Are you planning to start a new business soon? Your company license application is an essential task for which you should set up time. This certificate proves that your firm, whether it’s an online business, physical store, a courier service, an internet shop, or any other type of business, can legally function in the city or municipality where it’s located.
Know how to correctly apply for a business license so you may start your business without hassle. For first-time business owners in the Philippines, here’s a quick guide.
What is a Business Permit, and How Do I Get One?
A business permit is a document that verifies the legitimacy of your company. This document certifies that your company is licensed to function in the city or municipality where it is registered.
The local government unit (LGU) processed it with jurisdiction over the location of the business; this formal document is sometimes known as the mayor’s permit.
Business permits guarantee that firms pay taxes and follow municipal safety, security, health, and sanitation standards. This document also authorizes an individual or group to any LGU-provided assistance to local enterprises.
If you operate a business without this permit, you may face fines and imprisonment. In the worst-case scenario, the LGU may shut down the enterprise until a business permit is obtained.
Here are considerations to take before applying for a Business Permit:
1. Fill out an application as soon as possible.
As a new entrepreneur, you have a lot on your plate as you get ready to launch your company. Regardless, it’s critical to prioritize your business permit application.
Why? First and foremost, it is mandated by law. Before starting a business in the Philippines, sole proprietors, partnerships, corporations, cooperatives, foundations, and associations must obtain a business license from their respective local government.
Second, a business permit is required for business loan applications, government financial aid programs, BIR registration, and other relevant transactions. It may also be necessary when applying to become a brand’s authorized reseller/distributor or an online vendor on e-commerce marketplaces.
As a result, you must first obtain this permit to establish your new business successfully.
2. Other Documents Should Be Secured First
It is a must to register your business with the appropriate government agency and obtain all necessary permissions and permits before submitting your business permit application.
Processing and obtaining business permits takes time and effort. If you don’t have these documents on hand yet, make sure you get them.
Requirements for a Business Permit
Every LGU has its unique set of documentation that must be obtained to apply for a permit. However, these are the most common requirements to bring in the following order:
Business Permit Requirement
- Applicable business registration document:
- Certificate of Business Name Registration (for single proprietors)
- Articles of Partnership (for partnerships)
- Articles of Incorporation (for corporations)
- Certificate of Registration (for cooperatives/foundations/associations)
- Barangay Business Clearance
- Contract of Lease (if renting a commercial space)
- Transfer Certificate of Title / Tax Declaration (if the property is owned)
- Sketch and photos of the location
- Locational Clearance / Zoning Clearance
- Occupancy Permit
- Public Liability Insurance
- Authorization letter/Special Power of Attorney and valid ID (if filed through a representative)
- Proof of business registration
- Proof of business location
- Proof of business location and existence
- Proof of compliance with the city’s/municipality’s Comprehensive Land Use Plan and Zoning Ordinance
- Proof that the structure where the business will operate has passed safety and health standards
- Protection against legal liabilities as a result of bodily injury/property damage to third parties in connection to the insured’s business operation
- Proof that the person is authorized to transact on behalf of the business owner
Where to Get It
- For single proprietors – Department of Trade and Industry (DTI)
Partnerships and corporations – Securities and Exchange Commission (SEC)
Cooperatives – Cooperative Development Authority (CDA)
Foundations and associations – The regulating government agency
- Barangay hall with jurisdiction over the business location
- Owner or building administrator of the leased property (if renting)
- City Planning and Development Office of the city/municipal hall
- Owner or building administrator of the leased property (if renting) or City Engineering Office of the city/municipal hall (if owned)
- Any Insurance Commission-accredited insurance company
- Business Owner
For business permit applications, your LGU may impose additional regulations, taxes, and fees. Contact your mayor’s office or go to your LGU’s website to find out what else you need to get and how much it costs.
3. In most cases, the application is completed in person.
Perhaps you’re thinking of getting a business license online might save you time. However, most LGUs now only accept walk-in applications.
This means you must submit the criteria to the city or municipal hall where your business is located, either personally or through your authorized representative.
However, if you want to start a business in Valenzuela City, you can use the city’s integrated online permission system, #PaspasPermit. You’ll have a provisional business permit within seconds of payment confirmation. Within three to five working days, you will receive the actual document.
In the Philippines, how do you apply for a business permit?
New application procedures differ by LGU. Here are the general stages to remember when applying for a business permit to give you an idea of what to expect.
Visit the Business Permit and Licensing Office, located within the city/municipal hall jurisdiction over your business address.
Secure the application form and complete it. The form can be filled out on the spot or downloaded in advance from the LGU’s website.
Submit the completed application form along with any additional needed. The personnel will assess your documents. Your application will also be subjected to a tax and charge evaluation.
To the cashier, pay the imposed tax and fees (once approved). Get a copy of your official receipt.
Claim your company license. The document may come with a registration plate/sticker or another certificate. Make sure to display them in your store or office prominently.
Remember! The extensive list of prerequisites on a business permit application may make it appear onerous. Still, the actual process is much easier than you may think.
It’s important to remember that you must renew your business permit on an annual basis. To prevent penalties and suspension of your business license, make sure to continue your permission between January 2 and January 20 of each year.