Have you ever considered setting up an online selling business? Especially during this new normal, looking for an online, profitable source of income is all the rage, and online selling is one of the more popular options. If you already have or are planning to establish an online business, you will have to have your business registered just like other businesses, even if all your transactions are held online.
While small online businesses (those who earn less than P250,000 annually) are exempt from registering their business activity, it is still recommended that you register if you have plans of growing and expanding your business in the future. By legitimizing your business via registration, you also build better trust with your consumers, and you can avail of loans, subsidies, and other government benefits.
Here’s a comprehensive guide to help you register your online selling business, from registering your business name at DTI and BIR to acquiring a Mayor’s Permit from your LGU.
How to register your business name at DTI: Online Application
Registering your business name is required to give your online business a legal and exclusive identity. This means that no other business in your chosen coverage can have the same name as your own.
DTI Business Name Registration Requirements:
- A valid and available business name
- Business name registration fee, depending on the chosen business territorial scope:
- Barangay – P200
- City/Municipality – P500
- Regional – P1000
- Nationwide – P2000
- P30 Documentary Stamp Tax
4 steps for DTI Business Name Registration
- Check whether your business name is valid and available. Visit the DTI Business Name Search page and enter the keywords of your prospective business name to make sure it is available in your location.
- Fill out the online registration form. Once you have confirmed that your prospective business name is available, visit the DTI Business Name Registration page. Fill out all the required fields such as your personal information, proposed business name, and business scope.
- Pay the business registration fee and Documentary Stamp Tax within five calendar days after online application. Choose among DTI’s payment options such as GCash, PayMaya, debit or credit card, or via DTI teller.
- Print your Certificate of Business Name Registration. Once paid, a verification code will be sent to your email address which you can use to access your certificate via the DTI website under Transaction Summary.
Your business name is now officially registered and valid for 5 years, subject to renewal after its expiry.
How to acquire a Business/Mayor’s Permit
A Mayor’s Permit is what allows your business to operate in your location. Getting a mayor’s permit is more exhaustive because there are more documents that you need to prepare before acquiring your permit.
Fortunately, since June 1, 2020, a Mayor’s Permit is no longer a mandatory requirement when registering your online business.
How to register your business at BIR
BIR Business Registration Requirements:
- DTI Certificate of Business Name Registration
- At least one (1) valid government-issued ID
- P500 BIR registration fee
- P100 BIR certification fee
- P30 Documentary Stamp Tax
4 Steps for BIR Business Registration
- Visit the BIR Revenue District Office (RDO) that has jurisdiction over your area. Make sure to bring the necessary documents and the payable fees.
- Fill out the necessary forms. When registering an online business with you as the sole proprietor, you need to fill out the Application Form (BIR Form 1901) and the Payment Form (BIR Form 0605). Have your documents assessed by the Officer of the Day.
- Pay the necessary fees at the BIR Payment Counter. Once paid, submit the proofs of payment and the necessary requirements to the officer. If everything is in order, you will be given a claim stub showing the date when you can claim your certificate.
- Claim your BIR Certificate of Registration. After three to five business days, visit the RDO to claim your Certificate of Registration (COR). You will also be instructed to accomplish the Application for Authority to Print Receipts and Invoices.
As mandated by the BIR last June 10, 2020, all qualified business owners (i.e. earning more than P250,000 annually), even those that are into digital transactions like online selling and dropshipping, must register their business to ensure that it follows the provisions of the Tax Code. Non-registered businesses who register before July 31, 2020 will receive no penalty for the late registration and late filing for past transactions.
This mandate by BIR is meant towards larger online businesses, so micro-enterprises need not worry about registering and being taxed for their small businesses. Still, if you have plans of expanding your business or availing government benefits for your business like loans and tax breaks, properly registering your business is something you need to look into.