Pros of a Corporation:

 Risk and liability is limited to the corporation.

 Owners are not liable themselves.
 Founders can raise capital through issuance of stocks to shareholders
 Ownership can be transferred to different owners
 Existence of a corporation has no limits
 Acting as a legal entity means it can take legal actions like person
 A board of directors handles management of the corporation

Cons of a Corporation:

 More expensive to set up versus single proprietorship

 Requires more legal paperwork to accomplish
 Operating costs are higher
 Taxes incurred are higher
 Subject to more Government requirements and laws

Step 1: Verify the availability of the company name

Done with the Securities and Exchange Commission (SEC). Takes 1 day to complete. Once verified and approved, you
will pay P40 to have the name reserved for a month. You must then file the application for incorporation to the SEC within
one month or pay another P40 to extend the deadline for another month.

Step 2: Obtain a bank certificate of deposit for the paid-in capital

Done at the bank. Takes 1 day to complete. Fees vary from bank to bank.

Step 3: Prepare and register incorporation papers

Done with the SEC. Takes at least 3 days to complete. Fees will add up to around P3,000. You need to submit the
verification slip (from Step 1), bank certificate of deposit (from Step 2), articles of incorporation and by-laws, treasurer’s
affidavit and many other documents. Forms and check list available at the SEC.

Step 4: Obtain a company Community Tax Certificate (CTC)

Obtained at the barangay office or city hall. Takes only 1 day. Fee will be P500 minimum.

Step 5: Apply for a Barangay or District clearance

Done with the barangay office. Takes 2 days. Fees will be around P1,000.

Step 6: Obtain a mayor’s business permit

Done at the City Hall Business Licensing Office. Takes around 2 weeks to complete. Your biggest expense in terms of
fees as it will depend on your declared capital. Prepare at least P10,000. Aside from documents obtained in the previous
step, you will be required to file other forms and requirements. Ask the licensing office for the check list.

Step 7: Register for taxes

Done at the Bureau of Internal Revenue (BIR) office. Takes around 4 days. Registration fees may add up to around P750
plus additional fees for documentary stamp taxes which depends on your declared capital. You will obtain your company
Tax Identification Number (TIN), authority to print receipt/invoices and other documents.

Step 8: Buy accounting books

Buy from any bookstore. Takes 1 day. You’ll be spending around P500 for a cash receipts account, a disbursements
account, a ledger and the general journal. Consult your local BIR office for specific requirements on the books.

Step 9: Print your receipts

Done with any print shop accredited by the BIR. Takes around 1 week. Fees vary but it’s usually around P5,000 for 25
booklets.

Step 10: Have your receipts and books stamped

Done at the BIR office. Takes 1 day at no cost. At this point, you can now legally operate your business.

Step 11: Register your employees

Done at various offices. Takes around 2 weeks to process everything. As required by law, you will need to enroll your
employees (which may include yourself) with the Social Security System (SSS), Department of Labor and Employment
(DOLE), Home Development Mutual Fund (HDMF) and Philippine Health Insurance Corp. (PhilHealth).

This step-by-step guide is just a simplified summary and other steps may be required, specially for businesses which
require special permits and clearances (ie, real estate, pawnshops, schools, etc.).

For a comprehensive list of the additional licenses, you may check out the article: How To Register Your Business in
the Philippines.
Lastly, the filing duration and fees mentioned are based from personal experience. If you’ve recently registered a
corporation in the country and have a different experience than what I’ve written above, then please share it below as a
comment so I may add it here. Thank you.

Steps of the Company Incorporation Process

Step 1: Reservation of Business Name with the Securities and Exchange Commission (SEC)
-If you will operate a sole proprietorship, you should reserve the name of your business with the Department of Trade and
Industry (DTI); if you will operate a cooperative, you should reserve your business name with the Cooperative Development
Authority (CDA)
Step 2: Submission of Documents to SEC
-You will be required to submit the following:

 Articles of Incorporation and By-Laws

 Treasurer’s Affidavit (signed by the incorporators for notarization)
-After complete submission of requirements, you will be issued by the SEC with a Certificate of Incorporation, a document
that legitimizes the existence of your company and enables you to legally engage in business as well as become entitled to
certain corporate rights in the Philippines
Step 3: Registration with Local Government Units (LGUs) of the location where you want to establish your business
-You will be required to secure the following:

 Barangay Clearance from the Barangay Hall

 Mayor’s Permit form the Mayor’s Office
 Business Permit from the Business Permit and Licensing Office (BPLO) of the Municipal/City Hall
Step 4: Registration with the Bureau of Internal Revenue (BIR) for corporate taxation
-Requisites for acquiring a BIR Certificate of Registration:

 0605 Form (for payment of Annual Registration Fee)

 DST 2000 Form (for payment of subscription of shares for domestic corporations)
 DST 2000 Form (for payment of lease for all types of company formation)
o This requires a notarized copy of the lease contract of your office address
-Along with the BIR Certificate of Registration, you also need to secure the following:

 Certificate of Registration of Books of Account

 Cash Register Machine (CRM), Point of Sale (POS) Machine or Authority to Print Receipt/ Invoices (Manual
Receipts)
Step 5: Registration with other Government Agencies (for employer registration if employing individuals)

 Social Security System (SSS) for social security benefits of employees

 Philippine Health Insurance Corporation (PhilHealth) for health insurance benefits of employees
 Home Development Mutual Fund (Pag-IBIG Fund) for housing benefits of employees