What is a Sole Proprietorship?

Sole proprietorships are the most common and simple form of business organization. They are
formed by persons who own all or most of the business property and assets. They are 100%
responsible for all of the control, liabilities and management of a business. A sole proprietorship, as
its name states, has only one owner. The sole proprietorship is merely an extension of its owner: a
sole proprietor owns his own business, and no one else owns any part of it.

How is sole proprietorship formed?

Since the law treats the owner and the business as the same, the sole proprietor only needs to
register his or her name with the Department of Trade and Industry (DTI) and secure local licenses
and permits to commence business operations.

General information needed to apply for a sole proprietorship.

A. Business Details

1. Location

2. Tax Identification Number (TIN)

B. Owner’s Details

– Name

– Date of Birth. Owner must be of legal age (at least eighteen [18] years old).

-Citizenship

C. Owner’s Address

-City/House/Building/Zip Code

Here’s a step-by-step process for registering a sole proprietorship:

1. Register a business name with DTI to acquire a DTI Certificate of Registration;

2. Register with the Barangay Office where the business is going to be located to acquire a Barangay
Certificate of Business Registration;
3. Register with the Mayor’s Office to acquire a Mayor’s Permit; and

4. Register with the Bureau of Internal Revenue (BIR) to acquire a Certificate of Registration.

https://corporations.utah.gov/business-entities/considerations-in-forming-a-sole-proprietorship/
#:~:text=Sole%20proprietorships%20are%20the%20most,and%20management%20of%20a
%20business.

https://philippinesbusinessregistration.com/company-registration/sole-proprietorship/

What Is a Corporation?

A corporation is sometimes referred to as a ‘legal person’. It is a type of business or legal entity that
is separate and distinct from its owners. It is owned by its shareholders. However, the shareholders
don’t have any control over the day-to-day operations of the business directly. Instead, the
shareholders are responsible for electing directors of the corporation. Under the law, corporations
possess many of the same rights and responsibilities as individuals. They can enter contracts, loan
and borrow money, sue and be sued, hire employees, own assets, and pay taxes.

How Is a Corporation Formed?

A corporation is created when it is incorporated by a group of shareholders who share ownership of

the corporation, represented by their holding of stock shares, and pursue a common goal.

To form a corporation, According to Kelly DuFord Williams, founder and managing partner of Slate
Law Group, he outlined six general steps a small business must take to become a corporation.
However, every state has specific guidelines, so your process may vary.

1. Hire a transactional attorney.

- invaluable in managing the formation process and avoiding problems.

2. Appoint a registered agent and file the articles of incorporation.

- Every corporation must have a registered agent in the state where it files the articles of
incorporation.

4. Create the corporate bylaws and appoint directors.

- As they delineate the rights and responsibilities of your business’s shareholders, directors and
officers, eliminating confusion and maintaining corporate formalities.
6. Issue stock

- to have a ownership interest

8. File any other necessary documents with your local secretary of state.

9. File any necessary IRS forms.

- Must apply for an employer identification number (EIN). This is like a Social Security number for the
corporation.

Steps on How to Register a Corporation

1. Reserve and register business name in SEC (Security and Exchange Commission)

2. Acquire Barangay Clearance

3. Acquire Business Permit from Mayor’s Office

4. Register with BIR (Bureau of Internal Revenue)

https://grit.ph/register-corporation/

https://www.investopedia.com/terms/c/corporation.asp