I want to start a small business on my own. How do I register a sole proprietorship with the DTI, the barangay, the mayor's office and the BIR?

Why

A sole proprietorship is not a separate legal person. Unlike a corporation, it has no existence apart from its owner: the business's contracts, debts and taxes are the owner's own. That is what makes it the simplest form to set up, and also why a creditor of the business can go after the owner's personal property.

The first step is the business name. Act No. 3883, the Business Name Law, Section 1, prohibits using any name other than your true name on receipts, contracts or other evidence of a business transaction without first registering that name. Registration is now done with the Department of Trade and Industry (DTI), which also checks that the name is not already taken. If you trade only under your own full name, the business-name requirement technically does not bite, but most LGUs and banks will still ask for the DTI certificate. The registration fee depends on whether the name is registered at barangay, city, regional or national scope; check the current rate on the DTI's registration site.

Next come the local permits. Under Section 152(c) of the Local Government Code (Republic Act No. 7160), no city or municipality may issue a business permit unless a clearance is first obtained from the barangay where the business is located, and the barangay must act on the clearance application within seven working days. The mayor's permit itself is issued by the city or municipal mayor under the powers in Sections 444(b)(3)(iv) and 455(b)(3)(iv) of the Code. Republic Act No. 11032, the Ease of Doing Business Act, requires LGUs to use a single unified business application form, to run a Business One-Stop Shop (BOSS), to issue barangay clearances for business at the city or municipal level, and to issue sanitary and similar local clearances together with the business permit. A business permit is valid for one year.

Finally, the BIR. Section 236(A) of the National Internal Revenue Code, as amended by the Ease of Paying Taxes Act (Republic Act No. 11976), requires every person subject to an internal revenue tax to register once, electronically or manually, on or before the commencement of business. BIR registration gives you your Certificate of Registration, the tax types you must file, and the authority to issue registered invoices. The same Act removed the old ₱500 Annual Registration Fee, so there is no yearly BIR registration fee to pay.

Government offices must act within fixed processing times under Republic Act No. 11032: no longer than three working days for simple transactions and seven working days for complex ones, and up to twenty working days for applications that pose danger to public health, safety or morals, or that are highly technical. A denial must be explained in writing. If an office sits on your complete application beyond its Citizen's Charter period, you can raise it with the office head or the Anti-Red Tape Authority.