The Philippines is a country that’s constantly moving forward, thanks to a highly educated population and a vibrant, business-friendly environment that attracts investors from all over the world.
With that said, starting a business in the Philippines brings many advantages to the table, whether you’re a first-time entrepreneur or a seasoned business owner. In addition to the numerous offers and incentives provided to entrepreneurs, the Philippines also boasts a well-developed economic and business infrastructure, along with a highly-skilled workforce.
Those planning to start a business in the Philippines can choose to set up a variety of business entities, each with its own advantages and disadvantages. On this page, we’ll focus on one of those entities: the partnership company.
A partnership company is a type of business structure considered a separate legal entity, with two or more individuals responsible for managing and sharing both profits and losses of the company. Next to a corporation, a partnership company is one of the most preferred business entities in the Philippines.
Partnership owners have the option to choose a structure with either limited or unlimited liabilities. Establishing a larger partnership in the Philippines is also an option, provided owners register their interests with the Securities and Exchange Commission (SEC).
Setting up a partnership company involves a relatively easy and straightforward process
Start-up costs for partnership companies are more affordable compared to other business entities
Partnership companies are versatile, as its legal structure can be changed according to circumstances
Partnership company owners have equal right when it comes to managing the business, and can share in losses it incurs
Articles of Partnership (AP)
Name of the partnership and Name Verification Slip
Purpose of partnership
Name, birthdate, current address, and citizenship of all partners
Tax Identification Number of all partners
Capital contribution of partners
Principal office address
Contact numbers of all partners
Joint affidavit signed by two partners in order to change the company’s name (this is not required if already stated in the Articles of Partnership)
Bank deposit certificate
Data sheet registration
Depending on circumstances, additional requirements might be needed, such as:
FIA Form – 105 for partnerships that have a foreign national as one of the partners
Clearance or endorsement from other government agencies
The first step to registering a partnership company is to register its business name at the SEC. Upon registration, you will need to obtain a Certificate of Registration from the SEC, which will give you license to establish and operate a business.
All businesses in the Philippines need to secure a Barangay Clearance, which can be obtained in the local barangay office that serves your business’ location. The Barangay Clearance serves as proof that your business complies with all standards and regulations established by your local barangay.
All businesses who hire employees are required by law to register their business and its employees with the SSS. SSS registration ensures that employers are lawfully remitting their contribution to the agency in order to give their employees access to its benefits. Failure to register employees with the SSS is considered a violation of the Social Security Law.
After you’ve obtained a Certificate of Registration, Barangay Clearance, and SSS registration, you will then need to proceed to the local municipality serving your business’ location to register and secure a Mayor’s permit. The permit shows that your business complies with all standards and ordinances from the city, such as fire and safety, sanitary, and other clearances.
Head to the BIR to submit your Certificate of Mayor’s Permit, which is required for businesses to obtain a BIR Certificate with Registration. This will authorize you to print official receipts, secure a separate Tax Identification Number (TIN) for your business, and register books of accounts. Registration with the BIR typically costs 500 annually.
Obtaining all of the required documents and going through the registration process on your own can be a tedious and time-consuming task, especially if you’re new to the process. If you need help regarding company registration in the Philippines, get in touch with our team today to talk about your plans and goals. Call us at +1.806.553.6552 or send us a message here.