Back in Cebu and hard to work in a super slow connection, wherein you have to reload the page a hundred times to get to the page, finally! Sigh...

In order to secure a business permit in the Philippines, we need to secure a :
1. Baranggay clearance from the Baranggay Hall.
2. Cedula

If you have these two papers, you will be able to get an application for a business permit. You may get an application for a business permit from the city hall. Each town has their own Baranggay Hall. Please consult your local area.

A Cedula is a community tax certificate. You can get this from the city hall.
All you need is a Name, Birthplace, Height, Weight, Birthdate and income. You will be charge Php1.00 for a Php1000.00 income.

Cedula cost depends on the income you declare.

Baranggay Clearance is PHP50.00

Note: Make sure the name of your business permit is the same name of your DTI (Department of Trade Industry)

Offline is a term that is underrated. You see this often at the banks, and then you'll have to hop for branch to branch, or wait in a very long line. Sometimes, when they just don't want to deal with you, easy to put up the sign, OFFLINE, even if they just go out for lunch breaks and siestas. How convenient. I wish I could do the same for my IT business, but offline means to me to wrap up and close the shop. No money, no honey.

If you have an IT business, you'll have computer problems without end. No connection all the time or if there's any, connection is too slow... what to do????

Proprietorship, concept:

The establishment, management and operations of this form of business organization is not governed by a special law, unlike in the case of corporations.

However, resort to general laws governing civil obligations and contracts or business and commercial transactions may be made.

As a general rule, foreigners may put up single proprietorship business in the Philippines in industries where the constitution and the laws do not impose any restriction or limitation on ownership equity.

In the event that non-Philippine nationals are not allowed to form single proprietorship business in a particular industry, he may still proceed with his business venture through other forms of business organizations such as corporation, partnership or joint venture.

Single proprietorship, how formed; registration requirement:

A single proprietorship is the simplest form of business organization in the Philippines. It is not encumbered by the strict regulatory laws and rules imposed upon corporations and partnerships.

Government registration of a single proprietorship business is simple. It is made through the Bureau of Trade Regulation and Consumer Protection of the Department of Trade and Industry [DTI].

Single proprietorship, liability of proprietor:

The single proprietor has unlimited liability in the sense that creditors of his business may proceed not only against the assets and property of his business but after his own personal assets and property. Creditors with whom he had incurred personal debts may also run after the assets and property of his single proprietorship business. Simply put, the law does not make any distinction between his personal affairs and his business transactions. Before the eyes of the law, they are one and the same, his business being a mere extension of his person.

Partnership, nature:

Within the context of Philippine law, a "partnership" is treated as an artificial being created by operation of law with a legal personality separate and distinct from the partners thereof. It proceeds from the concept that persons may be allowed to pool their resources and funds to engage in the pursuit of a common business objective without necessarily organizing themselves into a corporation, upon which the law imposes a much higher form of regulation, limitation and standards. Philippine partnerships operate under the concept of unlimited liability and unless otherwise agreed upon by the partners, each one of them acts as manager and agent of the partnership and consequently, their acts bind the partnership.

Partnership, governing law:

Unlike corporations whose governing law is a special law - the Corporation Code of the Philippines, partnerships in the Philippines are governed by and covered under Articles 1767 to 1867 of the Civil Code of the Philippines [circa 1950]. These are the provisions of law which govern all aspects of partnerships - from their creation, formation, existence, operation and management to their dissolution and liquidation, including the obligations of the partners to one another, to the public or third persons and to the government.

Partnership, how formed; registration requirement:

Partnerships are required to be registered with the Securities and Exchange Commission [SEC]. Registration is done by filing the Articles of Partnership with the SEC. The Articles of Partnership set forth all the terms and conditions mutually agreed by the partners thereto.

More specifically, the documents required are as follows:

[1] Proposed Articles of Partnership;

[2] Name Verification Slip;

[3] Bank Certificate of Deposit;

[4] Alien Certificate of Registration, Special Investors Resident Visa or proof of other types of visa [in case of foreigner];

[5] Proof of Inward Remittance [in case of non-resident aliens].

It bears noting that corporations are not allowed by law to become partners in a partnership.

Corporation, classes:

Corporations may be classified as follows:

[a] Stock corporations - [1] capital stock divided into shares; and [2] authorized to distribute profits

[b] Non-stock corporations - organized not for profit

Corporation, kinds by method of creation:

[a] by special law or charter

[b] by being organized under the corporation code

Corporation, how organized:

Philippine corporate entities are organized as follows:

[a] Number of incorporators:

Incorporators are required to be not less than five [5] but not more than fifteen [15].

[b] Residency requirement:

Majority of the incorporators are required to be residents of the Philippines.

[c] Qualifications:

All incorporators:

[1] must be natural persons

[2] must be of legal age

A corporation or a partnership cannot be incorporators of a Philippine corporate entity. The only way a corporation or a partnership may become stockholder of a Philippine corporation is by acquiring a stock thereof but only after it shall have been duly incorporated.

[d] Subscription requirement:

All incorporators must subscribe to at least one (1) share of stock of the corporation being organized.
Corporation, minimum subscription:

The law requires that the total capital stock to be subscribed at the time of incorporation should at least be twenty five percent [25%] of the authorized capital stock of the corporation being organized.

Corporation, minimum paid-up capital:

The paid-up capital of a Philippine corporation must not be less than PhP5,000.00. Thus, it is required that at least twenty five percent [25%] of the subscribed capital stock should be fully paid up but the amount of which should not be less than said PhP5,000.00.

Corporation, incorporation documents:

The following incorporation documents are required:

[a] Articles of Incorporation;

[b] By-laws;

[c] Treasurer's Affidavit which should state compliance with the authorized subscribed and paid-up capital stock requirements.

[d] Bank Certificate that the paid-up capital portion of the authorized capital stock has been deposited with the issuing bank.

There are "express lane" forms available at the Securities and Exchange Commission [SEC] for certain specified corporate business organizations.

Corporation, where filed:

The incorporation documents should be filed with the Securities and Exchange Commission [SEC] of the Philippines.

Corporation, what should be stated:

[a] the name of the corporation which must not be identical or deceptively or confusingly similar to any existing corporation;

[b] the purpose of the corporation;

[c] principal office of the corporation;

[d] the term or life of the corporation which should not exceed fifty [50] years. This corporate lifetime may, however, be extended for another fifty [50] years but the extension must not be effected earlier than five [5] years before the expiration of its term.

Corporation, limitation on foreign equity holdings:

The equity requirements should be strictly observed and followed in certain areas of business where the constitution and the laws of the Philippines impose limitation on foreign holdings.

Generally, however, foreigners may invest as much as one hundred percent [100%] equity in areas not covered by the Negative List under the Foreign Investments Act.

The following provisions thereof may serve as guide:

List A : Includes those reserved to Philippine nationals by the Constitution of the Philippines.

[a] exploitation of natural resources [100% domestic equity]

[b] operation of public utilities [60% domestic equity]

[c] mass media [100% domestic equity]

[d] educational institution [70% domestic equity]

[e] labor recruitment [65% dom. equity]

[f] retail trade [100% dom. equity]

[g] rural banking [100% dom. equity]

List B : Includes those regulated by law.

[a] defense-related activities

[b] manufacture and distribution of dangerous drugs

[c] nightclubs, bathhouse and similar activities

[d] small and medium-sized domestic market enterprises with paid-in equity capital of less than US$500,000.00

[e] export enterprises utilizing new materials from depleting natural resources with paid-in equity of less than US$500,000.00
Corporation, when corporate existence commences:

The corporate life or existence of a Philippine corporation commences from the time a Certificate of Incorporation is issued in its favor by the Securities and Exchange Commission [SEC].

Corporation, effect of non-use:

[a] A corporation is deemed dissolved if the corporate charter granted in its favor expires by non-use for a period of at least two [2] years from issuance thereof.

[b] A corporation is deemed suspended or its franchise revoked if it has been duly organized but it failed to operate for a period of five [5] years.

Corporation, its organization:

A Philippine corporation is organized by electing members to its Board of Directors, by electing the corporate officers thereof and/or by setting up an Executive Committee.

Board of Directors, qualifications:

The members of the Board of a Philippine corporation must possess the following qualifications:

[1] owner or holder of at least one [1] share of capital stock;

[2] majority of the members must be residents of the Philippines;

[3] they must be elected by the owners/holders of at least the majority of the outstanding capital stock.

Board of Directors, corporate acts:

For validity and legality of the corporate acts of the Board of Directors, a meeting should be fully convened and the same must be attended by at least a majority of its members. Any and all corporate acts must be duly approved by a majority of the members of the Board except when otherwise provided by Philippine laws or by the By-laws of the corporation.

Board of Directors, self-dealing rule:

A self-dealing transaction of a member of the Board of Directors becomes voidable except under the following circumstances:

[1] When the presence of such director in the Board meeting is not necessary to constitute a quorum;

[2] When his vote is not necessary for the approval of the contract or transaction

[3] When the terms of the contract are fair and reasonable and had been previously approved by the Board of Directors.

Corporate Officers, general rule:

As a general rule, the corporate officers of a Philippine corporation consist of the President who is required to be a member of the Board of Directors; the Corporate Treasurer; and the Corporate Secretary who is required to be both a resident and a citizen of the Philippines.

Other corporate officers may be designated under the By-laws of the corporation without getting afoul with the law.

The only limitation imposed by law on corporate officers is that no person can be the President and the Corporate Secretary at the same time or the President and Corporate Treasurer at the same time.

Corporate Officers, personal liability for damages:

A corporate officer of a Philippine corporation becomes personally liable for certain corporate acts under the following circumstances:

[1] When he willfully and knowingly votes or assents to patently unlawful acts;

[2] When he is guilty of gross negligence or bad faith in the conduct of the corporate affairs; or

[3] When he acquires personal or pecuniary interest which is in conflict with his duty as such officer.

Stockholders, limited liability:

The liability of stockholders in Philippine corporations is limited only to the extent of their capital contribution thereto. Other properties, holdings or assets of stockholders are not within the reach of corporate creditors. To discourage abuse of this privilege, the Securities and Exchange Commission [SEC] imposes certain reportorial requirements which should be complied with on a regular basis.

Stockholders, kinds of meetings:

The kinds of meetings involving the stockholders of a Philippine corporation are as follows:

[1] Regular meeting which is the equivalent of the annual stockholders' meeting required to be duly provided under the By-laws;

[2] Special meeting which may be called anytime as may be necessary

Stockholders' meeting, requisites for validity:

In order to be valid, the stockholders' meeting should comply with the following requisites:

[1] A notice of such meeting must be served to the stockholders

[2] A quorum, [i.e., majority of the outstanding capital stock of the corporation] must be fully established.

[3] Any and all acts of the stockholders in a meeting duly called and constituted, are deemed valid if approved by a majority of the outstanding capital stock or at least two-thirds [2/3] vote in certain cases specified under the law.

Corporation, dissolution:

As a general rule, the corporate existence of a Philippine corporation may last up to fifty [50] years, renewable for another fifty [50] years. However, such lifetime may be shortened by a vote of 2/3 of the outstanding capital stock thereof through the process called dissolution.

Partners, liability:

As a general rule, the liability of partners in a partnership organization is unlimited in the sense that the partnership creditors may run after them for any and all of their assets and property in payment of the partnership debts. Should one of the partners defray all liabilities of the partnership, he is entitled to be reimbursed by the other partners for their respective shares therein.

In the case, however, of limited partnerships, the law allows the limitation of the liability of certain partners to the extent of the amount contributed to the partnership.

Partnership, dissolution:

Philippine law allows the dissolution of partnership for any reason, provided such dissolution does not amount to a breach of contract or is prejudicial to third parties. The death of a partner or the unauthorized transfer of ownership of his share in the partnership [in case there is a limitation to this effect] results in the dissolution thereof. In other words, any change in the composition of the partnership, unless so allowed, will result in the dissolution thereof. Consequently, the remaining partners may form a new partnership with less or more partners.

Dear friends,

Sharing with you are some incidents forwarded by a friend which would be helpful to us travelling to and from the US or Philippines or from other countries too.... just to be safe.

You may want to share this with your friends too..God bless.


1. U.S. Immigration , US Dept. of Homeland Security & TRAVEL ADVISORY

FYI......... .. This information is very alarming and I think it's
worth sharing to save you from trouble and embarrassment.

A Filipino friend shared this email. His friend who works for Homeland
Security as Immigration Inspector at LAX ( Los Angeles International
Airport ) called him yesterday to share the information that happened
last weekend. A FIL-AM citizen who was flying to the Philippines for
vacation was apprehended by an Airport Immigration agent while she was
checking in her baggage and going through the X-ray machine. For some
reason, she was randomly checked and was told to open all the
envelopes inside her carry-on Coach bag.

They found 10 envelops addressed to different people in the
Philippines. When all the envelops were opened, a total of $11,000
cash was discovered. They asked the traveler if she knew the contents
of the envelope. She said no, because all the envelopes are just
"padala"and the senders didn't tell her whether or not there was money
inside.

Immigration agents showed her a Policy and guidance stating that it is
illegal to import and export over $10,000 in any Asian countries to
prevent the possibility of supporting terrorism. She was fined $500,
her name was "red labeled" by Immigration (means every time she enters
and exits the airport, she will be searched 100%),and she also missed
her scheduled flight to the Philippines for being held almost 5 hours.
Hard to believe that departing passengers from the U.S. are also
subject to the policy but looks like it is being strictly enforced
now.

The lessons learned is before you accept any "padala", make sure the
envelopes are open and you physically see the contents of it or just
plainly say "sorry but I can't accept any padala" for your own safety.

This email came from a former U.S. Embassy employee and this could be
useful to all balikbayans

2. Subject: TRAVEL ADVISORY FROM AMERICAN EMBASSY MANILA

Please share this with your friends and relatives.

Please be informed of the recent travel advisory to the United States.

However, not only pirated VCDs/DVDs are on the hot list. Customs
officials are also looking into fake bags like Louis Vuitton, Coach,
etc.

Please be informed that the American Association of Publishers (AAP)
has also alerted the American customs officers to check out for
pirated books. This information; was given to me by Patricia Judd of
the AAP.

Please warn all nursing graduates who plan to take the NCLEX and CGF
exams in the States not to bring in these pirated books because there
will be a penalty of automatic deportation as violation of
intellectual property rights. If you know anyone going from the
Philippines and coming back to the USA , with "pasalubongs" and
"padalas," please read this important enclosed advisory from the
American Embassy in Manila.

Please share with your friends.

Just a friendly reminder: if you have plans of going to the
U.S.,please take precautionary measures on all "padalas," especially
those containing fake/pirated compact discs/DVDs. US Embassy employees
have been given an advisory that as US Gov't employees, we should
abide by the U.S.laws, including Intellectual Property Rights
(anti-piracy) laws.

As an additional incentive, the Consular Section recently received a
report that the Department of Homeland Security (DHS) searched the bag
of a Filipino entering the U.S. on NW 72 in Detroit.

During the search, 70-80 compact discs, 30-40 empty DVD jackets and
10-20 DVDs were found. Since the travelers were not American citizens,
their visas were canceled and they returned to the Philippines . If
they had been Americans, they could have been subject to arrest and
criminal prosecution in addition to civil fines and penalties.

Please remember even ONE pirated item can jeopardize your trip.

Also, the fingerprinting system has successfully been instituted in
all port of entries. I suggest you bring extra identification cards in
addition to your passport to facilitate your entry in the US
Immigration. I hope this is helpful to you.