| Here is a brief overview of various types of business structures and entities in Philippines. A business entity is a group of people organized for some profitable or charitable purpose. Business entities include organizations such as corporations, partnerships, charities, trusts, and other forms of organization. Business entities, just like individual persons, are subject to taxation and must file a tax return. In Philippines the most common types of businesses are sole proprietorships, partnerships and corporation. Sole Proprietorship Sole Proprietorship is a business structure owned by an individual who has full control/authority of its business and owns all the assets, personally owes answers to 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 (DTI) - National Capital Region (NCR). In the provinces, application may be filed with the DTI regional/provincial offices. 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 their capital contributions. It consists of two or more partners. A partnership with more than Peso 3,000 capital must register with the Securities and Exchange Commission (SEC). Corporation Corporation is composed of 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 to 15 incorporators, each of whom must hold at least one share and must be registered with the SEC. Minimum paid up capital is Peso 5,000. 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 Stock Corporation 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 Non Stock Corporation 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.
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FAQs
Local and foreign investors can conduct business in the Philippines by registering any of the following business entities: sole proprietorship, partnership, corporation or cooperative.
What are the different types of entities in the Philippines? ›
Local and foreign investors can conduct business in the Philippines by registering any of the following business entities: sole proprietorship, partnership, corporation or cooperative.
What are the three types of business organizations in the Philippines? ›
Learn the Kinds of Business Structures in the Philippines
- Sole Proprietorship. If it's full control or authority you're after, this is the business structure for you. ...
- Partnership. Should you decide to start a business with other individuals, this becomes a Partnership. ...
- Corporation.
A sole proprietorship is the most common type of structure since it's also the simplest to set up.
What are the business forms in the Philippines? ›
In Philippines the most common types of businesses are sole proprietorships, partnerships and corporation.
What are the four basic types of business entities? ›
When beginning a business, you must decide what form of business entity to establish. Your form of business determines which income tax return form you have to file. The most common forms of business are the sole proprietorship, partnership, corporation, and S corporation.
What are business entity types? ›
Starting a Business – Entity Types
- Corporation.
- Limited Liability Company.
- Limited Partnership.
- General Partnership.
- Limited Liability Partnership.
- Sole Proprietorship.
- Frequently Asked Questions.
There is no legal distinction between the business and the owner, meaning that any financial or legal obligations are the sole responsibility of the owner. A corporation, on the other hand, separates the owner from the business, and defines the business as its own legal entity.
What business in the Philippines is sole proprietorship? ›
A sole proprietorship gives complete control to an individual owner. It is one of the simplest structures for business expansion in the Philippines. Freelancers and self-employed professionals are both included under sole proprietorship.
What is the simplest form of business organization in the Philippines? ›
A Sole Proprietorship is the most basic type of business organization in the Philippines. It can be established by just one person, referred to as a sole proprietor.
Corp stands for corporation while Inc stands for incorporated. Incorporation is the process of legally forming a business entity, such as a Limited Liability Company (LLC) or corporation.
What is an example of a corporation sole in the Philippines? ›
The Roman Catholic Archbishop of Manila is a corporation sole so if Cardinal Sin dies the new archbishop will simply submit his appointment and he need not incorporate again because the corporation is different from the occupant of the position. The Iglesia ni Kristo is incorporated as a corporation sole.
What are the 5 entities of a business? ›
Types of Business Entities. U.S. state governments recognize many different legal entity types, but most small businesses incorporate under one of five entity types: sole proprietorship, partnership, C corporation, S corporation, or limited liability company (LLC).
What are different entities? ›
Generally, to actually establish your business's entity structure, you'll register in the state where your business is located. Most business owners will choose from the six most common options: sole proprietorship, general partnership, limited partnership, LLC, C corporation or S corporation.
What are the types of entity examples? ›
An entity can be of two types : Tangible Entity : Entities that exist in the real world physically. Example: Person, car, etc. Intangible Entity : Entities that exist only logically and have no physical existence.
What is the equivalent of LLC in the Philippines? ›
Although the Philippines does not endorse the legal concept of a public limited company (PLC) or private limited liability company (LLC), the Philippines' Corporation Code treats a domestic corporation as the closest local equivalent.
