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Friday, March 29, 2013

ARE YOU LEGAL?


ARE YOU LEGAL? 

Every year since I retired from the corporate world, I set up a business for myself or help set up businesses for others especially my student entreps and mentees. Currently, I’m teaching at the Makati Medical College. Who? Senior nursing students who I believe will have a challenge finding nursing jobs by the time they graduate this April 2013. 

Registered Business Name
Whether in undergraduate programs, Master’s degree at the Asian Institute of Management (AIM), or weekend entrep courses with Bro. Bo (under Beacon Light Events), the standards to teach entrepreneurship are the same: it is not just theory but rather execution! 

As part of my ‘Venture into Entrep’ subject, the requirements for a GOOD EXECUTION (not passing grade only) are two things: 

a. Business plan with napkin economics (10 page summary of the venture); 

b. Business registration (actual certificate of DTI registration). 

Why Do I Need to Be Legal? 
The best way of looking at this requirement is to consider that your business is your newborn child. Any parent would be proud of his/her child and would definitely want togive the child a name, a birth certificate from the City Hall, and a baptismal certificate (for Catholics) from the local parish. No parent would want his or her child to be illegitimate or be taken by someone else other than the real parent. Right?

In a business set-up, we don’t want our business to be illegitimate – Bawal ang kabit! (As a cable company advertisement would say) or be taken over by someone else (private or government) in the future. 

If Any of These Situations Happen, Then You Need to Be Legally Registered: 

• Will you rent a space other than your own house? 

• Will you have a signboard or tarp outside your business place (home or rented space)? 

• Will you allow customers to enter your business place? 

• Will you want to grow your business and bid for government or corporate accounts? 

• Will you in the future, need a business loan from a bank or financial institution? 

• Will you in the near future need partners other than your immediate relatives to fund any business expansion? 

Caution to Online Entrepreneurs: The BIR will start to do tax mapping for Internet businesses this 2013.

To be Legal Is Easy! 
You can either do the manual and traditional way (BTRCP Form 16A 2011 edition), or the virtual way via the website of DTI (http://www.bnrs.dti.gov.ph/web/guest/registration). 

Let me highlight what’s in the BNRS (Business Name Registration System) online system: Applicants who want to reserve a business name are advised to have several alternatives. It is fairly common that first choice cannot be registered because (a) it is already reserved, or (b) it is similar or confusingly similar to an existing business name. 

Your name should be descriptive as well as distinctive. We will help you ensure your name is distinctive by looking for similar names that are already registered. Click on the Check Availability button after you finish entering your proposed business name. If the Business Name Registration System finds your proposed business name available, you can proceed to register the name. We reserve your business name for five (5) days only. 

Business Name (BN) is subject to the Terms and Conditions set forth under the Revised Implementing Rules and Regulations of Act 3883, known as “Business Name Law.” Your proposed Business Name (Taken from BNRS website) MUST: 

• Not be used for business that is illegal, offensive, scandalous, or contrary to propriety (Example: Popoy’s Jueteng Betting Place, Boobs Massage and Spa); 

• Not be the same or nearly the same as an existing registered business, company, partnership, corporation (Securities and Exchange Commission), cooperative name (Cooperative Development Authority); nor it infringes on any trademark, service mark and trade name (Intellectual Property Office) (Example: Anne Dok’s Lechon, Jolibee, Starbax Cafe); 

• Not be composed purely of generic or geographic words (Example: The Laundry Shop, Bacolod); 

• Not be a name which by law or regulation cannot be appropriated (Example: OTOP, Intelligence, State College, CALABARZON); 

• Not be used to designate or distinguish, or not suggestive of quality of any class of goods, articles, merchandise, or service (Example: Best Taho Factory, A-1 Auto Repair Shop); 

• Not be a name or abbreviation of a name used by the government in its governmental functions (Example: NBI Private Investigation Services, DTI Trading); 

• Not be a name or abbreviation of a name of any nation, inter-governmental or international organization (Example: Philippine Manpower Pooling Agency, UNESCO Marketing, WHO Health Services); and, 

• Not be deceptive, misleading or which misrepresents the nature of business (Example: ABC Construction Services where nature of business is recruitment, a business name carrying another person’s name). 

Are you Legal?
Based on experience, talking to a DTI officer via the traditional paper application is easier (except for the time that you need to queue at the DTI office) than interacting with a computer system that has many restrictions. 

Don’t get me wrong, the BNRS online system is a good system to deter unscrupulous people that would want to deceive consumers.  

Final Advice 
Once you have an approved business name1, my suggestion is to pay either the city (P500) or regional (P1000) territorial scope versus barangay (P200)2. Why? You are registering it not only for the business NOW but also in the near future. 
Remember: Business is not a 100-meter dash but rather a marathon race—it is for the long run.

Source: Wrote by Dean Pax, TrulyRichClub Wealthatrategy



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