Business Clearance | How to Get Business Clearance in the Philippines?
If you want to start a business in the Philippines, you will need a business clearance. This is a type of document that you can get from the local government and that helps you in your business. This document proves that you are following the local rules. To get this document first, you have to get a barangay clearance from the local area. After getting barangay clearance, you can apply for the mayor’s permit to get the document. Both types of documents are necessary to avoid any legal issues in business.
In this blog, we will discuss how to get business clearance, its types, and requirements.
Why Business Clearance is Required
The clearance for business is required for many reasons, some of which are given:
- Authorized business activity: It means that your company is following the local and national rules.
- Customer confidence: This document is required to win the customer’s trust and is used to build trust with high authorities.
- Stay safe from fines: This document can save you money by avoiding legal matters and any other legal issues.
- Access to business opportunities: This document can help you access business opportunities.
- Community approval: This document shows that the local community knows about your business, and they do not have any objections related to our business.
Types of Business Clearances
The types of clearance for business are as follows:
- Barangy Clearance: This clearance is proof that your business is following all the rules and regulations within the specific community.
- Mayor’s clearance: This clearance ensures that your business operations are following the rules and regulations of the city. All the businesses that are running in the city must have the Mayor’s clearance.
- Bureau of Internal Revenue Registration: This clearance is needed for tax purposes. It involves registration with the Bureau of Internal Revenue, getting a tax identification number, and receiving the approval to officially issue the receipts and invoices.
- Security and Exchange Commission recognition: This clearance confirms that your business has a legal identity and structure. It is needed for companies and partners to complete registration with the Security and Exchange Commission.
Requirements for Business Clearance
The following are the requirements that are needed to apply for the various types of business clearance:
Barangay Clearance:
The following are the requirements that are needed to apply for the Barangay clearance:
- Proof of business address
- Valid ID
- Application form
Mayor’s Permit
The following are the requirements that are needed to apply for the Mayor’s Permit:
- Barangay Clearance
- Proof of address, like utility bills and electric bills
- Business plan
- Valik ID
Bureau of Internal Revenue Registration
The following are the requirements that are needed to apply for the Bureau of Internal Revenue:
- Mayor’s permit
- Valid ID
- Proof of address
- Bureau of Internal Revenue Registration Form
SEC Registration
The following are the requirements that are needed to apply for the Security and Exchange Commission Registration:
- Company registration papers
- Address proof
- List of directors
- Official documents
Application Forms for Business Clearance
The application form can be downloaded from the official website of the relevant government agencies or obtained at Barangay Hall in person, the city hall, BIR, and SEC. To prevent any delays, read the information given on every form and then fill out the application form. The other thing to keep in mind, or to prevent any delay, is to fill out the correct information. The other thing to keep in mind, or to prevent any delay, is to fill out the correct information. For processes requiring a criminal record check, you may also need to apply for a national police clearance to ensure compliance with administrative requirements.
Business Clearance Fee
The clearance fee for all types of clearance for business is given:
Barangay Clearance
Normally, the fee for Barangay clearance is PHP 300 to PHP 1000. This fee may vary for the community or a type of business.
Mayor’s Permit
Usually, the fee for the Mayor’s permit is from PHP 500 to PHP 10000. However, it may vary according to the city, type of business, and its size.
Bureau of Internal Revenue Registration
Usually, it costs about PHP 500 to PHP 1000.
SEC Registration
Corporations or partnerships usually pay a fee of about PHP 1000 to PHP 5000.
The Application Process to Get a Business Permit
The application process for all types of business clearance is as follows:
Barangay Clearance
You can apply for Barangay clearance by following the simple steps:
- Prepare documents: Gather documents that are required to apply for the Barangay Clearance, like your proof of address, business name, and a valid ID.
- Visit the Barangay Hall: Visit the Barangay Hall, in which your business is located.
- Submit application: Fill out the application form with the correct information for the Barangay clearance and attach the required documents.
- Pay the fee: Pay the required fee. This fee may vary according to the Barangay.
- Receive clearance: After you submit your application, you can receive the Barangay clearance certificate within a day or two.
Mayor’s Permit
You can apply for the Mayor’s permit by following the simple steps:
- Prepare documents: Gather documents that are required to apply for the Mayor’s permit, like your proof of your business address, business name, and a valid ID.
- Visit the city: Go to the nearest business permit and licensing office in your area.
- Submit documents: Fill in the correct information in the business permit application and attach the required documents.
- Pay the fee: Pay the required fee, which may vary according to the area and business type.
- Inspections: your business location is viewed by some officers to check taht your business meets the local rules and regulations.
- Receive permit: once your application is approved, you will receive the Mayor’s permit
Bureau of Internal Revenue Registration
You can get the BIR clearance by following the simple steps:
- Prepare documents: Collect the documents that are required for the BIR clearance, like business address, Mayor’s permit, valid ID, and the BIR application form.
- Visit the BIR office: Go to the BIR regional office that is close to your business location.
- Submit documents: Submit the application with correct information and attach the required documents.
- Obtain TIN: You will receive the Tax Identification Number.
- Register for tax type: Sign up for the tax type that matches your business.
SEC Registration
You can get the SEC Registration by following the simple steps:
- Prepare documents: Gather documents that are required for the BIR clearance, like Mayor’s permit, Valid ID, Proof of address, BIR Registration Form
- Visit the Security and Exchange Commission: Visit the SEC office or check the SEC web portal.
- Submit documents: Fill in the correct information in the application and submit it with the required documents.
- Pay the fee: Pay the required fee. It may vary according to business size and corporation.
- Obtain certificate: Obtain a certificate of incorporation after review and approval of the application.
Business Clearance Processing Time, Validity, and Renewal
The processing time to get the clearance for business may vary according to the location and clearance type. However, you can expect to get the clearance after a few days to a few weeks. The validity for the business permit is for one year, from the date of issuance. Some permits and clearances may be renewed after one year. To prevent any delays, make sure to apply for the renewal before the date of expiration.
FAQs
Conclusion
Business clearance is the best option to run your business smoothly. It is a type of document which is the proof that proves you are running your business according to the local rules, and the community has no objection to your business. Gathering the required documents and following the simple steps that are mentioned above can help you apply for all types of clearance. The one important thing to keep in mind is to renew the clearance before its expiration.
