Legal Checklist for Starting a Business in the Philippines: What Every Entrepreneur Must Know

Starting a business in the Philippines is both exciting and challenging. Beyond crafting your product or service, one of the most crucial steps is ensuring your business is legally compliant. Whether you're setting up a physical shop, an online store, or a consultancy, you need to meet the government’s regulatory requirements.

This article provides a step-by-step legal checklist to help you start your business right—legally and confidently.

1. Choose the Right Business Structure

Your first legal decision is choosing a suitable structure:

• Sole Proprietorship – Owned by one person; easiest to set up but has unlimited liability

• Partnership – Owned by two or more individuals

• Corporation – A separate legal entity that limits liability and offers better scalability

Tip: Most small businesses begin as sole proprietorships, while growth-oriented startups consider incorporation for better legal protection and access to investors.

2. Register Your Business Name

Where to register:

• Sole Proprietorship: Register with the Department of Trade and Industry (DTI) at bnrs.dti.gov.ph

• Partnership/Corporation: Register with the Securities and Exchange Commission (SEC) via sec.gov.ph

Make sure your chosen name is unique and not similar to any registered trademark or corporate name to avoid legal issues.

3. Secure Barangay Clearance and Mayor’s Permit

Once your business is registered with DTI or SEC:

• Apply for a Barangay Clearance from your local barangay hall

• Proceed to your city/municipal hall to get a Mayor’s Permit (Business Permit)

Requirements often include:

• DTI/SEC Certificate

• Lease contract or proof of business address

• Valid government ID

4. Register with the Bureau of Internal Revenue (BIR)

All businesses are legally required to register with the BIR to:

• Obtain a Certificate of Registration (COR) or BIR Form 2303

• Register books of accounts

• Apply for an Authority to Print (ATP) receipts/invoices

• Pay the ₱500 annual registration fee

Registration must be done with the Revenue District Office (RDO) where your business is located.

5. Register with Other Relevant Agencies (as needed)

Depending on your industry, additional registrations may be required:

• PhilHealth – for employee healthcare contributions

• SSS (Social Security System) – for social security contributions

• Pag-IBIG – for employee housing fund

• FDA, DOE, DOST, or DOT – for regulated industries (food, cosmetics, energy, travel, etc.)

6. Comply with Tax Obligations

After registration, make sure to:

• Issue BIR-authorized receipts for every transaction

• File monthly, quarterly, and annual tax returns

• Maintain organized books of accounts

Non-compliance can lead to penalties, surcharges, and business closure under BIR’s “Oplan Kandado.”

7. Secure Business Insurance (Optional but Recommended)

Though not required, getting insurance (such as property, liability, or cyber insurance) can protect your business from unforeseen legal and financial risks.

📌 Summary Checklist

Legal Requirement	Where to Register
Business Name (DTI/SEC)	DTI or SEC
Barangay Clearance	Barangay Hall
Mayor’s Permit	City/Municipal Hall
BIR Registration	BIR RDO
Employer Obligations (SSS, PhilHealth, Pag-IBIG)	Respective agencies
Specialized Licenses	Depends on industry (FDA, DOT, etc.)

Starting a business is more than just an idea—it’s a legal commitment. Complying with these requirements ensures that your business runs smoothly, avoids penalties, and gains the trust of customers, partners, and investors.

At GC Law, we help entrepreneurs like you navigate the legal landscape of business formation with ease and integrity.

Stay tuned to GC Law’s The Law Nook for more legal insights that matter to your business.