Setting Up a Partnership Business in the Philippines

A partnership is a business entity consisting of at least two people who aim to manage a business by pooling their resources and property into a common fund. The profits and losses of the company are shared between the partners. There are two classifications of partnerships: general and limited. Before starting a partnership, it’s essential to know the difference between the two business structures to pick the one that suits your business the best.

Classification of Partnerships in the Philippines

General Partnership

• In a general partnership, all partners have an equal part. Each partner must manage the company and make business decisions. All partners have equal responsibility regarding the duties and debts of the company. 

Limited Partnership

• Limited partners act more or less as investors in the business. They do not make decisions concerning the company. In this type of partnership, some partners are held accountable only to the extent of their capital contributions.

Establishing a partnership has its pros and cons. Read them below:

• Partners share the losses between themselves. 
• Due to mixed resources, partnerships may get bigger loans from banks compared to sole proprietorship businesses. 
• There are fewer requirements for setting up a partnership than in a sole proprietor entity.
• Expenses for setting up are comparatively low compared to starting a corporation.
• Higher probability of capital due to more sources than a sole proprietorship.

• Assets and personal property are at risk with a General Partnership structure because of the unlimited liability of partners. However, some partners are held accountable based on their capital contribution if you are in a Limited Partnership business.
• Partnerships may be dissolved easily when incapacity, withdrawal, death, and other issues arise.

1. Apply for business registration with SEC.

• Register your name with the Securities and Exchange Commission (SEC). Prepare to bring notarized articles of partnership, a joint affidavit, a clearance endorsement, and a SEC Form 105 for those who have foreign partners. 

2. Deposit paid-up capital in the Authorized Agent Bank (AAB).  

• After making the deposit, claim your bank certificate of deposit. 

3. Have the Articles of Partnership notarized. 

• Head to the notary public and notarize your Articles of Partnership with your Treasurer’s Affidavit. 

4. Obtain a Barangay Clearance.

• Visit your local barangay and secure a barangay clearance.  A barangay clearance proves that your organization complies with the laws set by your local barangay. Bring two valid government IDs, a Community Tax Certificate (CTC) or Cedula, Contract of Lease or Certificate of Land Title as proof of address, and SEC certificate of registration. Complete the form and pay the clearance fee. 

5. Secure a Business Permit (Mayor’s Permit). 

•  Get a Business Permit a.k.a. Mayor’s Permit, at the City Hall/Municipal Hall in your business location. A business permit provides clients with the security of knowing that your enterprise is a legal business and that it abides by the rules set by your city. Requirements for obtaining a business permit include barangay clearance, community tax certificate, sanitary permit, occupational permit, and other licenses depending on your local government. 

 6. Apply for business registration with the BIR. 

• Registering your partnership business with the Bureau of Internal Revenue (BIR) is also crucial. Registration will enable you to get a Tax Identification Number (TIN), register your book of accounts, and issue invoices to clients. Be ready to submit requirements including a valid government or PRC ID, annual registration fee of P500, completed and paid BIR Form 0605, SEC certificate of registration, books of accounts, and sample format of invoices. 

7. Apply for SSS registration. 

• A partnership business must register its employees in the Social Security System (SSS). SSS delivers insurance benefits to employees. To register, prepare to bring a copy of your Articles of Partnership, a sketch of your business location, SS Forms R-1A and R1, and SS Form R-6 or SS Form R-6 with Special Bank Receipt. 

8. Apply for PhilHealth registration.

• Under Republic Act Number 7875, Filipinos should be covered under the National Health Insurance Program. The law includes all Filipino employees, and all kinds of businesses including partnerships must register their employees. To apply for registration, head towards a Local Health Insurance Office in your office location and submit a completed Employer Data Record Form (ER1). Other requirements include two copies of each employees’ Philhealth Membership Registration Form, and a copy of your business permit to the SEC. 

9. Apply for Pag-Ibig registration. 

• Get registered as a Pag-Ibig employer by going to a Pag-Ibig center near you, filling up an Employer’s Data Form (EDF), and submitting requirements like your business permit and SSS certificate of membership. 

Learning the process, time, and effort of starting a partnership business may be challenging. We suggest you contact the experts. 

Business Registration Philippines is a website dedicated to helping investors, business owners, and other stakeholders establish and incorporate their enterprises. Topics range from Accounting, Finance, Human Resources, Business Process Outsourcing, Product Registration, Taxation, and more. It is a microsite of Triple i Consulting Inc. 

Triple i Consulting’s knowledge and skills in business establishment, Philippine incorporation, and the Philippine taxation system date began in 2007. Specializing in accounting, business registration, business incorporation, FDA licensing, and FDA product registration, Triple i Consulting is the first ISO 9001:2008 company in the Philippines to offer business registration services to its clients. 

Business Registration Philippines, together with Triple i, provides high-quality services for setting up a partnership business:

• Accounting services
• Bookkeeping services
• Corporate compliance
• Labor consultation
• Office fit-outs
• Payroll processing
• SEC registration 
• Securing the business permit

To learn more and book an initial consultation with one of our business registration experts, contact us through one of the following methods:

• Contact Us Here
• Fill Out the Form Below
• Call us at +63 (02) 8540-9623
• Email us at info@tripleiconsulting.com