Mandaluyong City, is dubbed as the country\\\'s Tiger City due to its robust and thriving economy. Looking around, Mandaluyong is another financial district of the city based on the number of buildings, malls, hotels and companies that have made the city their home.
In the Doing Business in the Philippines 2011 study of the International Finance Corporation, Mandaluyong ranked 9th out of 25 cities where it\\\'s easy to start a business. The study showed that starting a business in Mandaluyong requires only 19 steps and 28 days.
Entrepreneur.com.ph dissects the 19 steps that is required for you to start your business in Mandaluyong City.
Step 1. Verify and reserve the company name with the Securities and Exchange Commission (SEC)
The company can verify the availability of the company name online. Verification is free but reservation of the name, once approved by the SEC, costs PHP 40 for the first 30 days. The company name can be reserved for a maximum of 120 days for a fee of PHP 120, which is renewable upon expiration of the period.
Step 2. Deposit paid-up capital in the authorized agent bank (AAB) and obtain bank certificate of deposit
The company is required by law to deposit paid-up capital amounting to at least 6.25% of the authorized capital stock of the corporation. This paid-up capital must not be less than PHP 5,000.
Step 3. Notarize articles of incorporation and treasurer\\\'s affidavit at the notary
According to Sections 14 and 15 of the Corporation Code, articles of incorporation should be notarized before filing with the SEC.
Step 4. Register the company with the SEC and receive pre-registered Taxpayer Identification Number (TIN)
The company can register online through SEC i-Register but must pay on site at the SEC. The following documents are required for SEC registration:
a. Company name verification slip;
b. Articles of incorporation (notarized) and by-laws;
c. Treasurer\\\'s affidavit (notarized);
d. Statement of assets and liabilities;
e. Bank certificate of deposit of the paid-in capital;
f. Authority to verify the bank account;
g. Registration data sheet with particulars on directors, officers, stockholders, and so forth;
h. Written undertaking to comply with SEC reporting requirements (notarized); and
i. Written undertaking to change corporate name (notarized).
The SEC Head Office issues pre-registered TINs only if the company’s application for registration has been approved. The company must still register with the Bureau of Internal Revenue (BIR) in order to identify applicable tax types, pay an annual registration fee, obtain and stamp sales invoices, receipts and the books of accounts.
Step 5. After issuance of the SEC certificate of incorporation, pay the annual community tax and obtain the community tax certificate (CTC) from the City Treasurer\\\'s Office (CTO)
Step 6. Obtain barangay clearance
This clearance is obtained from the Barangay where the business is located and is required to obtain the business permit from the city or municipality. Barangay fees vary for each Barangay since they have the discretion to impose their own fees and charges for as long as these fees are reasonable and within the limits set by the Local Government Code and city ordinances. Barangay fees may depend on:
a. the location and the area (size in square meters) of the place of business; or
b. the company’s paid-up capital and the area it occupies; or
c. whether they issue clearance plates or certificates.
Step 7. Obtain the business permit application form from the Business Permits and Licensing Office (BPLO)
Step 8. Notarize the business permit application form at the notary
Step 9. Obtain the locational clearance from the City Planning and Development Office (CPDO)
Step 10. Receive inspection for the locational clearance from the CPDO
Scheduling of the inspection would depend on the time of the year when the application is made. Scheduling tends to take longer during the peak season, which is the first quarter of the year.
Step 11. Obtain the business permit to operate from the BPLO
To obtain the business permit, the company must file the following documents at the BPLO:
a. Duly notarized application form;
b. Barangay clearance;
c. Locational clearance;
d. SEC registration;
e. Articles of incorporation;
f. Contract of lease;
g. Pictures of establishment (front – showing left and right neighbors, and inside) on photo paper; and
h. Community tax certificate.
The applicant submits application form and requirements to the BPLO and gets an assessment of business permit fees and taxes, as well as the tax order of payment. The business permit fees and taxes are paid at the City Treasurer\\\'s Office. Inspection from the BPLO takes place after issuance of the business permit.
The city collects initial business tax for the quarter covering the period of business registration. In the succeeding quarter(s), the tax is based on the gross sales for the preceding quarter.
Step 12. Buy special books of account at bookstore
Special books of accounts are required for registering with the BIR. The books of accounts are sold at bookstores nationwide. One set of journals consisting of four books (cash receipts account, disbursements account, ledger, general journal) costs about PHP 400.
If the company has a computerized accounting system (CAS), it may opt to register its CAS under the procedures laid out in BIR Revenue Memorandum Order Nos. 21-2000 and 29-2002. The BIR Computerized System Evaluation Team is required to inspect and evaluate the company’s CAS within 30 days from receipt of the application form (BIR Form No. 1900) and complete documentary requirements.
Step 13. Apply for certificate of registration (COR) and taxpayer’s identification number (TIN) at the Bureau of Internal Revenue (BIR)
The company must register each type of internal revenue tax for which it is obligated by filing BIR Form No. 0605 and paying the annual registration fee of PHP 500. Upon registration, the BIR will issue to the company the certificate of registration—BIR Form No. 2303.
To obtain the TIN, the company has to file:
a. Barangay clearance;
b. Mayor\\\'s permit; and
c. Copy of its SEC registration.
Step 14. Pay the registration fee and documentary stamp taxes (DST) at the AAB
The company must pay DST on the original issuance of shares of stock. The rate is PHP 1 on each PHP 200 or a fractional part thereof, of the par value of such shares of stock. This payment with the BIR should be made on the 5th of the month following registration with the SEC.
Step 15. Obtain the authority to print receipts and invoices from the BIR
Step 16. Print receipts and invoices at the print shops
Step 17. Have books of accounts and Printer’s Certificate of Delivery (PCD) stamped by the BIR
After the printing of receipts and invoices, the printer issues a Printer’s Certificate of Delivery of Receipts and Invoices (PCD) to the company, which must submit this to the appropriate BIR RDO (i.e., the RDO which has jurisdiction over the company’s principal place of business) for registration and stamping within thirty (30) days from issuance. The company must also submit the following documents:
a. All required books of accounts;
b. VAT registration certificate;
c. SEC registration;
d. BIR Form W-5;
e. Certified photocopy of the ATP; and
f. Notarized taxpayer-user’s sworn statement enumerating the responsibilities and commitments of the taxpayer-user.
The company must also submit a copy of the PCD to the BIR RDO having jurisdiction over the printer’s principal place of business.
Step 18. Register with the Social Security System (SSS)
To register with the SSS, the company must submit the following documents:
a. Employer registration form (Form R-1);
b. Employment report (Form R-1A);
c. List of employees, specifying their birth dates, positions, monthly salary and date of employment; and
d. Articles of incorporation, by-laws and SEC registration.
Upon submission of the required documents, the SSS employer and employee numbers will be released. The employees may attend an SSS training seminar after registration. SSS prefers that all members go through such training so that each member is aware of their rights and obligations.
Step 19. Register with the Philippine Health Insurance Company (PhilHealth)
To register with PhilHealth, the company must submit the following documents:
a. Employer data record (Form ER1);
b. Report of employee-members (Form ER2);
c. SEC registration;
d. BIR registration; and
e. Copy of business permit.
Upon submission of the required documents, the company shall get the receiving copy of all the forms as proof of membership until PhilHealth releases the employer and employee numbers within three months.