited)
 Last Year’s Contract of Lease
 Local Insurance (either from City Hall or Private Insurance Company)
 Community Tax Certificate (CTC) / Cedula (acquired from City Hall)

What you need to do:

1. Go to the local Business Permits and Licensing Office of the City Hall or
Municipal Hall where your business is located.
2. Fill out an application form.
3. Submit your form together with the requirements for assessment.
4. Once your requirements are approved, pay the Mayor’s Permit fees at the City
Treasurer’s Office.
5. Obtain a receiving copy at the City Treasurer’s Office. Take note of the stamped
date for when you can claim your Mayor’s Permit.
6. Go back to the establishment on the said date, present your receiving copy, and
claim your new Mayor’s Permit.

Renewal of BIR Registration – Deadline January 31

The last step requires you to take your new Barangay Permit/Clearance and
Mayor’s Permit for the renewal of your BIR Business Registration. This certificate gives
your registered business the continuous right to print official receipts, register books of
accounts, pay business-related taxes, and give TIN (Tax Identification Number) to
employees.

What you need to bring:

BIR Payment Form 0605 (download and print)

What you need to do:

1. Go to your business’ local/designated BIR Revenue District Office (RDO). Find

the details of your specific RDO here.
2. Submit your accomplished BIR Payment Form 0605 to the officer-of-the-day for
assessment.
 3. Once your requirements are approved, pay the annual business registration fee
of P500 at the bank accredited by your RDO.

DEADLINE OF RENEWAL

The deadline to renew the barangay permit and mayor’s permit is January 22.
Note, however, that the local government has the authority to change this date. The BIR
registration renewal deadline is January 30.

Document Deadline for renewal

Barangay permit January 22

Mayor’s/Business permit January 22

BIR registration January 30

These dates apply to all businesses regardless of the date of establishment. As

such, even companies registered in December must renew their permits in January.

Consequences of late or no renewal?

Failure to renew your barangay and business permits, as well as your BIR
registration will result in penalties. The rates for the penalties are as follows:

 A 25% surcharge on any unpaid taxes, fees, and charges;

 A 2% monthly interest on anything left unsettled until the company pays the
debts, including the surcharge
 Continuing to operate without valid permits for an extended period of time is a
serious violation.
 In such cases, the LGU has the authority to confiscate your assets.
 The LGU also has the power to stop your business activities until you settle any
outstanding debts.

BUSINESS CLOSURE

Reasons for Closing a Business

1. Economic Conditions
2. Low Profits
3. Unavailable Resources
 4. Tough Competition

Process of Business Closure

1. DOLE, SSS, PhilHealth, and Pag-IBIG

 After giving your employees one-month notice that the company is closing,
send a written notice to the Department of Labor and Employment at least
one month before the date you plan to formally close the business.
 DOLE will also request that you ensure termination pay to your employees
amounting to at least 1.5 months’ pay for every year of service.
 After delivering the letter to DOLE, inform SSS, PhilHealth, and Pag-IBIG of
the impending closure so they’ll be updated when you no longer have to
continue paying contributions.
2. Barangay Hall
 Start at the Barangay Hall, bring your requirements, pay the necessary fees, and
await to claim your barangay clearance and certificate of closure.

Note: Local government units may differ in their processes and requirements, so make
sure to check with the LGU first.

Requirements:

o Valid ID
o Letter of request to close business
3. City Hall
 After the Barangay, head to City Hall where your business is located.
 Submit the necessary requirements, pay the fees, and await to claim the city
hall clearance.

Note: Local government units may differ in their processes and requirements, so make
sure to check with the LGU first.

Requirements:
  Valid ID
 Barangay clearance
 Barangay certificate of closure
 Latest business permit
 Business plate
 Notarized affidavit of closure
 Original and photocopy of BIR form 2303
 Latest ITR
 Financial statements
 Latest VAT and OPT returns
 Book of accounts
4. Bureau of Internal Revenue
 You will need to bring all of your requirements (of which there are many) to
the regional district office (RDO) where your business is located.
 After submitting your requirements, you will need to pay the fees and wait to
claim your tax clearance.

Requirements:

 Letter of request for business closure

 Original and photocopy of BIR form 2303
 Book of accounts
 List of inventory of unused receipts and invoices
 All unused sales invoices and receipts
 Latest ITRs last three years
 BIR Form 1905
 City hall certificate of closure
5. Department of Trade and Industry

After getting your tax clearance from BIR, it’s time to officially cancel your business
name.
 The steps are simple:

 Gather your requirements, go to the DTI head office, and wait for the
certificate of cancellation of business name.

Requirements:

 Letter of request for cancellation of registered business name

 Notarized affidavit of cancellation of registered business name
 Original business name certificate of registration
 Certified photocopy of SEC certificate if your business is a corporation or
partnership
6. Securities and Exchanges Commission

Going to SEC is only necessary if your business is a corporation or partnership. In

that case, you will need to bring your requirements to the SEC and wait to claim the
certificate of dissolution from SEC.

Requirements:

 Notarized director’s certificate

 Articles of incorporation/partnership
 Audited financial statement
 BIR tax clearance certificate
 Notarized affidavit of notice of dissolution
 List of creditors
 Endorsement/clearances from necessary government agencies

REASONS FOR PREPARING BUSINESS CLOSURE REQUIREMENTS

It is with accordance with, Sections 133 to 138 of Republic Act No. 11232,
otherwise known as the Revised Corporation Code of the Philippines (“RCC”), provides
for the classification, requirements, and procedure of corporate dissolution.

Whereas, under Section 50 of the RCC, notice of stockholders’ or members’

meetings shall be sent through the means of communication provided in the by-laws,
which notice shall state the time, place and purpose of the meetings. Each notice of
meeting shall further be accompanied by the following:

(a) The agenda for the meeting;

(b) A proxy form which shall be submitted to the corporate secretary within a
reasonable time prior to the meeting;

(c) When attendance, participation, and voting are allowed by remote

communication or in absentia, the requirements and procedures to be followed when a
stockholder or member elects either option; and

(d) When the meeting is for the election of directors or trustees, the requirements
and procedure for nomination and election.

If you have not completed the process of business closure or retirement, this
means the business is still operational. And if your business is still in operation, and
does not comply with the requirements, you will be penalized accordingly.

REASON FOR DOING NOTICE OF DISSOLUTION/BOARD RESOLUTION

It offers suppliers the ability to collect unpaid debts. This notice is one of the first
steps involved in dissolving a company.

1. Paying Debt Before Corporate Dissolution

In most cases, corporations are required to pay off any debts before dissolution.
The corporation is required to submit a notice to all vendors of its intent to dissolve. The
intent to dissolve should include a deadline that is at least 120 days after the notice. Any
unpaid vendors must then submit any unpaid invoices within this time period. Failing to
file within this time period will void the claim.

Corporations can have an intent to dissolve published in the newspaper of record

in the county in which the corporation is registered. In this case, unpaid vendors have
up to five years to bring a claim against the company. If no funds remain after the
liquidation, then any assets distributed to the directors will be paid to these claims.

2. Bankruptcy Claim
 Filing for bankruptcy instead of dissolution offers some financial relief for the
company. The company will instead follow either Chapter 7 or Chapter 13 requirements.
However, a company is not dissolved after filing for bankruptcy. The bankruptcy must
also be approved by the state.

What is a Special Power of Attorney?

A Special Power of Attorney, better known simply as “SPA”, is a legal document

used in the Philippines which authorizes another person to do things on your behalf.
Said document must be notarized, which means that it should be signed in front of a
notary public. This is roughly the equivalent of a Power of Attorney for Property used in
Ontario. The person signing the SPA is called the principal or grantor while the person
being authorized is called the agent or attorney-in-fact.

When do you need an SPA?

Let us say you are in Canada and you’ve decided to sell real estate property that
you own in the Philippines, but you do not want to travel. You can simply authorize your
“tito” (uncle) or “tita” (aunt) to do the paperwork for you, all you have to do is execute an
SPA. The same goes if you are buying a condominium in the Philippines but does not
have time to travel for the signing of purchase documents or bank loan application.
Generally, you must execute an SPA if you need someone else to deal with your real
estate property in the Philippines.

Is an SPA always required if you need someone to do things for you in the
Philippines?

Whether an SPA is required depends on the nature of things that needs to be

done. You do not need an SPA if you want someone to buy “toyo” (soy sauce), “suka”
(vinegar) or “patis” (fish sauce) for you. It is best to confirm with the persons or offices
that you need to deal with in the Philippines. As a rule of thumb, if you are dealing with
private corporations (such as property developers, schools, or banks) and government
offices (like SSS, GSIS, PAG-IBIG or LTO), you will likely need an SPA. If in doubt, it is
better to have an SPA for important transactions.
Here are some examples of when you might need an SPA for the Philippines:

 Having someone accompany your minor child to apply for passport application;
 Having someone file a court case on your behalf;
 Having someone apply for a loan or claim funds on your behalf; or
 Having someone obtain your school transcript of records.

What Are the Articles of Incorporation?

Articles of incorporation are a set of formal documents filed with a government

body to legally document the creation of a corporation. Articles of incorporation
generally contain pertinent information, such as the firm’s name, street address, agent
for service of process, and the amount and type of stock to be issued.

Articles of incorporation are also referred to as the "corporate charter," "articles of

association," or "certificate of incorporation."

Articles of incorporation are in the document necessary to register a corporation

with a state and acts as a charter to recognize the establishment of a corporation. The
document outlines the basic information needed to form a corporation, the governance
of a corporation, and the corporate statutes in the state where the articles of
incorporation are filed

Requirements for Articles of Incorporation

The articles in the document vary by state, but the following "articles" are
typically included:

 Name of corporation
 Name and address of the registered agent
 Type of corporate structure (e.g., profit corporation, nonprofit corporation,
non-stock corporation, professional corporation, etc.)
 Names and addresses of the initial board of directors
 Number and type of authorized shares
 Duration of the corporation, if it wasn't established to exist perpetually
  Name, signature, and address of the incorporator, who is the person in
charge of setting up a corporation

What is the purpose of BIR Form 2303?

The BIR Form 2303, also called Certificate of Registration (COR), is an official
document that gives the holder the legal rights to operate a business in the Philippines.
It is proof that a business is registered as a taxpayer with the Bureau of Internal
Revenue (BIR).

The BIR Certificate of Registration provides a corporation, partnership, or

cooperative with a business TIN (Taxpayer Identification Number). However, self-
employed and mixed-income individuals such as freelancers, professionals, and single
proprietors are not issued a separate business TIN. Instead, their existing personal TIN
is the one printed on their COR and used in transactions with the BIR, other government
agencies, and private institutions like banks.

The COR also serves as a reference for the types of taxes that a taxpayer is
required to pay (e.g., income tax, percentage tax, value-added tax, withholding tax,
etc.), including their due dates.

Why should you get a COR?

You should register your business not only because it’s required but also
advantageous to your enterprise or career. Here are the reasons to register with the
BIR:

1. BIR registration is mandatory for businesses.

As soon as you start a business or self-employment, you must secure a BIR

Form 2303 to comply with the law. It’s a requirement for a business to legally operate in
the Philippines.

The BIR imposes penalties to unregistered businesses, with a fine of Php 5,000
to Php 20,000 and a jail term of six months to two years.

2. A COR is required for various financial transactions.

 To expand and raise funds for your business, you’ll need to open a bank
account, get loans and/or credit cards, acquire a lease, apply as a product
distributor/dealer, bid as an accredited contractor/supplier with a company or
government office, or perform any other financial transactions.

In such dealings, the BIR Certificate of Registration is one of the business

documents required from self-employed individuals, entrepreneurs, and corporations.

There’s no accepted substitute for the COR. So if you can’t submit this
document, don’t expect to get approval for whatever you’re applying for. This will only
raise doubts about the legitimacy of your business, and nobody wants to deal with an
illegal business.

3. Your business will be seen as legitimate and trustworthy.

A registration certificate from the BIR gives you peace of mind knowing that your
business is legitimate in the eyes of not just the government but also your customers,
suppliers, investors, and other stakeholders.

With your COR prominently displayed in your place of business, customers get the
impression that your business is worthy of their trust and patronage. It makes them feel
safe doing business with you because your operation is licensed and authorized by law.

4. It helps in your marketing efforts.

Having your business registered with the BIR gives you the confidence to
promote it online and offline. It’s also a great idea to indicate in your business profile
that you’re registered with the BIR and DTI or SEC. If your brand reaches more people,
the more customers you attract and retain.

The Audited Financial Statement in the Philippines

Unless your business is an exempt business under Philippine law, you will be
required to prepare, audit and file audited financials, in the form of an Annual Financial
Statement, with both the BIR and the SEC every year.
 The deadline for filing the 2021 Financial Statement for many PH businesses is
15 April 2022! This means that “audit season” in the Philippines has well and truly
started.

Filing the Audited Financial Statement in the Philippines

As mentioned above, there a number of key finance-related documents that must

be submitted during Audit Season. One of these key documents is the Audited Financial
Statement, commonly known as – the AFS!

As described above, the main purpose of the submission of the AFS is to ensure
that PH businesses provide a clear and accurate picture of the company’s financial and
compliance activities to two of the primary regulators of businesses in the Philippines.

However, in order to provide a clear and accurate picture of a company’s

financials, the BIR and SEC will want to ensure that this picture has been independently
certified, or audited, by an independent party – in this case, an auditor or audit firm! So,
once a company has prepared their yearly Financial Statements, before submitting to
the BIR, and then to the SEC, the Financial Statement must first be audited, certified
and signed off by an independent Auditor.

The Financial Statement should be prepared by the company in the first instance.
It will then be reviewed by the Auditor in order to ensure that the company’s financials
have been prepared in accordance with local PH tax and compliance requirements.

Once your Auditor is happy that the Financial Statement is a true and accurate
portrayal of the financial transactions and activities undertaken by the business during
the financial year in question, the Auditor should then be able to sign off on the
Financial Statement, deeming it certified.

The Auditor is effectively certifying that the finances of the company, for the
particular year, are accurate and were prepared in accordance with the proper financial
reporting standards, practices and principles in the Philippines.
 Once the Financial Statement has been audited, it can then be referred to as an
Audited Financial Statement, or AFS, and submitted to the various government
agencies.

What’s the Difference Between Audit Season and a BIR Audit?

When people speak about “Audit Season” in the Philippines, it is usually safe to
assume that they are referring to the statutory requirement to submit an Audited
Financial Statement – which comes around each year (as mentioned above). To
reiterate, this is a mandatory requirement under law that companies undergo at the
same time each financial year.

However, a reference to a “BIR Audit” generally means something quite different!

In short, the BIR can, at any stage, use its discretion to examine or investigate
the financial and tax compliance practices of a company in the Philippines. The purpose
of this is to ensure that companies are practicing robust finance and tax management
and are adhering to their BIR compliance obligations!

Before the BIR commences with an investigation, they will issue a Letter of
Authority, commonly referred to as an LOA. The LOA confirms that a business has been
identified and selected for audit by the BIR. The BIR will then commence engaging with
the business, including an investigation of the company’s accounting, bookkeeping,
financial and tax compliance activities.

It’s essential for business owners, managers and founders to understand the key
differences between the yearly requirements of Audit Season and the ad-hoc
requirements of a BIR Audit. So, make sure to speak to your accountant or bookkeeper
in the Philippines to understand the requirements of each type of audit.

Finally, and as always, if you receive an LOA from the BIR – make sure to inform
your accountant immediately!

When is the Deadline for Filing the AFS in the Philippines?

In short, the deadline for filing the AFS with the BIR will depend on the registered
financial year of the company.
In the Philippines, the Audited Financial Statement must be submitted to the BIR,
together with the Annual Income Tax Return, by the 15th day of the fourth month after
the company’s financial year-end date.

It is quite common for companies in the Philippines, and indeed, internationally,

to align their financial year with the regular calendar year (i.e. 1 January to 31
December).

As such, companies in the Philippines with financial calendars that align with
their calendar year in 2021 will be required to submit their Audited Financial Statements
with the BIR by 15 April 2022.

If a company’s financial year is different from the calendar year, the deadline for
filing will be different. For example, if your company’s financial year ended on 31 March
2022, the AFS will have to be filed by 15 July 2022.

The filing with the SEC will always come after the filing with the BIR. Generally,
companies are required to file their AFS with the SEC in accordance with deadlines
based on the last numerical digit of a company’s SEC registration numbers or licence
numbers. The SEC will usually release a memorandum in December or January
confirming the specific filing deadlines for each category of SEC registration/licence
numbers.

How To File the AFS with the BIR and the SEC

When it comes to the mechanism for filing the AFS with the two government
agencies, things have changed a little bit in recent years in the Philippines as a result of
the COVID-19 pandemic.

There are now different requirements for filing the AFS with each of the different
regulatory agencies.

Filing with the BIR

As mentioned above, in terms of priority, the AFS must be filed first with the BIR.
 At present, the AFS can be filed with the BIR manually or online. Filing manually
means physically attending at your local Regional District Office (RDO) of the BIR and
filing hard copies of the AFS at the counter. Filing digitally can also be done via the
BIR’s online filing portal.

Depending on how the business is registered with the BIR, many

accounting/bookkeeping providers will be able to help their clients by registering for and
then filing via the BIR’s online filing system. So, make sure to ask your accountant or
bookkeeper on the most efficient method for filing the Audited Financial Statement in
2022!

Filing with the SEC

Once the AFS has been filed with and stamped as officially received by the BIR,
the AFS can then be filed with the SEC in accordance with the designated filing
deadlines for the SEC (see above).

With the emergence of the COVID-19 pandemic, the SEC transitioned to a fully
online system for filing various annual reports, including the Audited Financial
Statement.

As such, per SEC MC No. 3 s2021, starting in 2021, the submission of the
Audited Financial Statement to the SEC must be done online using the SEC’s Online
Submission Tool, or OST.

Unless subject to a specific exemption, the SEC will no longer accept hard
copies of Annual Financial Statements. Submission via email, mail, courier, and drobox
will no longer be allowed and/or accepted (again, unless subject to an exemption).

In line with this, all corporations registered with SEC are also required to enroll (if
not already enrolled) with the SEC OST in order to access and submit the Audited
Financial Statement (and other financial reports) through the OST.

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https://mpm.ph/philhealth-contribution-table-2021-2022-2023-2024-2025/

https://www.prulifeuk.com.ph/en/explore-pulse/health-financial-wellness/government-
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