When a friend of mine recently bought a franchise and wanted to open a
business in Davao, I got to witness first-hand the entire process of applying
for a business permit. I have to say that the local government has made the
process more efficient for entrepreneurs.
The
first step that my friend did was to verify the availability of the
business name. This process is free but once approved and verified by
the Securities and Exchange Commission, the entrepreneur must settle PhP
40 during
the first 30 days. The reservation can last up to 120 days, which means
you can
pay for up to PhP 120.
The law requires all aspiring entrepreneurs to make a deposit that
equals over 6 percent of the company's authorized capital stock. Typically,
this amount isn't lower than PhP 5,000 although some banks might require
additional fees.
At this point, business owners must notarize articles of incorporation
before the permit application can be filed on the SEC office. At this point,
the registration process will begin with the SEC. This can be done online via
the SEC website and you will have to secure a few documents such as
verification slip for the name, noticed articles of incorporation, notarized
treasurer's affidavit, certificate of deposit, and your statement of assets and
liabilities. Also, you must shoulder additional fee of PhP 30 for transferring
all documents to the head office in Manila.
The next steps would involve paying your community tax certificate
(CTC) and obtain barangay clearance. This clearance shall be obtained within
the same barangay wherein your business is going to be located in.
Make sure to print out the business permit application form, which you
can also download from the website of Davao City. Fill out the application form
before it can be encoded, evaluated and verified. After that, you will once
again be asked to have the form notarized at the City Legal Office.
Once the above steps had been completed, my friend was issued the TAO
or Temporary Authority to Operate. Also, the BIR requires all computerized
accounting systems to have it registered by the BIR Computerized System
Evaluation Team. This is normally done within 30 days since the application
form was received. Along with that, application for the following is also done
at this stage in the process: Certificate of Registration and Business TIN.
The last few steps that my friend took care of was to pay the
documentary stamp taxes and registration fee so that their business is
permitted to issue receipts. The final two steps involve registering the
business for the Social Security System and Phil Health Insurance Company.
It was quite a long process by the time of registering a company name
to the issuance of business permit. However, with the steps above, you can
hopefully get an idea on what you need to do when you plan on opening your own
business in Davao.
