Republic of the Philippines Department of Education PUBLIC TECHNICAL-VOCATIONAL HIGH SCHOOLS

Unit of Competency: Legalize a Business

Module no. 5

Module Title: Legalizing a Business

TABLE OF CONTENTS Module Title. Legalizing a Business.........................................1 Pre-test...........................................................................................1 LO1. Enumerate and Explain the Procedure in Legalizing Business.....................................................................1 Let Us Study....................................................................................1 Procedure in Registering a Business.....................................4 Benefits Derived from Registering your Business.................4 Sample of Legal Documents..................................................6

Let Us Remember...........................................................................12 How Much Have You Learned?........................................................12 Let Us Apply What You Have Learned.............................................12 Post-Test.........................................................................................16 Key to Correction............................................................................17

HOW TO USE THIS MODULE

Welcome to the Module Legalizing a Business. This module contains instructional materials and activities for you to complete. The unit of competency Legalize a Business contains the knowledge, skills and attitudes required for the course Entrepreneurship. You are required to go through a series of learning activities in order to complete each of the learning outcomes of the module. Follow these activities on your own and answer the Self-Check at the end of each learning activity. If you have questions, dont hesitate to ask your teacher for assistance.

MODULE V COURSE UNIT OF COMPETENCY MODULE TITLE SUGGESTED DURATION : : : : ENTREPRENEURSHIP III LEGALIZE A BUSINESS LEGALIZING A BUSINESS 12 HRS

WHAT IS THIS MODULE ABOUT? This module covers the knowledge, skills, attitudes and values needed in legalizing a business. WHAT WILL YOU LEARN? At the end of this module, you should be able to: a. enumerate the procedure in legalizing the business; b. gather legal documents pertaining to business/enterprise; and c. explain the importance of registering the business to various government offices. WHAT DO YOU ALREADY KNOW? Pre-test Let us find out how much you already know about legalizing a business. Read and understand the questions below. Choose the correct answer by writing the letter of your answer in your quiz notebook. 1. After registering with the DTI, the certificate becomes your proof of _____. a. authority to operate a business b. business ownership c. license to operate d. payment of taxes 2. Where do you need to go to in order to secure the municipal license or Mayors permit which will serve as your license or permit to operate the business? a. BIR b. BPLO c. CDA d. DTI

3. Article of Partnership or Article of Incorporation should be registered with this agency. a. BIR b. DTI c. SEC d. YECS 4. If you need to systematize the payment of taxes of your business, where will you go? a. BIR b. DOLE c. SEC d. SSS 5. It is necessary to register your business to make it _____. a. functional b. legal c. operational d. profitable

LESSON 1 ENUMERATE AND EXPLAIN THE STEPS/PROCEDURE IN MAKING THE BUSINESS LEGAL WHAT IS THIS LESSON ABOUT? This lesson discusses the steps/procedure in making the business legal. WHAT WILL YOU LEARN? At the end of the lesson, you should be able to: 1. enumerate and explain the steps/procedure in legalizing a business; 2. gather legal documents pertaining to business; and 3. emphasize and explain the importance of registering the business and various government offices. LET US STUDY Words to Study Ownership means an exclusive right of a person to a business Authorization is the issuance of approval to operate Legalize means to be permitted by law DTI Department of Trade and Industry DOLE Department of Labor and Employment SSS Social Security System SEC Securities and Exchange Commission CDA Cooperative Development Authority BPLO Business Permit and Licensing Office

Legality of your business venture is necessary to make your operation legal. The following pages show some of the documents to be secured from the different governments agencies to run your enterprise legally. Without compliance with the legal requirements your business is considered illegal. These are documentary transactions between the owner of the business and the government.

I need to get a permit for my business, where can I ask for assistance?

DTI DOLE SSS SEC BPLO CDA Barangay Permit or Business Clearance

The following is the procedure in registering a business as mandated by the Introduction to Entrepreneurs of Small Enterprises, Research and Development Foundation (SERDEF). Register your business name with the Department of Trade and Industry (DTI). The certificate issued after registration becomes your proof of business ownership. Register with your municipal city government. When you have a municipal license or a mayors permit, this serves as your authorization to conduct or operate the business. Register with the Bureau of Internal Revenues (BIR). This will help systematize your financial operation and payment of taxes. You have to register at the Social Security System (SSS) if you have five or more employees. Register the Article of Partnership or Article of Incorporation with the Securities and Exchange Commission (SEC). Register with the Department of Labor and Employment. There are several benefits derived from registering your business with the government, as follows: 1. When you register your business with the Department of Trade and Industry, the certificate issued to you becomes your proof of business ownership. 2. The municipal license or Mayors permit issued to you serves as an authorization for you to operate your business. 3. Your registration with the Bureau of Internal Revenue will help you systematize your financial operations and the payment of taxes. 4. If you have registered your business enterprise with Cooperative Development Authority (CDA)which is optional, you can enjoy the following privileges:

a. Exemption from taxes and fees except from real property and capital gains tax, import duties and taxes, value-added tax on imported articles, taxes on income not arising from the CDA activity such as interest, royalties, prizes and dividends. b. Exemption of the CDA derived income from the computations of the owners or members in division. c. Exemption from any government rules and regulations on assets, income and activities directly connected with the services of CDA. It is a must to register your business for your own benefit and protection. When your business has been registered you are now ready to own your business and face challenges coming your way. (The following pages show some samples of legal documents pertaining to business/enterprise.)

Sample of Local Business Clearance as Issued and Signed by the Office of the Barangay Captain

Sample of Business Permit and Licence to be Issued by the Office of the Mayor Front Page

Back Page

LET US APPLY WHAT YOU HAVE LEARNED Activity 1. Interview a business owner in your neighborhood. Ask him/her how the business was registered, how much it costs him/her to register his/her business. Share interview results with the class. Activity 2. Interview a shareholder of a successful cooperative enterprise. Ask how he/she registered the business and how much is the cost. LET US REMEMBER

As an entrepreneur, it is important to register your business to various government offices for your own benefit and protection.
HOW MUCH HAVE YOU LEARNED? Activity 1 Write the steps in registering your business. Record them in the correct order. Do this in your quiz notebook.

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Activity 2 Filling-up of legal forms. Directions: Fill-out the application form in applying for a business permit. Front Page

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Back Page

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RESOURCES: References Legal documents from different government agencies Business plan REFERENCES: Villanueva, et. al. Business Management III, Adriana Publishing Co. Inc., pp.119-121, Cubao, Quezon City Teneza, et. al. Business Management III, Shekinah Publishing and Printing Press, pp.173-176, Las Pinas City http://www.businessplanpro.com http//www.business.org http//www.businessdictionary.com

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Post-Test Let us find out how much you already know about legalizing a business. Read and understand the questions below. Choose the correct answer by writing the letter of your answer in your quiz notebook. 1. After registering with the DTI, the certificate becomes your proof of _____. e. authority to operate a business f. business ownership g. license to operate h. payment of taxes 2. Where do you need to go to in order to secure the municipal license or Mayors permit which will serve as your license or permit to operate the business? a. BIR b. BPLO c. CDA d. DTI 3. Article of Partnership or Article of Incorporation should be registered with this agency. a. BIR b. DTI c. SEC d. YECS 4. If you need to systematize the payment of taxes of your business, where will you go? a. BIR b. DOLE c. SEC d. SSS 5. It is necessary to register your business to make it _____. a. functional b. legal c. operational d. profitable

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KEY TO CORRECTIONS Pre-test and Post-Test 1. 2. 3. 4. 5. B B C A B

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