Not a walk in the park but a grope in the dark.
So you want to create a business? Maybe out of the spark-of-the moment or a fruit of deliberate premeditation after more than two decades tired of being tied up in a pole of fixed-income employment. A spirit of entrepreneurship buzzing about your head must have prodded you to take a bold risk for this new adventurism.
Or you intend to make a new business? After failing one to succeed out of slapdash embarkation into the unknown territory. Or maybe falling out with a business partner over irreconcilable differences or got lopsided by an affiliate carting away with a bigger pie of the whole profit share
Whatever your motivation maybe, to go into business may not be a walk in the park but it might be a grope in the dark kind of endeavour. For sure, it would compel you to calculate every risk identified with a measured but sustained way of executing step-by-step process. But don’t ignore your gut feel. A mix of intuition in the whole equation would be of best match to strike a balance when logic would not reign because of the things hidden from the view.
Indeed, it is not an easy decision but requires a very detailed way of scanning the environment before making a choice in every decision point. The first step is to make a choice if you give a green light. Be firm on this choice because U-turn may not only be curvy but costly. Once you step forward, you will start to navigate through the steps of registering your business and be mindful that in every juncture calls for a right choice
Going Solo, Dou or Chorus?
At the start, choosing what kind of business organization you want to create, either a sole proprietorship or partnership or corporation, may seem not so daunting. Either bad or good, your experience or sheer lack of it may aid you in making a choice. If you are a rookie, you may prefer to go solo with your, say, MBA degree, as your skill tank plus a start-up capital with six-month buffer fund. To go into this track is less stringent than any other path.
All you have to do is go to the Department of Trade and Industry (DTI) office where you intend to establish your business or log on to www.bnrs.dti.gov.ph where you can register the name of your business or apply for renewal after the expiry of its five-year validity. Through the DTI office you may accomplish and submit the requirements to include: Business Name Registration form in duplicate copies, one (1) copy of government issued ID and payment of registration fee which may vary depending on the territories you want to reach with your business operation with lesser to pay if it covers only the barangay or municipal but it gets higher if your want to cover regional or even up to national area.
But if you have capital, albeit lacking in experience, you may consider a partner or partners with business acumen and wealth of experience on board. However, be cautious in your dealings with your potential partners. Other than factors of skills, experience or capital contribution, you need to do a due diligence with regards to their backgrounds such as their pedigree, credit reputation, standing in community and personal integrity and even the level of emotional intelligence and other behavioural considerations. This way, the risks of whatever nature can be managed and you can avoid recurrence of business blunders in the past, if any.
For any of the trio, you need verify the availability of your desired business name which requires your creative mind for you to develop an identity and earn a brand equity overtime in the future.
Before choosing which is more comfortable to you, learn a little about the type of business you wish to embark into. If you prefer a partnership, take note that “by the contract of partnership, two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of dividing the profits among themselves.” Xxx (Art. 1767, Philippine Civil Code).
On the other hand, “a corporation is an artificial being created by operation of law, having the right of succession and the powers, attributes and properties expressly authorized by law or incident to its existence.” (Sec 2, Corporation Code (BP 68). Recently, it has evolved with new amendments through a Revised Corporation Code (RCC) of the Philippines (Republic Act 11232)
The registration process for Partnership and Corporation will find its path to Security and Exchange Commission holding its main office in Manila with regional offices in major cities of the Philippines. With SEC, you can start the registration either as a partnership or corporation and you may ask assistance with their assigned staff and personnel. But for your convenience and efficiency, you may log on to www.sec.gov.ph where you will be guided through the process and requirements to register your business. Better yet, to be free of any hassle and for you to focus on far more substantive business matters, you can outsource the registration to lawyers or outsourced business processing firm.
A cooperator for economic justice
Further, if you have embraced an advocacy that business builds a community and a vehicle for social justice, you may opt to organize a cooperative with your peers of common interest or become a member of an existing one which you deem to have shared the same values of self-reliance and economic justice with you. As a snapshot, “a cooperative is an autonomous and duly registered association of persons, with a common bond of interest, who have voluntarily joined together to achieve their social, economic, and cultural needs and aspirations by making equitable contributions to the capital required, patronizing their products and services and accepting a fair share of the risks and benefits of the undertaking in accordance with universally accepted cooperative principles. (Art. 3, RA 9520)” socially noble as it may sound with principles of democratic control, economic participation and autonomy coupled with tax incentives and credit facilities, yet you may entertain a secong thought that this venture limits your potential for exponential growth. It is because you cannot put up a share more than what is set by law. To enhance your knowledge and arouse more your interest in coopeerativism, you may log on to https://www.cda.gov.ph .
Self-determined or government-dependent
In any of the three types of business organizations, you can avail the incentives bestowed upon by “Barangay Micro Business Enterprises (BMBEs) Act of 2002.” “BMBE refers to any business entity or enterprise engaged in the production, processing or manufacturing of products or commodities, including agro-processing, trading and services, whose total assets including those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated, shall not be more than Three Million Pesos (P3,000,000.00).” (Sec. 3a, R.A. 9178)
If your business that you want to start is capital-challenged, you may seek shelter under this law and avail of exemptions on taxes, minimum wage and gain access to credit facility and enjoy technology transfer, production and management training and marketing assistance. A bit of a warning though, you may be confronted with a wrong perception by your customers and suppliers that with a three million capital ceiling, you will be exposed as still a business neophyte who would have a hard time of earning trust and patronage.
Match your gut with gist
that as it may, the challenge lies not so much neither on external business environment nor on the legal requirements no matter how harsh and arduous they maybe. The real barrier lies in us, on how responsibly careful we are in making our choices; on what kind of path we need to take everytime we stop by the crossroad; on how we match our gut with gist to arrive at the right choice on every decision point of creating a prosperous business.
About McGordon Consulting
McGORDON CONSULTING GROUP – is a three-dimensional management consultancy firm revolving around but heavily focusing on three avenues of service intervention – Merger, Acquisition and Creation (M.A.C.) – to cater three emerging industries construction and real estate, cyber and information technology and other significant corporate businesses. To learn more about Decision Points In Creating A Business, visit mcgordonconsulting.com.
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