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At a Glance

Proprietorship, concept:

The establishment, management and operations of this form of business organization is not governed by a special law, unlike in the case of corporations.

However, resort to general laws governing civil obligations and contracts or business and commercial transactions may be made.

As a general rule, foreigners may put up single proprietorship business in the Philippines in industries where the constitution and the laws do not impose any restriction or limitation on ownership equity.

In the event that non-Philippine nationals are not allowed to form single proprietorship business in a particular industry, he may still proceed with his business venture through other forms of business organizations such as corporation, partnership or joint venture.

Single proprietorship, how formed; registration requirement:

A single proprietorship is the simplest form of business organization in the Philippines.  It is not encumbered by the strict regulatory laws and rules imposed upon corporations and partnerships.

Government registration of a single proprietorship business is simple.  It is made through the Bureau of Trade Regulation and Consumer Protection of the Department of Trade and Industry [DTI].

Single proprietorship, liability of proprietor:

The single proprietor has unlimited liability in the sense that creditors of his business may proceed not only against the assets and property of his business but after his own personal assets and property.  Creditors with whom he had incurred personal debts may also run after the assets and property of his single proprietorship business.  Simply put, the law does not make any distinction between his personal affairs and his business transactions.  Before the eyes of the law, they are one and the same, his business being a mere extension of his person.


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