Looking to start a business in the Philippines, but wary about doing it alone?
The day-to-day stress of running a business on your own can take a toll on your health and well-being.
Fortunately, there’s a solution – don’t do it alone!
If you’re looking to start a Philippines business, one way of doing it is with a partnership. Over 100,000 business partnerships already exist in the Philippines – yours could be next!
Not sure where to start? We have the guide for you. Keep reading to learn all about forming a partnership for your business.
What Is A Business Partnership?
A business partnership is a business that involves two or more people who intend to run the business and intended to divide the profits amongst themselves.
Partnerships are popular business types because they allow you to manage the business with someone else, instead of running it solely by yourself. A partnership can give you more room for capital and growth.
There are two types of business partnerships: general and limited. It’s important to know the difference between the two business entities so you can make the right choice for your startups.
General partnerships involve all members sharing an equal role. They are responsible for making business decisions and running the company. This type of partnership is great for those who are looking to form a business with partners who have specific knowledge or expertise.
Limited partners are only concerned with the financial aspect of the business. They essentially function as silent investors. Limited partnerships are great for those that want total control over the business’ normal operations, but need some financial support.
Once you have decided what kind of partnership business you want, you need to register it.
How To Register A Partnership
Registering a partnership in the Philippines isn’t too hard. There are only five steps.
1. Register Your Business With the SEC
First, you need to register your business with the Securities and Exchange Commission (SEC). They will require a name verification slip, articles of partnership, and a joint affidavit. You may also need an endorsement of clearance and an FIA Form 105 (if you have a foreign partner).
2. Get a Barangay Certificate
Your business must conform to the standards of the local barangay. Depending on the barangay, they may ask for a government-issued ID, SEC certification, and a contract of lease (if office space has been rented).
3. Register Your Business And Workers With The SSS
Next, you must register your employees in the Social Security System. You must do this for all permanent or temporary employees.
To register your employees in the SSS you will need:
- SS Forms R-1A and R1
- Business location map or sketch
- A photocopy of your Articles of Partnership
- SS Form R-6 or SS Form R-6 with Special Bank Receipt (also known as a Validated Miscellaneous Payment Return)
4. Obtain a Business or Mayor’s Permit
A business or mayor’s permit (also known as LGU or local government unit registration) is similar to a barangay certificate. This is to ensure that your business conforms to the local government’s standards.
5. Register With the BIR
Finally, you need to register with the Bureau of Internal Revenue (BIR). Registering with the BIR will allow you to obtain a tax identification number, issue official receipts, and register books of accounts.
Forming A Partnership Has Its Advantages
Forming a partnership for your business venture has its advantages. It can provide you with financial investments, give you partners who excel in your weaker areas, and help spread the responsibilities of running a business. The right business structure can help you successfully start a business.
If you liked this article, check out other business and law articles on our site.