If you’re a solopreneur hoping to start a small business, you might be wondering which category your startup will fall under and how to go about securing the corresponding business permits in the Philippines.

If your business falls under the micro business or enterprise category, then you might be eligible to register it as a Barangay Micro Business Enterprise (BMBE).

We have taken the most important information about BMBE and collected them all in this quick guide. Full details of the BMBE Law can be downloaded here.

 

Barangay Micro Business Enterprise (BMBE)

A BMBE is defined under the BMBE Law, RA. 9178 Act of 2002 as “any business enterprise engaged in production, processing, or manufacturing of products, including agro-processing, as well as trading and services, with total assets of not more than P3 million. Such assets shall include those arising from loans but not the land on which the plant and equipment are located.”

 

The BMBE Law

President Gloria Macapagal-Arroyo signed the Act into law on November 13, 2002, to encourage the formation and growth of BMBEs by granting them incentives and other benefits.

 

Objective of the BMBE Law

The country recognizes that small businesses are essential to the economic development of the country. Supporting the growth of BMBEs will increase jobs, provide livelihood, and a better quality of life for Filipinos. The Act then aims to “integrate micro-enterprises in the informal sector into the mainstream of the economy.”

 

Incentives for BMBE Registration

The following incentives are available for registered BMBEs:

•  Income tax exemption from income arising from the operations of the enterprise;

•  Exemption from the coverage of the Minimum Wage Law (BMBE employees will still receive the same social security and health care benefits as other employees);

•  Priority to a special credit window set up specifically for the financing of BMBEs; and

•  Technology transfer, production and management training, and marketing assistance programs for BMBE beneficiaries.

•  Aside from these, the LGUs may also reduce the amount of local taxes, fees, and charges imposed or exempt the BMBEs from local taxes, fees, and charges.

 

Eligibility for a BMBE Registration

Based on the BMBE Law, your business or activity is eligible to apply as a BMBE if it meets the following criteria:

•  It is engaged in production, processing, or manufacturing of products, including agro-processing, as well as trading and services

•  It has total assets of not more than P 3 million, including those arising from loans but not the land on which the plant and equipment are located.

•  The business or service provider, in connection with the exercise of his or her profession, is not a professional duly licensed by the government after having passed a government licensure examination, such as accountants, lawyers, doctors, and the like.

•  It is not a branch, subsidiary, division, or office of a large-scale enterprise and its policies and business modus operandi are not determined by such enterprise or by persons who are not owners or employees of said enterprise, as mandated by the Department of Finance Order No. 17-04.

 

Solopreneur Requirements for a BMBE Registration

Both your first-time BMBE registration and its renewal must take place at the Office of the Treasurer of the city or municipality where your business is located.

The requirements for first-time registration differs depending on the value of your assets.

I.  Basic requirements for new applicants and BMBEs applying for renewal of registration:

a. Duly filled out application form (BMBE Form 01) in triplicate, signed by the owner or manager of the entity applying for registration; and,

b. Three passport size ID pictures.

II.  Additional requirements for new applicants:

a. For those with assets worth three hundred thousand pesos (P300,000) and less

1. Registration as a business entity or enterprise from the appropriate government agency (e.g., Securities and Exchange Commission (SEC) registration in the case of corporation, or association; Cooperative Development Authority (CDA) registration in the case of cooperative; Department of Trade and Industry (DTI) business name registration in the case of sole proprietorship); and

2. Mayor’s Permit or City/ Municipal Business Permit.

b. For those with assets worth more than three hundred thousand pesos (P300, 000) up to three million pesos (P3, 000,000.00)

1. Registration as a business entity as explained above in item no. II.a.1

2. Taxpayer Identification Number (TIN);

3. Certificate of Registration from the Bureau of Internal Revenue (BIR);

4. Mayor’s Permit or City/Municipal Business Permit;

5. Sworn affidavit executed by the sole proprietor or the President of the enterprise, as the case may be, that the enterprise is barangay-based and micro-business in nature and scope;

6. Sworn Statement of Assets and Liabilities supported by pertinent documents;

7. Pictures of the place of business and its assets, other than cash, receivables and intangibles;

8. Copy of Loan Contract/s, if any, and duly-notarized Certification of Amortization Payments on the Loan; and

9. Income Tax Return (ITR).

III. Additional requirements for the renewal of BMBE registration:

a. For those with assets worth three hundred thousand pesos (P300,000) and less

1. Documents previously listed in item II.a.1 for new applicants with assets worth three hundred thousand pesos and less; and

2. Annual Information Return (for the year immediately preceding the renewal of registration) duly filed with the BIR, together with its attachments.

b. those with assets worth more than three hundred thousand pesos (P300,000) up to three million pesos (P3,000,000.00)

1. Documents previously mentioned in item II.b (1-8); and

2. Annual Information Return (for the year immediately preceding the renewal of registration) duly filed with the BIR, together with its attachments.

 

BMBE Registration Procedures

The process for registration is as follows:

a. Accomplish BMBE Form 01 in triplicate and submit to the Office of the Municipal or City Treasurer.

b. The Municipal or City Treasurer evaluates the application. The application shall be processed within 15 working days upon submission; otherwise, the BMBE shall be deemed registered.

c. A registered BMBE shall be issued a Certificate of Authority as proof of registration, effective for two years. The application is renewable every two years.

 

Cost of BMBE Registration

The registration and issuance of the Certificate of Authority of the LGU is free and must be done promptly. However, LGUs are allowed to charge a fee not exceeding P 1,000.00 to defray administrative costs.

As a solopreneur operating a small business on your own, registering as a BMBE will provide you with many benefits.

For more information, you may download the DTI’s Guide to RA. 9178: Barangay Micro Business Enterprises Law (BMBEs) Act.

 

Business Permits Registration and Renewal

 

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