Unit of Competency: Legalize a Business

Module no. 5 Module Title: Legalizing a Business

Republic of the PhilippinesDepartment of Education

PUBLIC TECHNICAL-VOCATIONAL

HIGH SCHOOLS

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, don’t hesitate to ask your teacher for

assistance.

MODULE V

COURSE : ENTREPRENEURSHIP III

UNIT OF COMPETENCY : LEGALIZE A BUSINESS

MODULE TITLE : LEGALIZING A BUSINESS

SUGGESTED DURATION : 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; andc. 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 businessb. business ownershipc. license to operated. payment of taxes

2. Where do you need to go to in order to secure the municipal license or Mayor’s permit which will serve as your license or permit to operate the business?

a. BIRb. BPLOc. CDAd. DTI

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3. Article of Partnership or Article of Incorporation should be registered with this agency.

a. BIRb. DTIc. SECd. YECS

4. If you need to systematize the payment of taxes of your business, where will you go?

a. BIRb. DOLEc. SECd. SSS

5. It is necessary to register your business to make it _____.a. functionalb. legalc. operationald. profitable

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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; and3. emphasize and explain the importance of registering the

business and various government offices.

LET US STUDY

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 government’s 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.

Words to Study

Ownership means an exclusive right of a person to a business

Authorization is the issuance of approval to operateLegalize means to be permitted by law DTI – Department of Trade and IndustryDOLE – Department of Labor and EmploymentSSS – Social Security SystemSEC – Securities and Exchange CommissionCDA – Cooperative Development AuthorityBPLO – Business Permit and Licensing Office

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DTI DOLE SSS SEC BPLO CDABarangay 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 mayor’s 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 Mayor’s 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:

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

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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.)

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

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

Front Page

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Back Page

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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

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.

As an entrepreneur, it is important to register your business to various government offices for your own benefit and protection.

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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:

ReferencesLegal documents from different government agenciesBusiness 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.comhttp//www.business.orghttp//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 businessf. business ownershipg. license to operateh. payment of taxes

2. Where do you need to go to in order to secure the municipal license or Mayor’s permit which will serve as your license or permit to operate the business?

a. BIRb. BPLOc. CDAd. DTI

3. Article of Partnership or Article of Incorporation should be registered with this agency.

a. BIRb. DTIc. SECd. YECS

4. If you need to systematize the payment of taxes of your business, where will you go?

a. BIRb. DOLEc. SECd. SSS

5. It is necessary to register your business to make it _____.a. functionalb. legalc. operationald. profitable

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KEY TO CORRECTIONS

Pre-test and Post-Test

1. B2. B3. C4. A5. B

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