Business Compliance 101: The Basics Every Business Owner Should Know
- IEN Business Consultancy
- Feb 18
- 3 min read
Running a business in the Philippines is an exciting venture, but ensuring your operations are compliant with government regulations is crucial. Business compliance not only protects you from penalties but also establishes credibility and trust with your clients and partners. Let’s break down the essentials every business owner must know to stay compliant in 2025.
1. Business Registration: The Foundation of Compliance
Every business in the Philippines must be registered with the following agencies:
Department of Trade and Industry (DTI) for sole proprietorships.
Securities and Exchange Commission (SEC) for partnerships and corporations.
BIR Registration secure your Certificate of Registration (COR) and have official receipts or invoices printed.
Local Government Unit (LGU) for your mayor’s permit and barangay clearance.
Government Mandatories for employees and employers monthly government mandatory contribution
Registration ensures that your business operates legally and can access government services and support programs.
2. Tax Filings and Compliances
After registration, you need to secure a Tax Identification Number (TIN) with the Bureau of Internal Revenue (BIR). Here are the key steps:
Regular Tax Filing and Payment: File and pay your taxes on time, including Value-Added Tax (VAT) or Percentage Tax, Income Tax, and Withholding Tax. Use the updated eBIR Forms or eFPS for online submissions.
Reportorial Submission: Making sure that all reports and submittals are completed and received by the BIR
Bookkeeping: Maintain organized records of transactions and keep them for at least 10 years as required by law.
Adherence to Revised Revenue Regulation: All taxpayers are required to follow and adhere to the new regulations periodically issued by the bureau.
Employee and Employer Mandatory Contributions
If your business employs staff, you’re required to remit mandatory contributions to government agencies and enjoy correlated benefits, thereof:
SSS (Social Security System): Provides retirement, disability, and other benefits for employ
PhilHealth: Ensures employees have access to healthcare benefits.
Pag-IBIG Fund: Helps employees with savings, housing loans, and other financial assistance.
Failure to remit these contributions can result in compromise penalties and interests, and affects the employer's record.
Staying Updated with Labor Laws
Understanding and adhering to labor laws is essential for businesses with employees. Key compliance points include:
Minimum wage requirements (check for regional rates).
Proper contracts and employment terms.
Compliance with holiday pay, overtime, and leave entitlements.
The Department of Labor and Employment (DOLE) provides updates and guidelines, so stay informed to avoid violations.
5. Renewal of Permits and Licenses
Compliance doesn’t end after registration. Annual renewals are necessary to keep your business operating legally:
Renew your mayor’s permit with the LGU every January.
File and pay your Annual Income Tax Return with the BIR before April 15.
Submit General Information Sheets and Audited Financial Statements to the SEC (for corporations).
6. Be Ready for Audits
The BIR and other regulatory bodies can conduct audits to ensure compliance. Avoid unnecessary stress by:
Keeping records updated and accurate.
Filing reports and paying dues on time.
Responding promptly to notices and inquiries
Why Compliance Matters
Compliance isn’t just about avoiding fines.
It’s about:
Building Credibility: Clients and investors prefer businesses that operate transparently.
Sustainability: Compliance ensures long-term business viability.
Peace of Mind: Operating legally eliminates unnecessary worries.
Navigating the compliance landscape in the Philippines can be challenging, but it’s a vital aspect of running a successful business. By staying informed and proactive, you not only protect your business but also set the stage for growth and success.
👉If you want to learn more, you can also watch our video related to this article to guide you to become compliant in your business. Just click this link: https://youtu.be/Ep9oxhkrHog
Need help with business compliance? Contact us today and let our team guide you through every step of the process. Visit our website for more resources and tips on business compliance. Don’t forget to subscribe to our YouTube channel for insightful vlogs on this topic and more!
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