There are many benefits to registering your business, from gaining an advantage in the competition to ensuring legal protection and reducing tax liabilities.
However, there is still some confusion about registering a business name and obtaining a business permit. A popular misconception is that registering a business name equates to getting a business or mayor’s permit. To dispel any doubt, we’ll provide you with clarity.
Difference Between Business Name Registration and Business Permit Registration
| Business Name Registration | Business Permit Registration |
Definition | A Business Name (BN) is any name that you use in connection with your business that is different from your true name. According to the DTI, a sole proprietor’s business name must include two components. First is the dominant name, which is the primary portion of the name and typically consists of a word, phrase, or a combination of letters and numbers. The second is the descriptor for the business name, which describes the business’ nature. For instance, in the business name “Gourmet Squad Catering Services,” the dominant portion is “Gourmet Squad.” Subsequently , the descriptor is “Catering Services.” In the case of a corporation, the business name will typically end in “Corp.” or “Inc.” When registering a business, you may use either of these terms in the business name; however, they cannot be used synonymously once an institution is registered as a Corp. or an Inc. An example for these is Cateringtastic, Inc., and Cook Cantina Corp. | A business permit, also known as mayor’s permit, is an important legal document that give a company the right to legally operate and conduct business in the area where it is registered. |
Form of Business Ownership | Only Sole Proprietors can apply for a DTI business name registration. For a One-Person Corporation and/or Domestic Corporation, they should reserve and register their business name to Securities and Exchange Commission (SEC). | In the Philippines, all businesses, regardless of ownership structure, are required to obtain a business permit or mayor’s permit from the Local Government Unit (LGU). This is necessary because you will be establishing a business within the jurisdiction of the local government unit. |
Purpose | A Business Name Registration simply establishes the business’ legal identity and grants the business the right to use its name. | You must have a Business Permit/Mayor’s Permit in order to run your business legally. |
Validity Period | The Business Name registration is valid for a period of five (5) years from the date of registration. | Each year, business permits are renewed. Typically, the renewal period begins in January of each calendar year. |
List of Requirements | For DTI Business Name Registration: All applicants (except for those filing their application online) must download, print, and fill out two copies of the Business Name Registration Form and present any of the following valid IDs: * Passport * Driver’s license * UMID PRC ID * NBI Clearance * Police Clearance (in ID form) * Postal ID * Voter’s ID * OWWA ID * Seaman’s Book * IBP ID * Senior citizen ID * PWD ID * Government office ID * Validated state college/university ID For SEC Business Name Registration: * Check if your desired business name is available via SEC online website or at SEC Office in Mandaluyong * If available, register/reserve your business name via SEC online website or at SEC Name Verification Unit – SEC Office in Mandaluyong * Prepare, sign and notarize the following: > Articles of Incorporation; > By Laws; > Treasurer’s Affidavit; and > Joint affidavit of two incorporators * Submit notarized documents to SEC Office in Mandaluyong City * Claim your SEC Certificate of Registration | To Get a Business Permit or Mayor’s Permit: *Certificate of Business Name Registration from Department of Trade and Industry (Sole Proprietorships); Articles of Partnership (Partnerships) or Articles for Incorporation (Corporations) from Securities and Exchange Commission; Certificate of Registration (Cooperatives) from the Cooperative Development Authority * Barangay Business Clearance * Authorization letter of owner with ID * Contract of lease (If leased) or Certificate of Title/Tax Declaration (If owned) * Sketch of the business location * Occupancy permit * Community Tax Certificate (CTC or Cedula) * Public Liability Insurance (for Restaurants, Cinemas, Malls, etc.) * Locational/Zoning Clearance Fire Permit Sanitary Permit |
References:
Zoleta, V. (2021, June 12). DTI Registration and Requirements Guide for Business Owners. Moneymax. https://www.moneymax.ph/government-services/articles/dti-business-registration
How to Get a Business Permit in the Philippines | Security Bank Philippines. (2021, June 22). Security Bank Philippines. https://www.securitybank.com/blog/how-to-get-a-business-permit-in-the-philippines/#:~:text=All%20businesses%20are%20required%20to,recognized%20by%20the%20local%20government.
How to Register a Corporation in the Philippines? (2013, May 21). MPM Consulting Services Inc. https://mpm.ph/how-to-register-a-corporation/