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Types Of business Enterprises An Investor

Organized Under Philippine Laws

Sole Proprietorship

Sole Proprietorship is a business structure owned by an individual who has hill control authority of its own and owns all the assets, personally owes and answers all liabilities or suffers all losses but enjoys all the profits to the exclusion of others.

A Sole Proprietorship must apply for a Business Name and be registered with the Department of Trade and Industry - National Capital Region (DTI-NCR).

In the provinces, application may be filed with the extension offices of the DTI.

Partnership

Under the Civil Code of the Philippines, a partnership is treated as juridical person, having a separate legal personality from that of its members. Partnerships may either be general partnerships, where the partners have unlimited liability for the debts and obligation of the partnership, or limited partnerships, where one or more general partners have unlimited liability and the limited partners have liability only up to the amount of theft capital contributions. It consists of two (2) or more partners.

A partnership with more than three thousand pesos (P3,000.00) capital must register with Securities and Exchange Commission (SEC).

Corporation

Corporations are juridical persons established under the Corporation Code and regulated by the SEC with a personality separate and distinct from that of its stockholders. The liability of the shareholders of a corporation is limited to the amount of their share capital.

It consists of at least five (5) to fifteen (15) incorporators each of whom must hold at least one share and must be registered with the SEC. Minimum paid up capital: five thousand pesos (P5,000.00).

A corporation can either be stock or non-stock company regardless of nationality. Such company, if 60% Filipino- 40% foreign-owned, is considered a Filipino corporation; If more than 40% foreign-owned, it is considered a domestic foreign-owned corporation.

Stock Corporation

This is a corporation with capital stock divided into shares and authorized to distribute to the holders of such shares dividends or allotments of the surplus profits on the basis of the shares held.

Non-stock Corporation

It is a corporation organized principally for public purposes such as charitable, educational, cultural or similar purposes and does not issue shares of stock to its members.

Branch Office

A Branch Office is a foreign corporation organized and existing under foreign laws that carries out business activities of the head office and derives income from the host country. It is required to put up a minimum paid up capital of US$200,000.00, which can be reduced to US$100,000.000 if (a) activity involves advanced technology, (b) company employs at least 50 direct employees. Registration with the SEC is mandatory.

Representative Office

A Representative Office is foreign corporation organized and existing under foreign laws. It does not derive income from the host country and is fully subsidized by its head office, It deals directly with clients of the parent company as it undertakes such activities as information dissemination, acts as a communication center and promote company products, as well as quality control of products for export. It is required to have a minimum inward remittance in the amount of US$30,000.00 annually to cover its operating expenses and must be registered with SEC.

Under RA 8756, any multinational company may establish an RHQ or ROHQ as long as they are existing under laws other than the Philippines, with branches, affiliates and subsidiaries in the Asia Pacific Region and other foreign markets.

Source: Department of Trade and Industry Philippines

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