Bits of Law

Do you prefer to work alone, or would you rather have teammates by your side to fall back on? Many people often opt to go into a partnership when starting their own business. It can be considered the best of both worlds, after all. With a smaller team, you can still enjoy a reasonable size of the overall profit. Plus, you’ll have others to rely on in case any issues arise. These types of businesses also have a lot of room for capital and growth. In the first part of this series, we discussed how you can register a sole proprietorship. Today, we’ll be discussing the second type of business entity you could create. Do you want to start a partnership business of your own? Here’s everything you need to know. What is a partnership business? A partnership business is a business structure wherein two or more people agree to share ownership of the business. This makes them able to split their profits amongst each other, but this also means that all partners in a business are equally liable to any losses. Partnerships and corporations have a few similarities, namely the fact that it involves several people contributing to the business. However, it also has many differences. For example, while a partnership allows partners to transfer interest to each other, the transferee during the transaction does not automatically become a partner unless all of the partners in the corporation consent. On the other hand, in corporations, transferees involved in a transfer of shares of stock become stockholders of the corporation. Partnerships also tend to be smaller in size compared to corporations. How do you register a partnership business? 1. Register your business in the Securities and Exchange Commission. All partnerships and corporations are required to secure a certificate of registration with the Securities and Exchange Commission, or SEC, in order to operate. You can start off by going to their website to check the availability of the name of your business and fill out the application form. You can also do this at your nearest SEC office. To register in the SEC, you’ll need a Name Verification Slip and Articles of Partnership. There are also some additional requirements that you’ll need, depending on your circumstances. You’ll need a Joint Affidavit to change your partnership name, provided that it isn’t already included in your AP. You’ll also need a FIA Form-105 if one of your business partners is a foreigner.  2. Get a Barangay Clearance. Since you’ll be setting up shop in your barangay, it’s important to get your business a barangay clearance. This ensures your community that your business adheres to the standards of their local Barangay.  3. Register your business and employees in the Social Security System. Unlike many sole proprietorships, you certainly will not be working alone in this business. Other people – aside from your partners – will be working in your business as employees. Because of this, you’ll need to register both your business and your employees in the SSS so you can properly remit your employees’ monthly contributions.  To register in the SSS, you’ll need to fill out SS Forms R-1 and R-1A. You’ll also need a photocopy of your Articles of Partnership, a sketch or map of your business’s location, and a Validated Miscellaneous Payment Return. 4. Apply for a Business or Mayor’s Permit Similar to your Barangay Clearance, you’ll need a Business Permit or Mayor’s Permit so that you can run your business in your municipality. These permits are also proof that your business meets the standards of the Local Government Unit, or LGU. Note that these permits do have an expiration date, as they must be renewed once a year. Note that you’ll only be able to get these permits after you’ve secured all the other requirements in the previous steps: a Certificate of Registration from SEC, a Barangay Clearance, and a registration with the SSS.  There are also other requirements, besides those aforementioned, that you must acquire before you can obtain a Business or Mayor’s Permit. You’ll need a Business Permit Application Form, an Authorization Letter and IDs of the owner/s, and a Community Tax Certificate. If you’re renting a space for your business, you’ll need to provide the contract of your lease; if you own the place of business, bring your land title or tax declarations. Finally, you’ll need Public Liability Insurance if your business is a restaurant, cinema, mall, etc. 5. Register with the BIR Finally, you’ll need to register with the Bureau of Internal Revenue or BIR to comply with tax obligations. Registering with the BIR will also grant you permission to issue official receipts, register books of accounts, and obtain a separate Tax Identification Number for your business.  Note that you’ll need to obtain your Business Permit and Certificate of Registration from the SEC before registering with the BIR, as they are some of the requirements you’ll need to submit. You will also need the BIR Registration Form 1903 and Articles of Partnerships. 6. Register your business with other government-mandated agencies. You can register your business with other government-mandated agencies once it has begun its operations. You will need to register your employees with the Philippine Health Insurance Corporation (Philhealth) and the Home Development Mutual Fund (HDMF) and remit their shares of contribution to the aforementioned agencies. Philhealth is responsible for providing your employees with health insurance, while the HDMF administers the Pag-IBIG Fund, which provides affordable financing for its members’ housing needs. We hope that this article has helped kickstart your partnership business. Look forward to our last part of our series about different business types, we will be discussing how to register a corporation.

Are you thinking of starting a business? There are many important decisions that you must make when conceptualizing your own business. A critical one you’ll have to make is which type of business entity it will be. Would you rather have full authority,  split the responsibilities between yourself and a few business partners, or have a board of directors by your side? If you choose to pursue this goal alone, you must be ready for the workload ahead of you. In this article, we’ll be discussing sole proprietorship. link slot gacor toto macau 4d link slot gacor slot gacor maxwin pay4d toto slot link gacor situs toto macau What is a sole proprietorship? A sole proprietorship is a business structure in which you, as the founder, have full control and authority over the business. You also own all of the assets of the business and get to enjoy the profit without having to split it with a partner or co-founder. However, the downside is that you alone will be liable for any debts or losses of the business. Sole proprietorships are great for small-scale businesses since they’re the easiest to manage. For example, a small online bakeshop can be a sole proprietorship.  How do you register a sole proprietorship? Another advantage of starting a sole proprietorship is that it has the easiest and least complicated registration process. Here is a quick overview on how to register a sole proprietorship so you know what to expect.  First, you’ll have to register your business name so that no one else will get to use it. The DTI eBNRS online portal provides you with the option to register your business name online.  When registering at the DTI, it’s critical to ensure that your brand name is unique. You can use DTI’s Business Name Search to double-check if your brand name idea is already taken by an existing business. Once you have a unique business name, fill out the application form and pay the fee. You should receive your Certificate of Registration shortly afterwards. To proceed with your business, you’ll need to register it with the Local Government Units. First, you’ll have to register with the barangay. To do so, you’ll need to prepare two (2) valid IDs, your Proof of Residency, and your DTI Certificate of Registration. Once you’ve paid the fee, you will soon receive your Barangay Certificate of Business Registration. The other Local Government Unit you must register your business in is with the Mayor’s Office. You’ll need two (2) valid IDs, your Proof of Residency, your DTI Certificate of Registration, and your Barangay Certificate of Business Registration.  While you’re here, you can also process other permits that you may need, especially if your business will have a physical store. These include the Fire Permit, Sanitary Permit, Locational Clearance, etc. However, if you’re a freelancer or you’re running an online business, you can skip this step. Finally, it’s time to register your business with the BIR. Firstly, you’ll need to fill out the BIR Form 1901, which is the application to register a business for Sole Proprietors. You’ll also need to fill up and pay for the BIR Form 0605, as this form is how taxpayers pay any taxes and fees that do not require the use of a tax return. The requirements you’ll need to prepare are a valid government ID, your Proof of Residency, and your DTI Certificate of Registration.  While you’re at it, fill out the application for registering your books of accounts and receipts/invoices. You can do so using BIR Form 1905. You’ll be all done with the registration process once you’ve claimed your Certificate of Registration and your book of accounts and invoices.We hope that this article has helped any aspiring entrepreneurs who are aiming to create their own sole proprietorship. This ongoing series will also be discussing the other business entity types, such as partnerships and corporations. Look forward to what else Bits of Law has to offer in the future!

What does it mean to be married? When people think of marriage, they may first think of sharing their lives together with someone they love for the rest of their lives. From that moment on, they work as a team so that they can have a better future. Because they now share a life together, they usually begin sharing material possessions, such as a house and lot, a car, or other valuable items. However, some confusion may arise on whether a particular property is owned by one spouse, the other, or both. To answer these questions and more, we must first learn the basics of conjugal property. What is a conjugal property? Simply put, conjugal property is property that belongs to both spouses. This may include property that is obtained from either or both of the spouse’s profession, or income from the spouse’s exclusive property. How does a property become conjugal? The individual spouses both have a choice on whether their property becomes conjugal property or not, but only before the marriage. Both spouses may want to jointly own some properties while leaving others for themselves. If they would like to specify which property they would like to form part of conjugal property, they will need a prenuptial agreement. But what about any property obtained after the marriage papers have been signed? According to Article 116 of the Family Code of the Philippines, “all property acquired during the marriage, whether the acquisition appears to have been made, contracted or registered in the name of one or both spouses, is presumed to be conjugal unless the contrary is proved.”  Essentially, all property that is obtained by the couple during their marriage will always be owned by both spouses. What is a property regime, and what are the 3 regimes available? A property regime determines how a couple’s property relations are governed during their married life. If they execute a prenuptial agreement, they have the option to choose their property regime. If not, the default property regime will be applied. Here are the three available property regimes: ·      Absolute Community of Property has been the default property regime since August 3, 1988, which is the date of effectivity of the Family Code. This means that all marriages celebrated on or after this date where no prenuptial agreement was executed by the spouses  are governed by this property regime. Absolute Community of Property, under the Family Code, dictates that all property owned by either spouse becomes conjugal property after the marriage–even those owned by them before they got married. ·      Conjugal Partnership of Gains was the default property regime before the effective date of the Family Code. Conjugal Partnership of Gains still governs all marriages that took place before August 3, 1988, provided that the spouses didn’t execute a prenuptial agreement. This property regime equally divides the net gains acquired during the marriage between the two spouses. ·     Complete Separation of Properties is the option for couples who would rather not jointly own any of their properties. There is no conjugal property, and both spouses continue to own whatever property they already originally owned. A couple can choose this property regime with a prenuptial agreement before the marriage is celebrated. What happens to conjugal property if the couple separates? The conjugal partnership is terminated when the marriage of the spouses is nullified, annulled, or if the spouses undergo legal separation. Moreover, the spouses can also file a petition to have the absolute community or the conjugal partnership of gains voluntarily dissolved. Article 135 of the Family Code also enumerates the grounds considered as sufficient causes whereby one of the spouses can institute judicial proceedings for the separation of their property. Finally, conjugal partnership is terminated if one of the spouses dies. This overview of the concept of conjugal property barely scratches the surface of how to handle property as a couple, whether it be before, during or after a marriage. In the next part of this ongoing series about conjugal property, we will be going into more depth about the types of property regimes available. This way, a marrying couple knows the options available to them in regards to their property.

Is it possible to be born and raised in the Philippines, and yet not be a Filipino citizen at all? A child born in the Philippines would always be granted Philippine citizenship as long as one of their parents is a Filipino citizen. However, if both parents are foreigners, the child will not be granted Philippine citizenship. If the said parents choose to stay and raise the child in the Philippines, the latter may apply for Philippine citizenship once he or she reaches the age of eighteen (18). To achieve this, he or she would have to go through administrative naturalization. One of our previous articles discussed everything there is to know about judicial naturalization. To recap, judicial naturalization is the best procedure for foreigners who were not born and raised in the Philippines. In the second part of this series about naturalization, we will be diving into administrative naturalization.  What is Administrative Naturalization? Administrative naturalization is the legal process of granting a foreigner Filipino citizenship by naturalization, provided that such foreigner was born and raised in the Philippines. Usually, this occurs when a child’s parents are both foreigners, yet chose to raise him or her in the Philippines and not in their country of origin.  This process is governed by Republic Act No. 9139, otherwise known as the Administrative Naturalization Law of 2000. This is an act providing for the acquisition of Philippine Citizenship for certain aliens by administrative naturalization and for other purposes. Qualifications to get Naturalized There are many similarities between the qualifications to obtain Philippine citizenship through judicial and administrative naturalization. Any person desiring to avail the benefits of administrative naturalization must: Note that this shall not apply to applicants who are college degree holders but are unable to practice their professional because they are disqualified to do so by reason of their citizenship; Disqualification from Naturalization An applicant can get disqualified from applying for administrative naturalization if they meet any of the following disqualifications. Note that this list is identical to the disqualifications from applying for judicial naturalization. An applicant is disqualified if he or she: Petition Requirements There are many documents an applicant must secure before he/she files a petition. Preparing these in advance can help make the naturalization process smoother and faster. An applicant must ensure to accompany his/her application with the following: Filing of the Petition An applicant can file his or her petition with the secretariat of the Special Committee on Naturalization. He/she will need to create five copies of the petition, all of which must be legibly typed and signed, thumbmarked and verified, and with a passport-sized photograph of the applicant attached to each copy. The petition must then set forth the following information about the applicant: If the petition is complete in substance and in form, the Committee will immediately publish it in a newspaper of general circulation once a week for three consecutive weeks. The applicant will have to coordinate with and pay the newspaper company regarding the publication of his or her petition.  The committee will also forward the petition to the National Bureau of Investigation, the Department of Foreign Affairs, the Bureau of Immigration, and the petitioner’s local Civil Registrar. The petition will be posted in the offices of these government agencies. Should the petition be sufficient, the petitioner will have to go through the final test and interview. Should the petitioner also pass this final stage, a date and venue will be set for the oath-taking. Taking the oath will finally turn the petitioner into a full-fledged Filipino citizen and the Certificate of Naturalization will be forwarded to the Bureau of Immigration and the local Civil Registrar.

Are you preparing to incorporate your business? Turning a business into a corporation can be very beneficial for it in the long run. You can protect yourself from personal liability, enjoy tax benefits, and ensure the longevity of your business. But before you start the process, it’s important to fully understand the roles that make up the corporate officers of a corporation. The Board of Directors in a corporation must elect a team of corporate officers. This is according to Section 24 of the Revised Corporation Code of the Philippines. The roles to be filled up include the president, the treasurer, and the secretary. The Board may also elect other roles as it deems necessary.  These corporate officers are entrusted with the business’s day-to-day operations and execute any plans or decisions created by the corporation’s Board of Directors. If someone wants to be a corporate officer, there are certain qualifications and requirements he or she will need to meet, depending on the position he or she is aiming for. Here’s what you need to know about each role in a team of corporate officers. President The president must be a member of the Board of Directors. He or she must also own at least one share of the corporation, or at least have his or her name on the share as its owner. If it is a non-stock corporation, he or she must be a member thereof. He or she must also be a Filipino citizen. A president of a corporation must not have been convicted by final judgment of a felony punishable by more than six years in prison. He or she must also not have violated the Revised Corporation Code within five years before the election.  Treasurer In contrast to the president, the treasurer does not have to be a member of the Board of Directors. However, he or she must be a resident of the Philippines. The role of president and treasurer cannot be held by the same person, unless otherwise stated in the Revised Corporation Code. Secretary Similarly to the treasurer, the secretary does not have to be a director. He or she must also be a resident of the Philippines. Again, the role of secretary cannot be claimed by the president unless circumstances say otherwise. Compliance Officer Not all corporations are in need of a compliance officer. However, the Board of Directors must nominate a compliance officer if the corporation is vested with the public interest. The compliance officer is in charge of watching over the corporation’s operations and business transactions. This is to ensure that the corporation is following all of the necessary legal and internal rules. Other Corporate Officers While the president, secretary, and treasurer are required roles in a team of corporate officers, the Board of Directors may choose to fill other roles as they deem necessary for the corporation. For example, the Board of Directors may also elect a vice-president, a cashier, an auditor, and/or a general manager. Any two or more of these positions can be held by the same person at the same time. The only exception to this is that no one can hold the roles of President and Treasurer or Secretary concurrently. Qualifications and Rights of Corporate Officers While the base qualities of each corporate officer were listed above, the other qualifications are to be decided by the corporation’s by-laws. By-laws refer to the set of rules created by a company, listing the rights and duties of the officers, the Board, and/or the stakeholders. These by-laws may elaborate on the other requirements a potential officer must meet, as well as how an officer is elected or appointed. 

Can a foreigner legally become a Filipino citizen? There are many reasons why someone might apply to become a naturalized citizen in the Philippines. He or she may be born and raised in the Philippines, but is legally listed as a citizen of his or her foreign parent’s country. He or she could also be a total foreigner with no Filipino ancestry or lineage, but wants to become a Filipino citizen for personal reasons. Regardless, he or she will have to go through naturalization to gain citizenship. Depending on his or her situation, he or she may have to go through administrative, legislative, or judicial naturalization.  This article is the first out of three parts of a series regarding naturalization. Here, we will be focusing on judicial naturalization. These are the things that you need to know. What is Judicial Naturalization? A foreigner who wishes to become a Filipino citizen can consider judicial naturalization if he or she was not born and raised in the country. One common example of such a situation is when a foreigner marries a Filipino, and the couple decides to live together in the Philippines. Another is when a Filipino is born and raised in another country, likely due to immigrant parents, but decides to stay in the Philippines once he or she is of age to do so. This process is governed by Commonwealth Act No. 473. The foreigner applicant can apply for naturalization in the Regional Trial Court where he or she has resided for at least one year before filing the petition. Qualifications to get Naturalized To become a Filipino citizen is to achieve all of the same rights and protection that a natural-born citizen already has. Because of this, the qualifications that one must meet are numerous and rigorous. A successful naturalized citizen: In addition, the ten (10) years of continuous residence required under the second condition can be reduced to five (5) years if the petition has any of the following qualifications: Disqualification from Naturalization On the other hand, an applicant that meets any of the following is automatically disqualified from becoming naturalized Filipino citizens: Declaration of Intention Before an applicant can file a petition for admission to Philippine citizenship, he or she must first file a Notice of Intent, which is a declaration under oath that it is his or her genuine intention to become a citizen of the Philippines. This declaration shall include the applicant’s:  This declaration is not valid until lawful entry for permanent residence has been established and a certificate showing the date, place, and manner of his or her arrival has been issued. The declarant must also state that he or she has enrolled his or her minor children of school age in a recognized school, where Philippines history, government, and civics are a part of the school curriculum. They must be enrolled in this school during the entire period of the residence in the Philippines required of the declarant prior to the hearing of his/her petition for naturalization as Philippine citizen. Finally, the declarant must furnish two photographs of him or herself. As an exception, this Notice of Intent may be dispensed with if the applicant was born in, or studied his primary and secondary education in, or resided in the Philippines continuously for thirty (30) years. The Filing of Petition Once a year has passed after filing the Notice of Intent, the applicant can finally file a Petition for Admission to Philippine Citizenship. He or she must file with the petition in triplicate, along with two photographs or himself or herself. The petition must then contain the following information: The petition must then be signed by the applicant in his or her own handwriting and be supported by the affidavit of at least two (2) credible persons, stating that: Finally, the petition shall also set forth the names and post-office addresses of these witnesses as the petitioner may desire to introduce at the hearing of the case. The certificate of arrival and declaration of intention must be made part of the petition. Process of Achieving Citizenship Once the petition has been filed, it will be published in the Official Gazette once a week for three consecutive weeks. It shall also be published in one of the newspapers of general circulation in the province where the petitioner resides.  If the court believes that the petitioner has all of the qualifications required and none of the disqualifications specified by Commonwealth Act No. 473 and has complied with all requisite herein established, then it shall order the proper naturalization certificate to be issued and the registration of the said naturalization certificate in the proper civil registry. Once the decision has become final, a naturalization certificate shall be issued to the petitioner. This shall state the following: In addition, a photograph of the petitioner with the dry seal affixed thereto of the court which granted the petition must be affixed to the certificate.

What can you do with shares of stock in a corporation? Shares of stock that were not traded in the Philippine Stock Exchange are considered personal property under Philippine law. This grants you plenty of freedom regarding what you can do with your shares; you can sell, gift, transfer, or assign them to someone else as you please. This is affirmed by Section 63 of the Revised Corporation Code. There are many different ways you can relinquish your hold on your shares, whether you wish to sell them or give them away. However, the process of transferring them from one person to another stays relatively the same. Here is what you need to know about transferring shares.  What is a stock certificate?  Since a share of capital stock is an intangible personalty (meaning it does not have a physical form), the parties involved in the transfer might not have a clear idea of what is being transferred. This is in contrast to personalty with a physical form, such as tangible goods. To solve this, you must ensure that the parties are aware of what is being conveyed. This is achievable with a stock certificate.  A stock certificate represents a shareholder’s shares of stock. It dictates the number of shares owned by the shareholder, an identification number, date of purchase, and signatures to verify its legitimacy. Stock certificates can be kept online, but you can also request a physical copy. How do you transfer shares? What taxes should one keep in mind when transferring shares? There are certain taxes that must be paid by either the giver or the receiver when transferring shares of stock, regardless of the method of transfer (through selling, gifting, exchanging, etc.). The transfer of shares of stock in a Philippine corporation is subject to the following: What are the requirements of a valid transfer of shares? A transfer of shares will only be acknowledged if it has fulfilled the following requirements, depending on whether the shares of stocks are represented by a stock certificate or not. If the shares are represented by a stock certificate, you must comply with the following requirements: On the other hand, a transfer of shares can still be acknowledged in situations without a stock certificate, such as when a certificate has not yet been issued or if the certificate is not in the possession of the stockholder. In that case, the shares of stock may still be transferred as follows: