Do you have a business idea in mind? If you want to go into business but don’t know how and where to start, you’re in the right place on cyberspace. One of the simplest ways you can start your business venture is through a sole proprietorship. Tax services in Manila share that all businesses, including online shops, are required to register. Find out more about this business structure below:
What is a sole proprietorship?
A sole proprietorship is a business model where the business is solely owned by you. This means that you have direct control of all the business activities. It’s a very known business model that is famous for its simplicity.
Many accounting services in Manila concur that this model is straight forward. There’s little paperwork to be done and the entire registration process for the licenses is also not costly.
What are its pros and cons?
However, like all other things, this business model is not perfect. It also has its own intrinsic set of advantages and disadvantages, which you must weight to make the best choice for your operations. Let’s take a look at them below:
- Easy to set up and register
- Government applications, certificates, licenses, and permits are low-cost or affordable
- Monitoring requirements are minimal
- Profit is all yours
- You are in control of your business which means you run your business the way you want to
- You are all alone in shouldering the risks and liabilities of your business
- Running things by yourself can be exhausting especially when you face losses
- Creditors and government agencies can go after your personal assets in cases of arrears or settlements
How to register with the BIR?
If you want to get started but are unsure how, the following steps will help. Many tax and accounting services in the Philippines also offer business registration services. Find out what it entails.
- Register your business name at the DTI or the Department of Trade and Industry
- You can register online through the DTI eBNRS (online portal).
- You may use your own name or come up with a brand name but make sure that when you search on the DTI official site, your brand name is unique.
- After coming up with a unique brand name, fill out the application form, pay the fee, and wait for them to give you your Certificate of Registration.
- Register your business in the LGU or Local Government Unit
- Register in the LGU where your business will be located
- Prepare and submit the following documents:
- 2 Valid IDs
- Proof of Address
- DTI certificate
- Pay fee
- Receive the Barangay Certificate of Business Registration
3. File your business permit and licenses in the Mayor’s Office
- Prepare and show the following documents:
- DTI Certificate
- Barangay Certificate
- ID and Proof of Address
- Fill out a form and get permits (fire and sanitary permits)
- Pay the fees
- Receive your official business permit
4. Get your certificate of registration (BIR Form 2303) and claim your official book of accounts and invoices in the Bureau of Internal Revenue (BIR).
- Bring with you all the certificates you have gathered including your identifying documents as well.
- Fill out Application for Registration for Sole Proprietorship (BIR Form 1901)
- Fill out the Application for registration of the books of accounts (BIR Form 1905)
- Using BIR Form 0605, pay the annual registration fee
- Using BIR Form 2000, pay the Documentary Stamp Tax
- You may now get your certificate of registration (BIR Form 2303) and claim your official book of accounts and invoices.
After claiming your certificate of registration and your official book of accounts and invoices, you are officially done registering your business.
Just a reminder that since the new circular was issued by BIR through RMC 57-2020, the BIR registration and business permit registration can now be done simultaneously.
If you are planning to hire staff members for your business, make sure you register them with the following too:
- Social Security System (SSS)
- Philippine Health Insurance Corporation (Philhealth)
- Home Development Fund (HDMF)
- Bureau of Internal Revenue (BIR) if they don’t have TIN yet.
It is mandatory for you as an employer to register with the SSS, PHIC, and HDMF. This is necessary for you to remit the contributions of your employees.
If you have completed all the important requirements, ensure that you have copies of these documents. It is also essential that you display these in the place of your business so clients can be assured that your business is compliant with all the regulatory requirements and that your business can be trusted.
Since everything has been completed, you may now focus on making your business grow and making sure your clients are satisfied. You can also seek expert tax and audit services in the Philippines to ascertain your company’s fiscal health. Call us for a free 30-minute consultation.