There are several types of
business enterprises an investor can choose from in establishing operations in
the Philippines.
The following business
organizations are organized under the Philippine Laws:
Sole Proprietorship
Sole Proprietorship is a business
structure owned by an individual who has full control/authority of its own and
owns all the assets, personally owes and answers all liabilities or suffers all
losses but enjoys all the profits to the exclusion of others.
Registration Requirement
A Sole Proprietorship must apply
for a Business Name and be registered with the Department of Trade and Industry
- National Capital Region(DTI-NCR). In the provinces, application may be filed
with the extension offices of the DTI.
Partnership
Under the Civil Code of the
Philippines, a partnership is treated as juridical person, having a separate
legal personality from that of its members. Partnerships may either be general partnerships,
where the partners have unlimited liability for the debts and obligation of the
partnership, or limited partnerships, where one or more general partners have
unlimited liability and the limited partners have liability only up to the
amount of their capital contributions. It consists of two (2) or more partners.
Registration Requirement
A partnership with more than
three thousand pesos (P3,000.00) capital must register with the Securities and
Exchange Commission(SEC).
Corporation
Corporations are juridical
persons established under the Corporation Code and regulated by the Securities
and Exchange Commission with a personality separate and distinct from that of
its stockholders. The liability of the shareholders of a corporation is limited
to the amount of their share capital. It consists of at least five (5) to
fifteen (15) incorporators each of whom must hold at least one share and must
be registered with the Securities and Exchange Commission (SEC). Minimum paid
up capital: five thousand pesos (P5,000.00).
A corporation can either be stock
or non-stock company regardless of nationality. Such company, if 60% Filipino
and 40% foreign-owned, is considered a Filipino corporation; If more than 40%
foreign-owned, it is considered a domestic foreign-owned corporation.
• Stock Corporation
This is a corporation with
capital stock divided into shares and authorized to distribute to the holders
of such shares dividends or allotments of the surplus profits on the basis of the
shares held.
• Non-stock Corporation
It is a corporation organized
principally for public purposes such as charitable, educational, cultural or
similar purposes and does not issue shares of stocks to its members.
