You may have a great business idea that you want to implement as soon as possible yet you don’t have any idea how to start and register a business. This article aims to give you some pointers on how to register and start a Sole Proprietor business.
What is a Sole Proprietor?
Sole Proprietor is a type of business that is owned and managed by a single individual or person.
It also includes self-employed or freelancers and practicing professionals with PRC license such as doctors, lawyers, engineers, lawyers, architects, real estate brokers, accountants, etc.
Benefits of a Sole Proprietor Business
- Easier to set up and register
- Requires minimal amount of capital
- Lower cost in registering for government permits and licenses
- Minimal regulations and monitoring requirements
- You can register and run your business on your own
- You can enjoy the profits on your own
Disadvantages of a Sole Proprietor Business
- Risk and liability is shouldered by the owner (you) alone
- The loss is solely suffered by the owner (you)
- You manage and operate the business on your own which sometimes leads to exhaustion
- Shareholders, such as creditors or government agencies, can run after your own personal assets since the business is you.
Where to Register a Sole Proprietor Business?
Here are the government agencies where you may be required to register your Sole Proprietor business depending on what type of business:
- Department of Trade and Industry
- Bureau of Internal Revenue
- Local Government Units where your business is located:
- Barangay
- Mayor’s Office
- If you have employees, you need to register to the following:
Basic Requirements and Procedure in Registering a Sole Proprietor Business
In this part of the article, we will guide you on how to register your business in many different government agencies.
1. Register a business name at Department of Trade and Industry (DTI)
As a business, we use a “Trade Name” as our brand that is easily remembered by our target customers. If you will use a “Trade Name” for your business, you may register it in the Department of Trade and Industry (DTI).
If you’re a self-employed, freelancer or professional who do not intend to use a “Trade Name”, you may skip this part.
To register in Department of Trade and Industry (DTI), follow these steps:
- Visit DTI’s Business Name Registration System here: https://bnrs.dti.gov.ph/registration
- Read the Terms and Conditions and click Accept
- Fill-in your personal information
- Choose the nature or industry of your business such as: Restaurant
- Come-up with a business name such as: Shodo Japanese Restaurant
- Search if business name is available or has passed the criteria
- Once proposed name is passed, fill-in other required information
- Pay registration fee
- Print DTI Certificate of Registration (COR)
After acquiring a DTI Certificate of Registration (COR), you may now proceed and register with Bureau of Internal Revenue (BIR)
2. Register your business with the Bureau of Internal Revenue (BIR)
All sole proprietor are required to register with the Bureau of Internal Revenue (BIR). And last June 2020, the BIR has released Revenue Memorandum Circular (RMC) No 57-2020 to simplify the process of business registration by removing Local Government Unit (LGU) permits and license in their list of requirements.
However, just a quick note for those who have existing Tax Identification Number (TIN), before proceeding with the steps mentioned below, you must first submit update and/or transfer of records to your current BIR Regional District Office (RDO) prior to submission of new business application.
For first time applicants, meaning without existing TIN, you may proceed with the steps in registering a business in BIR as follows:
- Fill-up the BIR Form 1901 – Application for Registration (for Sole Proprietor)
- Prepare the list of requirements as follows:
- Valid Government ID with Name/Address/Birthdate or PRC ID (if professional)
- Filled-up and paid BIR Form 0605 – Annual Registration Fee of P500.00
- Prepare the sample format of the receipts and/or invoices you will use for sales
- Prepare the books of accounts, such as journals and ledgers, you will use for record-keeping
- DTI Certificate of Registration, if you will use a “Trade Name”
- Once you have completed all the requirement, submit to the Regional District Office (RDO) where your business is located
- Register your book of accounts and receipts/invoices
- Claim your BIR Form 2303 – Certificate of Registration (COR)
3. Registration with Barangay
Before you can legally operate your business, you must secure business clearance/permit from the Local Government Unit (LGU) starting with the Barangay. While processing your registration in BIR, you may also start processing in the Barangay.
However, if you are a freelancer, self-employed or practicing professional, you may skip this part.
Here are the steps in registering with Barangay:
- Go to the barangay where your business is located to secure and fill-up application form
- Submit your completed application form together with the following:
- Certificate of Business Registration from DTI
- Two (2) valid government IDs
- Proof of Address such as Contract of Lease (if rented) or Certificate of Land Title (if owned)
- Pay the Barangay Clearance Fee
- Claim your Barangay Certificate of Business Registration
4. Register your business in the Mayor’s Office
After claiming the barangay clearance/permit, the next step is to secure business clearance/permit from the Mayor or Municipal Office.
If you are a freelancer, self-employed or practicing professional, you may skip below steps. Instead, secure and pay either Occupational Tax Receipt (OTR), if non PRC licensed self-employed/freelancer, or Professional Tax Receipt (PTR), if PRC licensed self-employed/freelancer.
Here are the steps in registering with the Mayor’s or Municipal’s Office
- Go to the municipal office where your business is located to secure and fill-up application form
- Submit your completed application form together with the following:
- Certificate of Business Registration from DTI
- Barangay Clearance Certificate
- Two (2) valid IDs
- Proof of Address such as Contract of Lease (if rented) or Certificate of Land Title (if owned)
- Pay the Mayor’s Permit Fee
- Claim you Mayor’s Business Permit and Licenses
- Process other permits, if needed, such as: Fire Permit, Sanitary Permit, Locational Clearance, etc.
After completing all the steps above, you can now focus in operating and growing your business.
Good luck.
Note: This article has been originally written in 2013 and updated 20 July 2021.
I’m planning to register my business under my name just to secure an ATP(Authority to Print) for BIR receipts purposes. My delima is, my business is a sole proprietorship consultancy. Meaning I don’t have people under me, or an office but only myself and my knowledge for the services to be offered. What should be the best step to take. Is it to go directly to DTI or directly to the BIR to acquire the ATP. Thank you very much.
If you have a trade name, go to DTI. If you have PRC ID, you can register directly to BIR.
Pde ko bang isama ang isang foreigner sa single/sole prop? o ako lang talga as may trade name as Guillermo C. Albutra? o possible po ba na gamitin lang ang name ko ng boss kung foreigner, cya po kasi ang may capital eh…ang nature po ng business namin is .. door to door shipment, cargoes from china,,. deliver to diff customers to domestics areas as long as metro manila.. anu po ba ang gagamitin kong name ng business ko as door to door shipment?? my name o company name?…magkanu po ba ang capital? magkanu babayaran sa dti pag paparehistro?? Maraming2x slamat po at God bless….-GCAlbutra. pls reply to my email add above..Thanks po !
Online businesses should register like a regular business. I just finished registering my online business. I don’t have an online shop or own website but I post my ads on http://www.mybenta.com. I went through the same registration process for sole proprietorship.If you are registering as a corporation, you should go to Securities and Exchange Commission (SEC)
There are 3 offices to go to: DTI, City Hall/Municipal Hall, and BIR.
1. DTI for the registration of your business name.
2. To become legit, you have to secure a mayor’s permit to operate (You may also want to check if your local government would require you to secure a provincial permit). Get a checklist from the Mayor’s office on the required documents. They might require you to submit a baranggay clearance and community tax certificate/cedula.
3. You will go to BIR to get a TIN. Or if you already have one, update or request for transfer of location. You will also ask for authority to print receipts and invoices from BIR. Production of receipts can only be done by BIR-accredited printing press.BIR penalizes failure to secure or issue receipts on before commencement of business. Before printing the receipts, you will have to attend a BIR seminar.
It’s always best to visit or call those offices first and request for a checklist or ask about their step-by-step process to avoid inconvenience.
Hello mam good day, i am a government worker particularly teaching in a state university, may i ask if i am allowed to established a consultancy business related to my profession as agricultural engineer
If my business is online, do I need to apply for Mayor’s permit and Barangay Clearance? I have no office and no employees, my business only resides in the cyberspace. I just want to register my business to DTI and BIR so that I can issue an Official Receipt to my clients.
Hi,
Good afternoon. May I ask if there will no problem if a company with one company name is issue the same invoice and receipt for 2 types of business, service business and trading business?
Thank you
I want to put my own business but as a start-up, will focus on selling on-line then if everything goes well, will rent a place for shop/office/storage. My Q is, what can be a good alternative for the requirement: Proof of Address such as Contract of Lease (if rented) or Certificate of Land Title (if owned), since this will be done at home? Thanks!
good day i am planning to put up a homebased baking business under sole proprietorship. ano ano po ba yung mga requirements na hihingin sakin? thank you.
What is the minimum and maximum capitalization for single proprietorship? can i use one (1) business name to get mayors permit in more than 2 places or municipalities?
is it the same procedure if i will register my online business?
I am just starting out as an interior designer. I’d like to establish my professional practice (with official receipts & all) but I’m confused with what the requirements really are. Same as del, I don’t have people under me nor an office. Is the procedure above what’s applicable to me? Thanks much.
My brother, sisters and I want to open a bakery in a newly opened mall. This is our first venture so we have limited knowledge. Having a monthly rental of P30K should we be in sole proprietorship or corporation? I heard that sole propietorships have very limited deductions.
My business is registered as sole proprietorship. We operate in Q.city however we are planning to put up another small office in another city, (RIZAL) do we need to get another brgy clearance and mayors permit under rizal? Thanks
How about a flower retailing business where I run it by myself, I don’t have a store, no employees, and my registered office is at my house, do i need to comply all those requirements listed above?
do i need to pay expensive permits and licenses at the barangay and mayor’s office? what if I only rented my house and i can’t secure those proof of address such as contract of lease and/or certificate of land title, you mean i can’t operate my business?
I’m planning to do Sole proprietorship to simplify everything, but i have a financial investor/partner. Please advice how to deal with it’s legality and accounting matters. Thank you
If the capital is below P500.00, does it require to have a business permit or license?
How can we get your services? I only run this as a sole proprietor but i will be needing OR’s and Invoices for my services. Can you please send this link to my email because I am just using my phone now? And can you send me your rates if I will outsource the business registration to you. Please reply asap.
Thanks and God bless!
Mariel
What are Barangay and Mayor requirements for home based, delivery only or online businesses?
My friend is looking to become reseller of goods by purchasing direct from wholesaler then delivering direct to customers so has no trading premises with stock on hand.
Hi,
I’m thinking of registering my freelance business as a sole proprietor. Problem is I’m renting but I don’t have a Contract of Lease. My sort-of SIL (I’m not married to his brother but we live in together)was the original renter. She no longer lives in the apartment but she’s still the one responsible for it, but I’m the one paying. So my question is can I still get barangay and mayor permits even if I don’t have a Contract of Lease?
Hi,
I would like to put up a small business in Cagayan de Oro but I’m currently living in Taguig city. I plan to register the business using the address of my uncle in Cagayan de Oro. Will there be a problem with this kind of setup? Many thanks.
Are handwritten receipts legal in the Philippines? In an exchange of services, can that handwritten receipt given to a client after sevices rendered be used for a claim on taxes?
Sir/maam; may itatayo po akong trading and construction services, wala po ba akong magiging problema sa registration? Sole proprietorship lang po ito. Nakapag register na ako sa dti pero baka raw maquestion bg mayors office yung trading and construction. — gabs
I am planning to register my business as a sole proprietorship just to have a Official Receipt purposes. My business is like i am an agent or a middleman. Example of my business is that I have a customer that needs various furnitures and i have these furnitures manufacture to a certain factory. Once furniture is done will deliver it to my customer and i will issue the invoice as a billing. My customers need an official receipt from me. What should be the best step to do? Is to go to DTI and then after to the BIR? Or to DTI, to LGU and then BIR?
Business is not yet operating, implanning to have a small tapsilogan in front of our house. But i already registered to dti the name that i want for my business. Hindi ko pa plano simulan soon maybe 2 to3 yrs pa. Kailangan ko ba i cancel ung sa dti. Or ok lang un para ung business name na gusto ko is hindi makuha ng iba…? Thank you
I am a Filipino citizen but currently living in USA. I am starting a business of online gaming and internet shop in the Philippines. I just have no idea of how to register my business as I am the sole owner, given that I am here in USA. I need some advise. Please help.
hi,
just want to ask gusto ko maging sole proprietor ng isang services, yung mga kakilala ko magaling sa construction may manpower sila as a team,yung kapatid ko freelancer ng photos and videos coverage with his fellow friends din, then yung iba kong kaibigan magaling sa flower decoration like wedding decor flower, beauty artist, ung iba naman incline sa band ang singing … so my question, is it possible ba na maging isang company kami and ako ang proprietor?
thanks
I am full time employee. I want to set up sole proprietorship. Do I keep same tin number?
mam open sana ko business consruction services…. mag sub-con….. ang nakuha ko na cert sa b.i.r. percentage tax dapat po b ung vat ang nsa cert thnx
Madam,
Please advice if you can assist with the company setup for NON STOCK for 100% Foreign Owenership.do we require 2 person to be onboard or sole proprietor is acceptable.Option 2 is with DTI for SOLE propritor.
What will the chargers be for SEC company formation and Annual Accounting Services and Submittion of Accounts to Goverment offfice
I am planning to open a small business there in the Philippines to be manage by my daughter, does she can register my business under my name even I am here in abroad?
I’m planning to to put up a sari sari store business, should I go to these steps?
For the proof of address, What if the address to where the business will be located is a space that is lended to us by a friend for free. What document are we to present to LGU office? Tnx
Good Morning. Am planning to start a small construction business accredited with PCAB. Will a Sole Proprietorship registered with DTI be accepted. Many thanks,
When applying for a Mayor’s permit, will I be limited in my business operation if say I engage in a business not stated in my business permit? For example, my business permit says, KIND OF BUSINESS: importation of industrial machineries, but then I would engage in selling medical supplies, would this be allowed?
Can I register a rental business with the DTI under my name, even If the property that I’ll be renting out is not registered under my name (but under my children’s name)? My children has already executed a special power of attorney so I can administer the above property.
Hi, I am a freelance graphics artist working at Odesk.
And would like to register my self as a taxpayer and as a sole proprietor. For freelancers who earn from payments abroad, it sole proprietorship the best choice?
I also just work at home, so my office would be part of my home, is it still valid?
I am also planning to hire more and more people as my business grow. Is being registered as sole proprietor still ok?
THanks a lot this was really helpful,
Raf
thanks for the info. God bless
we avail a franchise food cart,and our plan is to register our business as partnership,we don’t have idea how to register it because we are a franchisee,what will we do?is there any part of franchise company that we need to consider in our registration?
thank you so much for your reply.
i’m selling gadgets online using social media. What do I have to do to secure an ATP so that I can issue OR’s to my customers? And since one of the requirement is Proof of address then should I put my apartment address and still secure a contract of lease from my landlord?
Thank You
Good day. I am a newly appointed Business Manager of a Direct Selling Company (Tupperware Brands) and we are required to issue a BIR approved receipt to receive my commission/income. I already have a DTI and I need an ATP (Authority to Print) for BIR receipts purposes. What do I need to do? I badly need help as I cannot get what I worked for because of this.
I have a PRC ID, being a Civil Engineer. I wish to register my sole proprietor business under my name in order to be a Consultant or Contractor of engineering projects. How do I go about formalising/registering my sole proprietorship? Do I need to register at Dept of Trade & Industry, or would it suffice for me to register at the BIR?
If I register in BIR Office in Mandaluyong, (being a resident of Mandaluyong), will my registration in Mandaluyong allow me to practice my
business anywhere in the Philippines? Please give me your expert advice. THANK YOU!
hi i just want to ask how much will be the cost of registering a business if i process it and if you process it. let me know. i want to start a small business in apartmentt renting, poultry and hog raising
Thank you for asking. Kindly fill-up this form https://mpm.ph//accounting-service-quotation/ so we can understand the business better. After you fill up the information, we will send our proposal to your email including our service fee and estimated government fees.
Thank you.
Hello ma’am/sir,
I have to put up an MLM Business. the products is digital like ebooks and other digital services. all transactions must be purely online. I am planning to register a proprietorship business for it, but i don’t want to have an office inasmuch as i do not have employees or it is not practical as of this time to have an office since, i can do this business at home.
What should i do?
Very helpful info. Thanks.
Paano po kung ako ay employee pero magtatayo po ng business in my name.Hindi po ba ako magkakaroon ng conflict sa employer ko? lalo po sa sa benefits etc. nde po ba madoble ang aking bayad tulad ng sss, pag ibig at phil health dahil dadaan din po sa kanila ang aking mga documents.salamat po
Hi Ma’am! Tanong ko lang po kung ganu katagal yung bawat step pong yan?
How about registering an online business? What would be the main difference for it? I am currently selling online and posting my ads in free classified ads sites like olx and mybenta at the moment, but I would to be able to send out sales quotes to offices, so I would be needing to have my small online business registered. I am trying to setup a online business at home, which I would like to have registered in my home Will I be needing to get the approval of the home owner’s association, even if its just an online business and not an actual shop? Currently, I just post to free classified ad sites like olx.ph ayosdito.com and mybenta.com, but will would like to be registered to have the necessary paperwork.
My husband is a dentist but he passed away. We have a dental clinic under his name- DTI & BIR. I want to continue the operation of our clinic but I am not a dentist I will just hire a dentist. Is it possible to use the same business name (DTI) under my name & the BIR under my TIN?
Hi, i want to ask po if during dti registration, you selected Barangay as your scope then suddenly you expanded to another Brgy or City or Regional, is it possible that the registration will just be extended and pay a fee or you really have to register again another business name? Pls advise. Thanks.
I started my internet shop a year ago…i had a business permit and DTI…but I failed to register with the BIR…because some people who have the same business as mine, told me no need to need…now, i had fears about my tax or maybe i will be penalized for failure to do so. What will u advice me about this? The truth is, my business is not profitable until now…almost all my savings were used just to survive my business…maybe that is one of the reason that i’m “kampante” for not paying taxes…but i renew by business permit already. Some advised me to register a similar but not the same trade name of my business…so , iwill not be penalized for not registering my business. Can u help me? thanks in advance.
Hi Ms. Yanuaria,
Just wanna ask what if the headquarters of the business is located in the U.S. but then we have office here in the Philippines. So how is the taxation? Is there any tax that the company needs to pay to the BIR?
Hi. I registered our carwash business on DTI last Feb. 9, 2015. Is it true that I have to pay for penalty if i haven’t register our business on BIR within 1 month of the DTI registration? Thank you. Regards,
Hi, thanks for the info. I just want to clarify one thing: In all the steps, one requirement is the lease/land title. Does it mean I need to pay the rent first (for example a land space) to have a copy of the contract to be able to register my business? In short, I cannot just go to DTI and register my name if I do not have a lease contract beforehand?
Thank you!
hi,
i am planning to have my own business as a freelance electrical service contractor. I would like to know how long is the processing of the business registration and how much would it cost me if i will process it myself and how much if you will do it for me.
thanks and best regards,
lemuel james tomas
Hello.
Gusto ko po kasi magretail business (online), pero walang specific place, I am planning to put up a facebook page lang or website.
Pero, gusto ko sanang magkaroon talaga ng official receipt, para maging legal talaga yung iniisip kong business (and syempre to pay.
Kaya lang, nag aalala ako, magkano po kaya ang magagasto ko? (baka kasi mas malaki ang gasto kesa sa capital ko 🙁
Thanks po.
What if a sole proprietor is already DTI, Barangay, Mayor’s office registered and failed to register on BIR and the business did not materialize? What are the advantages and disadvantages of this act.
Thanks 🙂
Hi! I Have a question regarding Doing Business As (DBA) I called DTI regarding the registration of DBA. But it seems they don’t have an idea. May I know where/which gov. agency i could inquire about this? Thank you!
Hi I would like to ask the possible way to get business registered. Pano po kung normally i coconsign yun paintings for business sa galleries or hanap lang po ng co to showcase yun designs and do workshops in the future. Require pa po ba ng office yun? And magkano po ba tax for that kind of business. Pls reply on my email address.
Pano ko malalaman kung sino may ari ng lot? To know ig it is rented or for sale?
Hi Madam! I am a CPA and am planning to put up my own service business that doesn’t provide accounting services. I would be offering speaking engagements, seminars and team building activities. Do I still have to register with DTI or can I go directly to BIR? I want to have a different name for that business. Thank you for your help. =)
i want to put up my own company.. but im still a sales rep in my employer.. is it possible to put my own? and is there any conflict in terms of tax decleration in BIR ?
i want to put up business such as trading of food and non food items.i will purchase my merchandise at divisoria or friends who makes products that i can offer to my connections client.what type of business is fit for me to apply .im expecting to sell office supplies.but i want to sell also seafoods meats and poultry.
I currently own a small school supplies store and would like to register my business and secure a Mayor’s Permit. I am renting the space only I could not secure a Contract of Lease as it is an informal agreement and the lessor does not provide one nor a receipt. Her reason being is that it is just one space she is renting out and it is her only source of income. I’d like to register it with my home address instead but my house is still being mortgage and it is not in my name hence I do not have a Certificate of Land Title. How should I go about this? Thank you and looking forward to your reply.
hi, i would like to inquire on how much is to be my capital in establishing a truck importation company and how much it cost for registering.
hi. how can i register my online shop business? same reqs lang ba kelngan?..
Na tax mapped po ako ng BIR 2nd opportunity notice nakalagay sa sulat na dumating saakin galing sa BIR ano po kailangan kong gawin. Kakasimula ko pa lang mag operate ng branch ko aminado po ako na wala pa akong mga permit pero nilalakad ko na po nung nagpadala sila ng sulat sakn. Salamat po
Greetings ma’am Yanuaria,
I’m an Industrial Design graduating student next year by march, and planning to build my own business selling custom-made paracord products in the near future at Lynville Subdivision, Alaminos, Laguna.
whom sould I ask for the RDO location in Laguna (sorry I can’t find it on google map) and registration fee for BIR form 0605?
Hi Mozi, thanks for your comment. As early as now, i’d like to congratulate you on your new business. We suggest you go to the nearest BIR in your business location to confirm your RDO. Thank you
Hi,
i would like to register a business. The business is in Information Technology field, we outsource software development services to foreign clients.. it is very small now, as I am starting up.. my question is how should I handle the bir receipts,etc.. should I consider hiring an accountant?? thanks!
Hi Algene, thank you for your question, you may choose between hiring or outsource your accounting needs. This article may be helpful for you: Importance of Accountants: Why You Should Hire One for Your Business? Please also read more on our outsourced accounting services. Thank you