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6 FAQs about Extrajudicial Settlement You Need to Know

What do you do if a loved one dies without a will? One of our previous articles covered the law of intestate succession. To recap, intestate succession is the distribution of assets of someone who died without a written will. This process could be handled by the law and the state, who will then divide and distribute it to the compulsory heirs. However, the distribution of assets doesn’t always have to involve the court. It could instead undergo a process called an Extrajudicial Settlement of Estate. Here’s what you need to know about this practice. What is an Extrajudicial Settlement of Estate? Extrajudicial Settlement of Estate is a procedure in which all heirs can agree on how the deceased’s assets are distributed. Extrajudicial means ‘out-of-court’; because all heirs are in agreement, there is no need for them to go to court. Once everyone has agreed on how they can divide the assets, they will have to create a Deed of Extrajudicial Settlement of Estate. This is to set the agreements in stone. What are the requirements of an Extrajudicial Settlement of Estate? There are several requirements that must be met first before the deceased person’s assets can undergo an Extrajudicial Settlement of Estate. These include the following: In addition, the Deed of Extrajudicial Settlement of Estate must be notarized and filed with the Register of Deeds. The Deed must also be published in a newspaper of general circulation once a week for three consecutive weeks. Otherwise, the settlement will not be considered valid. What documents are required for the Extrajudicial Settlement Process? It’s important to gather the following documents before you start the Extrajudicial Settlement Process:  What steps are in the Extrajudicial Settlement Process? Miscellaneous Questions What if an heir doesn’t want his or her claim to the estate? If one or more heirs don’t want their claim to the estate, all of the heirs must instead create an Extrajudicial Settlement with Waiver of Rights. Besides the addition of the Waiver of Rights, it’s identical to a regular Deed of Extrajudicial Settlement. The Waiver of Rights allows one or more heirs to relinquish their claim to the estate. What if there is only one surviving heir? If there is only one surviving heir that can claim the estate, he or she can instead execute an Affidavit of Self-Adjudication. This is a statement written under oath by the heir, declaring that he or she is the only heir of the deceased. This allows him or her to adjudicate the entire estate to him/herself. Conclusion Completing the procedure of an Extrajudicial Settlement of Estate can be quite difficult. Heirs might not agree with how the property is divided between them, and additional steps could force the process to prolong itself. But properly handling the deceased’s estate is crucial. One way to make it easier is by gaining the help of a skilled inheritance lawyer. Your lawyer can help you with gathering your requirements, drafting your Deed of Extrajudicial Settlement, and generally help you out throughout the entire process.

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The Basics of: The Special Power of Attorney Document

What do you do if you have a task concerning legal or financial matters, but it just so happens that you’re currently in another city or country or that you’re ill, so you aren’t in the position to accomplish it? If the task in question is time-sensitive,you might find it hard-pressed to get things done. Thankfully, you would still be able to accomplish your tasks if you authorize someone to do them for you.. All you would need is a Special Power of Attorney. Here’s everything you need to know about this legal document. What is a Special Power of Attorney? A Special Power of Attorney (or SPA for short) is a document that allows one person to act on behalf of another person. These usually include major legal, property, or financial decisions. During the SPA’s effective period, the person authorized to carry out the action is called the agent. Meanwhile, the person granting the agent the authority to act on his or her behalf is called the principal. The document must be notarized to take effect.  Anyone of legal age and who has the capacity to act on the principal’s behalf can be appointed as an agent, as long as they have the principal’s full trust.  You don’t need a SPA for everything you need done for you. Private matters, such as buying furniture on your behalf or taking your child to school, don’t require an SPA. It’s best to get one if you’re dealing with matters regarding real estate, legal matters, transactions with private corporations, or tasks in government offices.  When do you need a Special Power of Attorney? There are many reasons why you might need an SPA to allow someone else to handle your affairs. One common reason is illness. If your medical condition prevents you from performing such actions yourself, you can authorize someone capable and trustworthy to do it for you. You may also need a Special Power of Attorney if you’re currently abroad, which bars you from performing these actions yourself. In that case, you can appoint an agent in the Philippines to accomplish all your tasks. Note that instead of the usual SPA which simply needs notarization by a Notary Public where the said SPA is executed, you would instead need a consularized SPA. The difference between a normal SPA and a consularized SPA is that since you are signing it abroad, the SPA cannot be simply brought to the Philippines for notarization before a Notary Public and it can only have legal effect if it is consularized. You can get the SPA consularized in the Philippine Embassy.   Also, if you’re residing abroad, you might have heard of the term “apostille”. You can also have the SPA apostilled in the relevant government offices in your locality, which produces the same effect as consularization. How do you get a Special Power of Attorney? The process of getting a Special Power of Attorney document is fairly simple. First, you can find several available templates for the document online. Look for one that is both presentable and capable of conveying which powers you want to grant to your agent. Alternatively, you can also write your own SPA instead of looking for a template. Keep in mind the necessary details you need to include when drafting your document: Once your SPA document is complete, print out three copies: one for the principal, one of the agent, and one for the Notary Public. After that, all you need is to go to the Notary Public for notarization. Be prepared for the notarial fees; these could range from P500 to P1,000. A Special Power of Attorney is crucial if you’re unable to accomplish an important task by yourself. Thankfully, the process of getting one is quite simple, easy, and inexpensive. By knowing this information, you’ll be able to get your SPA document without any issues.

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Your Best Guide to VAWC Laws in the Philippines

Household and relationship abuse are terrifying, yet all too common occurrences all over the country. It’s crucial to ensure that those perpetuating abuse are unable to escape the consequences of their actions. Republic Act No. 9262, or the “Anti-Violence Against Women and Their Children Act of 2004”, seeks to address some of these issues.  In the event that you, your children, or a loved one faces any form of physical or psychological violence, It’s crucial to know your rights. This article aims to break down each part of R.A. 9262 for your ease of understanding. The Basics The Anti-Violence Against Women and Their Children Act of 2004 defines violence against women and their children, lists out protective measures for the victims, and prescribes penalties for the perpetrators. The Regional Trial Court designated as a Family Court shall have original and exclusive jurisdiction over cases of violence against women and their children under this law.  It should be noted that lesbian relationships, whether sexual or dating, are not exempt from the law. This means that women are also liable under RA 9262. Meanwhile, a male spouse or partner suffering the abuse of his wife or partner does not fall under this law. Instead, he would have to file a complaint or case under the Revised Penal Code. Definition of Terms Section 3 of RA 9262 defines all of the terms used in this act so that it’s easier to understand going forward. These terms include the following: Acts of Violence Against Women and Their Children Section 5 of RA 9262 clarifies which acts qualify as a crime of Violence Against Women and their Children. These include the following: Penalties The penalties of committing an act listed in RA 9262 vary and depend on the severity of the act.  Act of Violence Duration of Penalty Attempt to harm the victim 1 month and 1 day – 6 months  Place the victim in fear of imminent physical harm 1 month and 1 day – 6 months Threaten to or does self-harm to control the victim’s actions or decisions 1 month and 1 day – 6 months Restrict the victim from doing something through force or intimidation 6 months and 1 day – 6 years Force the victim into doing something through force or intimidation 6 months and 1 day – 6 years Attempt to or do any form of sexual violence on the victim 6 years and 1 day – 12 years Cause emotional or psychological distress to the victim through behaviors such as stalking, destroying the victims property, etc. 6 years and 1 day – 12 years Cause mental or emotional anguish, public ridicule, or humiliation to the victim 6 years and 1 day – 12 years If the acts are committed while the woman or child is pregnant or committed in the presence of her child, the penalty to be applied shall be the maximum period of penalty prescribed in the section. In addition to imprisonment, the perpetrator shall pay a fine of not less than P100,000.00, but not more than P300,000.00. He or she must also undergo mandatory psychological counseling or psychiatric treatment and shall report compliance to the court. Protection Orders While a victim can file a case against his or her perpetrator for his or her act of violence, it doesn’t guarantee with certainty that the perpetrator won’t endanger the victim again. To prevent this from happening, the victim can apply for a protection order. A protection order prevents further acts of violence against a woman or her child. It also provides these victims other forms of necessary relief. A protection order aims to safeguard the victim from further harm, minimizes disruption in the victim’s daily life, and facilitates the victim’s opportunity and ability to independently regain control over her life. There are three types of protection orders that may be issued under this Act: the barangay protection order (BPO), temporary protection order (TPO) and permanent protection order (PPO). Types of Protection Orders As aforementioned, there are three types of protection orders: the temporary protection order, permanent protection order, and barangay protection order. Barangay Protection Orders, or BPOs, refer to the protection order issued by the Punong Barangay ordering the perpetrator to desist. A Punong Barangay shall issue the protection order to the applicant on the date of filing. If the Punong Barangay is unavailable to act on the BPO application, the application shall be acted upon by any available Barangay Kagawad. BPOs are effective for fifteen days. Temporary Protection Orders, or TPOs, refer to the protection order issued by the court on the date of filing of the application. They are effective for thirty days. The court shall also schedule a hearing on the issuance of a PPO prior to or on the TPO’s expiration date.  Finally, Permanent Protection Orders, or PPOs, refer to protection orders issued by the court after a notice and hearing. The court shall conduct the hearing on the merits of the issuance of a PPO in one day. If the court is unable to conduct the hearing within one day and the TPO issued before is due to expire, the court shall continuously extend or renew the TPO for a period of thirty days.  These protection orders shall include any, some, or all of the following reliefs: All TPOs and PPOs issued under this act shall be enforceable anywhere in the Philippines. A violation shall be punishable with a fine ranging from P5,000.00 to P50,000.00 and/or imprisonment of six months. Who can file for a Protection Order? While the victim can file a Petition for Protection Order, other parties can also file it for him or her. These include his or her parents; other relatives within the fourth civil degree of consanguinity or affinity; social workers; police officers; Punong Barangay or Barangay Kagawad; the victim’s lawyer, counselor, therapist, or healthcare provider; or at least two concerned citizens of the municipality who have personal knowledge of the offense committed. Where can I

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How to File an Income Tax Return

How do you earn your income? A majority of people make a living by gaining employment at a company. By working at a company, you’ll be able to earn compensation income. Those who make a living solely through compensation income usually don’t have to worry about filing their own income tax returns, as their employer handles it for them. However, many people aspire to gain income from multiple sources, such as through freelancing. If you’re thinking of doing the same, you must first learn about the basics of filing an income tax return. What is an Income Tax Return? Income tax refers to the tax on any salary or income, regardless of its source, that corresponds to an income tax rate. According to the BIR, the annual income tax return “summarizes all the transactions covering the calendar year of the taxpayer.” Individuals and enterprises alike must pay their taxes on or before April 15 every year. It’s crucial to follow this deadline to the letter. Depending on the severity, purposely missing your ITR could either result in a fine or a few years of imprisonment. Ensure that you stay on top of your income tax if you’re required to file them yourself. Who is required to and exempted from filing an ITR? As a general rule of thumb, all Filipino citizens with a source of income are required to file an ITR. Aliens and foreigners only need to file an ITR for any sources of income inside the Philippines. Again, employees of companies are still required to file an ITR, but their taxes are usually taken care of by their employers. In specifics, those who are required to file an ITR include: Those who are not required to file an ITR include: What are the methods of filing an ITR? There are many ways you can file your ITR, making it easily accessible for everyone. However, do note that you may be required to use a specific method, depending on your circumstances. 

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3 Types of Separation: Everything You Need to Know

Because the Philippines currently doesn’t have a divorce law, you may find your options limited if you wish to separate from your spouse. Currently, a separating couple has three options under the Family Code: legal separation, nullity of marriage, or annulment. The best course of action varies case to case. The couple will have to take several factors into account, such as the circumstances of their marriage, the grounds for their separation, the cost of the legal process, and whether they want the marital ties to be severed or not.  In this article, we break down everything you need to know about legal separation, nullity of marriage, and annulment. Nullity of Marriage A Declaration of Nullity of Marriage applies to a marriage that is null and void from the beginning, due to it missing one or more of the essential or formal requisites of marriage. Because the marriage was never valid, the marital ties are severed and both parties will be able to remarry.  Grounds for Nullity of Marriage Again, a married couple can file for nullity of marriage if said marriage is considered void ab initio, or void from the beginning. According to Article 35 of the Family Code, the following marriages fall into this category: In addition to those under Article 35, the following marriages are also considered void from the beginning:  Annulment You can get your marriage annulled if it was valid at first, but because of the existence of the grounds under Article 45 of the Family Code, the marriage will be annulled. This is in contrast to the declaration of nullity of marriage, which can only apply to marriages that are null from the beginning. Grounds for Annulment According to Article 45 of the Family Code, you can get an annulment on any of the following grounds: Process of Annulment and Nullity of Marriage  The main difference between annulment and declaration of nullity of marriage is whether or not the marriage was considered valid from the beginning. Because of this, there are many similarities between the steps in filing for the two separation procedures. With that in mind, here is a rough outline of the steps in filing for annulment of declaration of nullity of marriage. However, note that there will still be differences between the two procedures and that some situations may add or skip over certain steps, depending on the circumstances. Legal Separation Legal separation is a legal remedy for couples suffering from a problematic marriage. It differs from both annulment and declaration of nullity of marriage in that the marriage is still considered valid and subsisting. Because of this, neither party is allowed to remarry in the future.  However, it does allow them to live apart and own separate assets. By doing this, the guilty party cannot inherit any of the innocent party’s assets. One difference between a legal separation, an annulment, and a declaration of nullity of marriage is that legal separations are almost always borne from a conflict between the two parties. In contrast, a separating couple doesn’t necessarily have to have conflict to get annulled or file for a declaration of nullity of marriage. Grounds for Legal Separation The primary purpose of a legal separation is to provide a way for problematic marriages to separate safely, even if the marriage bond is not dissolved. Under Article 55 of the Family Code, one may file a petition for legal separation within 5 years from the time of the occurrence of the following grounds: Process of Legal Separation In contrast to the process of an annulment, legal separation is a more combative court case. Here is an overview of how a legal separation is processed. Note that these steps may vary depending on the situation and circumstances. Conclusion Whether or not the Philippines will ever get a divorce law remains unclear, though there are steps being taken to legalize it. For now, any couple looking to get separated can still consider their existing options carefully, so they can decide which is the best move for them. If you are in need of a lawyer specializing in Family Law, you can contact Sadsad Tamesis Legal and Accountancy Firm’s team of lawyers today.

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What to Know About: Grave and Light Threats

Have you ever been on the other end of a threat? Many people throw threats left and right without ever meaning to follow up on them. More often than not, they’re are lightly given to friends as a joke. But a serious threat that causes fear or mental disturbance should not be taken lightly. Threats come in three separate categories. These can help differentiate the gravity and intention of each one that you may come across. Here’s what you need to know about the difference between grave threats, light threats, and other light threats. What are Grave Threats? You receive a grave threat if someone threatens to commit a crime that could potentially harm you, your family, or your property. It must amount to some form of legal crime to be considered a grave threat. Grave threats are punishable under Article 282 of the Revised Penal Code. This type is further divided into three categories: An example is from Caluag vs People, G.R. No. 171511, in which the petitioner held a gun to one of the two private complainants and verbally threatened her by uttering, to wit, “Saan ka pupunta gusto mo ito?” What are Light Threats? A light threat does not amount to a crime, but still causes fear or mental disturbance. This type of threat also always comes with a condition that the victim must fulfill. For example, instead of being threatened with murder or property damage, the offender might instead threaten to share the victim’s darkest secret if he/she doesn’t do what the offender says.  Light threats are punishable under Article 282 of the Revised Penal Code. What are Other Light Threats? Finally, other light threats also do not amount to a crime, nor is there ever a condition for the victim to fulfill. The offender should also never have intended to follow through with the threat that he/she made towards the victim. Other light threats are punishable under Article 285 of the Revised Penal Code. An example is from Ignacio vs People, G.R. No. 226991, wherein Ignacio was found guilty of Other Light Threats by brandishing a bolo knife to the private complainants and threatening them with it. No condition was given, and the petitioner never intended to follow through with her threat. If you feel fearful for your safety after receiving a threat, remember that you have the power to seek legal help. Here at Sadsad Tamesis Legal and Accountancy Firm, we will always strive for a positive and just outcome for their clients, for their future and peace of mind. Book a consultation with our team of lawyers today.

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Intestate Succession: How to Handle Inheritance without a Will

Have you written out your will yet? Writing a will isn’t in many people’s minds. Wills aren’t common in the Philippines, and even then, many believe they’re too young to think about it. Unfortunately, death is often unpredictable and can strike the most unlikely of people. A written will can help grieving loved ones figure out how to handle the deceased’s assets and property without worrying about whether they’re going with or against his or her wishes. If a loved one dies without a will, you’ll have to handle their property in accordance with intestate succession. This is in accordance with Article 960 of the Civil Code. Here is a brief guide to intestate succession, so that you know what to expect and how to handle the assets and property of a deceased loved one. 1. What is a will? A will, or a last will and testament, is a legal document dictating how the writer of the will would want his or her assets to be distributed after his or her death. Many choose to divide their assets up to give to any heirs or descendants. They can also give their assets to other family members, non-family members, an organization, or a charity. They can even dictate when these assets should be given to the heirs. A last will and testament will only take effect after the writer’s death. The will must also name an executor, who will handle the distribution of assets.  2. What is intestate succession? The handling of assets is simple enough if the deceased had a will prepared. But what happens when a person dies without having written a will at all? The distribution of assets without a written will is called intestate succession. The law and the state will handle the assets, and will divide and distribute it to a list of certain compulsory heirs. 3. Who are the compulsory heirs in intestate succession? The list of compulsory heirs goes in accordance with priority. Those listed towards the top should have  the closest relationship to the deceased and are as follows: Conclusion Dying without having written a will means that your loved ones wouldn’t know what your intentions were with your assets. As a result, intestate succession may distribute your assets in ways you might not agree with otherwise. It’s a good idea to think of your will as soon as now, especially if your assets are plentiful.  If you plan on writing your will, it’s a good idea to hire an estate lawyer. An estate lawyer can either help you with the process or even write the will on your behalf. He or she can also ensure that your wishes are fully carried out. If you’re looking for an estate lawyer to help you with your will, consider booking a consultation with Sadsad Tamesis Legal and Accountancy Firm’s team of lawyers.

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Your Helpful Guide to Property Transfer Taxes and Fees

Do you want to buy real property? If you do, learning about real property taxes and fees is critical. Failing to pay can result in different consequences for you, depending on which one you miss. There are also a few types of taxes and fees that the seller will handle.  Keeping track of what payments both parties need to settle will help make the transferring process easier. Prepare yourself with this quick overview of the different taxes and fees you and your seller will encounter, so that you’ll always stay on top of your payments. Buyer’s Taxes and Fees Registration Fee The simplest fee to consider when transferring a property is the registration fee, which you as the buying party will shoulder. Completing this payment is required in order to make the transfer of ownership official.  To calculate the registration fee, take the selling price, zone value, or fair market value of the property, whichever one is the largest. The final cost for registration is 0.25% of that number.  Transfer Tax A municipality imposes the transfer tax on any method of transferring real property ownership.  You will pay this tax to the local government. The transfer tax is not to be confused with estate taxes, which are paid to the BIR.  To calculate transfer taxes, you will still have to take the largest number among the property’s selling price, zone value, or fair market value. The transfer tax that you will have to pay is 0.75% of that number in Metro Manila, and 0.5% in other provinces. Documentary Stamp Tax Finally, you’ll have to pay the Documentary Stamp Tax upon finalizing the transfer. Documentary Stamp Tax, or DST, refers to the tax that is on any document or paper proving a sale or transfer. This tax applies to, among other things, the sale or transfer of stocks and properties.  Calculating the DST for the transfer of real property works similarly to the transfer tax and registration fee. Take the highest number between the selling price, zone value, or fair market value of the property. You will have to pay 1.5% of that number for your DST. However, note that the DST is applied to a wide range of documents, and there are different ways to compute each one. The best way to see how to compute the DST for your document is by checking BIR’s Tax Rate Table. Seller’s Taxes and Fees Capital Gains Tax The government imposes the capital gains tax, also known as CGT, on the profit that the investor received from selling or exchanging their capital assets. Capital assets refer to both stocks of a domestic corporation and real property, but we will focus on real property for now.  To get the CGT of a real property, take whichever is the larger number between the zonal value or selling price on the deed of sale. The seller will have to pay 6% of that number for your CGT. Realty Tax Realty tax refers to the tax imposed on all buildings, land, improvements on the land or building, and machinery. Section 197 to 283 of the Local Government Code states that all local governments can impose a realty tax. These governments will then use the collected tax to provide their public services to the community. If your seller has any unpaid realty taxes, he or she will have to settle them before completing the transfer of title.  There are a few more steps towards calculating the realty tax. First, check the real realty tax rate of the property’s area. If it’s within Metro Manila, the rate is 2%. Likewise, if it’s within the provinces outside of Metro Manila, the rate is 1%.  Next, calculate the property’s assessed value. You can get this by multiplying your property’s market value by its assessment level. Here are the assessment levels, based on Section 218 of the Local Government Code: For example, if you have a house worth P2,000,000, you’d multiply that by the residential assessment level, which is 20%. Your property’s assessed value would then be P400,000. Multiply your property’s assessed value by the area’s tax rate to get your yearly realty tax. Say this house is located in Metro Manila. Multiply P400,000 with 2% to get P8,000.  The final step is to add an additional 1% of your property’s assessed value for the Special Education Fund, which aims to fund the local schools in the area. In this case, 1% of P2,000,000 would be 20,000. Adding this all up would finally bring your realty tax to 28,000 per year. You will have to shoulder this tax instead once the transfer is fully complete and the property is officially yours. Therefore, it’s a good idea to keep this in mind for the future. Conclusion Settling all of these taxes and fees on time can speed up the process of the transfer of title. Ensure that both you and your seller handle your respective payments on time. Are you looking for a real estate lawyer to help you with your transfer of title? You can rely on Sadsad Tamesis Legal and Accountancy Firm’s team of lawyers to help you throughout the transferring process.

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Do You Have a Lost TCT? What to Know About: Getting a New Certificate of Title

Have you recently purchased real property, such as a plot of land or a house and lot? The first thing to do upon receiving ownership of real property is to put your Transfer Certificate of Title (TCT) somewhere safe. Your title is how you’ll be able to prove that you own the land or property in question. Without this document, you won’t be able to sell, borrow against, or give your property to anyone. You’ll also need your TCT if you plan on passing down your property to any heirs. However, sometimes incidents happen. It can get misplaced, or caught in an unfortunate fire or flooding. If you find yourself having lost or damaged your TCT, don’t worry. There’s still a way to prove yourself as the true owner, even without the original copy. According to Section 109 of Presidential Decree No. 1529, you can get a new copy through a Reissuance of Title. If you need a new copy of your TCT but are unfamiliar with the court process, here’s a quick overview of what to expect. Hire a Lawyer and File an Affidavit of Loss First and foremost, it’s essential that you look for and hire an experienced lawyer. A good lawyer will be able to speed up the process of the reissuance by gathering and organizing your evidence, guiding you with the requirements you have to obtain, handling other court requirements, and keeping you updated throughout the process.  Afterwards, it’s time to file an Affidavit of Loss. This affidavit is a sworn statement that will notify the Registry of Deeds that your previous TCT has been lost or destroyed. This, in turn, will kick start the rest of the reissuance process. This Affidavit of Loss will include information such as the name and details of the owner; a description of the property; a description of how the property was lost; and why you are filing an Affidavit of Loss. File a Petition Requesting for Reissuance After filing your Affidavit of Loss, your lawyer will draft a petition requesting for the reissuance of the TCT. This petition will be filed with the Regional Trial Court. Attached to that petition are pieces of documentary evidence to support the claims of ownership which are stated there. These will include the Affidavit of Loss, Official Receipts, Tax Declaration, Tax Clearances, and any other documents that your lawyer will require from you.. Testify in Court To get a new copy of your TCT, you will need to prove to the court that you have truly lost the original copy and that you are the rightful owner of the property covered by the TCT. While requirements and documents you had gathered in the previous step serves this purpose, the law requires that you also testify in court so that you can confirm the statements and claims in the petition and to identify the documents attached before the judge.. If you have a co-owner, he or she may be allowed to testify on your behalf.  Wait for Court Decision and File at the Registry of Deeds Once you have gone through all these processes and you have submitted your evidence, the only thing left to do is wait for the court’s final decision. Normally, this would end in your favor, especially if you had done your due part in ensuring your testimony is watertight, and documents are all genuine. However, there is a chance that someone will oppose the reissuance, which will further complicate and prolong the case. He or she may try to claim that you don’t have ownership of that property. He or she may also try to claim you never lost your original TCT in the first place.  So long as you and your lawyer have a strong case, it’s likely that the court will grant your petition for reissuance. Afterwards, you’ll have to register the Court Decision with the Registry of Deeds. This will finally lead to the reissuance of your new Certificate of Title.  Conclusion Take note that the court process of reissuing a Certificate of Title can take up to at least a year. This is why it’s essential for you to have a trustworthy, efficient, and experienced lawyer by your side. If you need a lawyer for your Reissuance of Title case, you can Sadsad Tamesis Legal and Accountancy Firm (STLAF) and book a consultation today.

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Books of Accounts: Simplified and Explained

Having a book of accounts isn’t just for the sake of organization. If you’re handling a business establishment, you must manage a book of accounts. In fact, it’s one of the first things you have to register when applying for a Certificate of Registration with BIR. This doesn’t just include large corporations; even freelancers and smaller businesses need to keep a book of accounts. Your book of accounts should record all business transactions throughout your business, along with proof of transactions, such as receipts. These recordings are to ensure that your business is properly paying its due taxes to BIR, so ensuring your book of accounts is accurate and updated is essential. Be wary of letting your book of accounts go unupdated, as it could lead to harsh penalties. Here are the basics of your books of accounts so that you can start recording your business transaction Formats of Books of Accounts  BIR currently accepts three formats of book of accounts, and you are free to choose whichever format works best for you and your business. However, do note that if you are a large taxpayer (meaning you have total annual gross sales/receipts of at least P1,000,000,000), you are required to use a computerized book of accounts. Manual Books of Accounts Chances are you’ve seen books of accounts for sale in an office supply store or bookstore. These are preprinted with all the required components of a book of accounts, and each entry has to be handwritten. You can register a manual book of accounts once you’ve gotten your Certificate of Registration from BIR. Once you have filled up your first book of accounts, you’ll be able to register another volume. Computerized Books of Accounts Finally, computerized books of accounts are programs where you can log your transactions, with functions and features that can help with efficiency. Many programs are available to purchase, but you can also hire IT experts to create one just for your business. However, do note that BIR is stricter with approving these programs. They have to put it under rigorous testing to ensure that it complies their rules and regulations. Again, large taxpayers must use computerized books of accounts. Loose-leaf Books of Accounts Finally, loose-leaf books of accounts combine both manual and computerized formats. You would create entries through a computer, usually using a template. Then, you can print these entries out, bind them, and it to BIR as your book of accounts. Note that you must submit your template to BIR first for approval before you can use it for your entries. During registration, you must also justify why a loose-leaf book of accounts is the best format for your business. Basic Types of Books of Accounts General Journal The General Journal is where you would initially put your accounting transaction. Many also call it the ‘original entry book’ for this reason. When creating an entry in the General Journal, you’d have to write down the date, description, reference code, and the debit or credit amount.  General Ledger On the other hand, the General Ledger is also what taxpayers call the “book of final entry.” Here, you’ll be writing down summaries of your transactions that you previously recorded in your General Journal, as well as the other journals in our book of accounts. You’ll essentially follow the same format, too: account name, date, reference code, and the amount in either debit or credit.  Cash Receipt Journal To keep your cash receipts in order, you’ll first have to input them in your Cash Receipt Journal, then transfer them to the General Ledger later on. To successfully record a cash receipt, you’ll need to write down the date, the official receipt number, description, amount, and other account titles (if any). Cash Disbursement Journal Likewise, you’ll need to keep track of your cash disbursements in order to summarize them in the General Ledger later. To do so, you’d write down the date, description, amount, and other amount titles. If you’re a non-VAT registered taxpayer, these four basic types are all you’ll need for your book of accounts. However, if your business is VAT-registered, there are two more journals you’ll need to update. Sales Journal You’ll need to record every sales transaction that your business completes in your Sales Journal. The format you’ll have to follow includes: Note that you won’t need to write the customer’s name and address if a Customer Master File is available. A Customer Master File, or CMF, is a company’s record of all of their customers’ information. Purchase Journal You’ll also need to record all of your business expenses in your Purchase Journal. The format is similar to the Sales Journal and is as follows: Just like with your Sales Journal, you won’t need to include the supplier’s name or address if you have a Vendor Master File, which functions in the same way as the Customer Master File. You’ll soon be able to register your own Book of Accounts now that you know how it works. Be sure to check BIR’s requirements and instructions before proceeding with registration.  Are you in need of guidance regarding your book of accounts? Schedule a consultation with STLAF’s team of accountants today so that you can start recording your business transactions with ease.

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