How to start a business in the Philippines?

Corporate Law, Legal FAQs

Choosing the form of business depends on different factors–the number of parties, extent of liabilities and responsibilities.

What are the different business registration models?

Single/Sole Proprietorship, Partnership, and Corporation 

What is a Single Proprietorship?

Sole Proprietorship is the most basic form of business. It is owned by an individual who has full control of its own and owns all assets. The owner is also personally answers to all liabilities or losses. Meaning, creditors may proceed not only against the assets and property of the business but also after the personal properties of the owner. A sole proprietorship does not possess a juridical personality, the law treats the owner and the business as one and the same.

What is a 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. The Partnership has a juridical personality separate and distinct from that each of the partners. There two kinds of Partnerships, general and limited. The liabilities of partners in a partnership would depend whether the partnership is general or limited. In general partnerships, the extent of liabilities of the partners shall extend to their personal properties, much like in sole proprietorship. While in a limited partnership, the extent of the liabilities shall only extend only up to the amount of their share in the contribution in the partnership.

What is a Corporation?

A corporation is a separate juridical entity established under the Corporation Code that is distinct from its owners or incorporators. Being a separate juridical entity, it has rights and obligations like that of an individual. A corporation is formed by a number of natural persons not less than five (5) but not more than fifteen (15), all of legal age. The extent of liability is limited only to the corporation; Owners are not personally liable

The ownership of a corporation is divided into shares of stock. A corporation issues the stock to individuals or other business, who then become owners or stockholders, of the corporation.

Business Registration Process in the Philippines

In setting up a business, there are several government agencies one has to register depending on the type of business or legal form one is engaging. It is necessary for one to register one’s business to enjoy exclusive rights over the name of the business. For Single Proprietorship, businesses can be registered at any DTI Regional or Provincial office. For Partnership or Corporations, it is essential to register with the Securities and Exchange Commission.



All businesses, whatever legal form, are required to secure a mayor’s permit or municipal license from the city or municipality where they are located. Permits or licenses are required to ensure that the standards are met and that business complies with the specific requirements of the business locale. Registration requirements and procedure varies across cities and municipalities.

Post Tags: Business Registration, Corporation Code, Sole Proprietorship

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