DEPARTMENT ADMINISTRATIVE ORDER NO._______ Series of 2003. SUBJECT: Implementing Rules and Regulations of R.A. 9178 !

t"e#$ise %no$n as t"e &Ba#anga' (i)#o Business Ente#p#ises *B(BEs+ A)t of ,--,. Pursuant to Sec. 15 of R.A. 1!"# ot$er%ise &no%n as t$e '(aran)a* Micro (usiness Enter+rises ,(M(Es- Act of 2002.# an/ after consu0tation %it$ t$e De+art1ent of t$e Interior an/ 2oca0 3o4ern1ent ,DI23-# De+art1ent of 5inance ,DO5- an/ t$e (an)&o Sentra0 n) Pi0i+inas ,(SP-# an/ ot$er concerne/ a)encies# t$e fo00o%in) Ru0es an/ Re)u0ations )o4ernin) (M(Es are $ere6* +ro1u0)ate/ for t$e co1+0iance# infor1ation an/ )ui/ance of a00 concerne/. I. /RE0I(I1AR2 /R!3ISI!1S Sec. 1. 4e)la#ation of /oli)'. As state/ in Sec. 2 of RA 1!"# it is t$e +o0ic* of t$e State to $asten t$e countr*7s econo1ic /e4e0o+1ent 6* encoura)in) t$e for1ation an/ )ro%t$ of 6aran)a* 1icro 6usiness enter+rises %$ic$ effecti4e0* ser4e as see/6e/s of 5i0i+ino entre+reneuria0 ta0ents# an/ inte)ratin) t$ose in t$e infor1a0 sector %it$ t$e 1ainstrea1 econo1*# t$rou)$ t$e rationa0i8ation of 6ureaucratic restrictions# t$e acti4e inter4ention of t$e )o4ern1ent s+ecia00* in t$e 0oca0 0e4e0# an/ t$e )rantin) of incenti4es an/ 6enefits to )enerate 1uc$9nee/e/ e1+0o*1ent an/ a00e4iate +o4ert*. Sec. 2. 4efinition of Te#ms. : ;$en use/ $erein# t$e ter1< a. A)t9 s$a00 refer to t$e '(aran)a* Micro (usiness Enter+rises Act of 2002.. 6. Ba#anga' (i)#o Business Ente#p#ise *B(BE+ : as /efine/ in Sec. 3a of t$e Act# s$a00 refer to an* 6usiness entit* or enter+rise en)a)e/ in t$e +ro/uction# +rocessin) or 1anufacturin) of +ro/ucts or co11o/ities# inc0u/in) a)ro9+rocessin)# tra/in) an/ ser4ices# %$ose tota0 assets inc0u/in) t$ose arisin) fro1 0oans 6ut e=c0usi4e of t$e 0an/ on %$ic$ t$e +articu0ar 6usiness entit*7s office# +0ant an/ e>ui+1ent are situate/# s$a00 not 6e 1ore t$an T$ree Mi00ion Pesos ,P3#000#000.00- su6?ect to re4ie% an/ u+%ar/ a/?ust1ent 6* t$e SMED @ounci0# as 1an/ate/ un/er Re+u60ic Act A !!# as a1en/e/ 6* Re+u60ic Act "2" . A (M(E s$a00 inc0u/e an* in/i4i/ua0 o%nin) suc$ 6usiness entit*Benter+rise# +artners$i+# coo+erati4e# cor+oration# association or ot$er entit* incor+orate/ an/Bor or)ani8e/ an/ e=istin) un/er P$i0i++ine 0a%sC an/

re)istere/ %it$ t$e office of t$e treasurer of a cit* or 1unici+a0it* in accor/ance %it$ t$is i1+0e1entin) ru0es an/ re)u0ations. 'Ser4ices. s$a00 e=c0u/e t$ose ren/ere/ 6* an* one# %$o is /u0* 0icense/ 6* t$e )o4ern1ent after $a4in) +asse/ a )o4ern1ent 0icensure e=a1ination# in connection %it$ t$e e=ercise of oneDs +rofession as state/ in Para)ra+$ 2 Sec. 3,a-# RA 1!". c. Ce#tifi)ate of Aut"o#it' *CA+ : s$a00 refer to t$e certificate issue/ to an a++0icant aut$ori8in) t$e sa1e to o+erate as a (M(E an/ to 6e entit0e/ to t$e 6enefits an/ +ri4i0e)es accor/e/ to a re)istere/ (M(E. /. Assets : s$a00 refer to a00 &in/s of +ro+erties# rea0 or +ersona0# o%ne/ 6* t$e (M(E an/ use/ for t$e con/uct of its 6usiness as /efine/ 6* t$e SMED @ounci0< Provided, T$at for t$e +ur+ose of e=e1+tion fro1 ta=es an/ fees un/er t$e Act# t$is ter1 s$a00 1ean a00 &in/s of +ro+erties# rea0 or +ersona0# o%ne/ an/Bor use/ 6* t$e (M(E for t$e con/uct of its 6usiness as /efine/ 6* t$e SMED @ounci0. e. Regist#ation : s$a00 1ean t$e inc0usion of a (M(E in t$e (M(E Re)istr* of a cit* or 1unici+a0it*. f. 5inan)ing : s$a00 refer to a00 6orro%in)s of t$e (M(E fro1 a00 sources after re)istration. II. RE6ISTRATI!1 !5 B(BE Sec. 3. /la)e of Regist#ation. : T$e Office of t$e Treasurer of eac$ cit* or 1unici+a0it* s$a00 re)ister (M(Es an/ issue a @ertificate of Aut$orit* ,@A- to ena60e t$e (M(E to a4ai0 of incenti4es un/er t$e ActC Pro4i/e/# T$at on0* one @ertificate of Aut$orit* s$a00 6e issue/ for eac$ (M(E an/ on0* 6* t$e Office of t$e Treasurer of t$e cit* or 1unici+a0it* t$at $as ?uris/iction o4er t$e +rinci+a0 +0ace of 6usiness of t$e (M(E. Sec. E. 7"o a#e eligi8le to #egiste#. : An* +erson# natura0 or ?uri/ica0# coo+erati4e or

association# $a4in) t$e >ua0ifications $erein 6e0o% enu1erate/# 1a* a++0* for re)istration as (M(E< a. $a4e an asset si8e of not 1ore t$an t$ree 1i00ion +esos ,P3#000#000.00- e=c0u/in) 0an/# 6efore a++0*in) for (M(E re)istrationC an/ 2

6. en)a)e/ in t$e 6usiness acti4ities as /efine/ in Sec. 2,6- of t$is IRR. Sec. 5. Re9ui#ements fo# Regist#ation. T$e a++0icant for (M(E re)istration s$a00 su61it t$e /u0* fi00e/ u+ a++0ication ,(M(E 5or1 01- in tri+0icate# si)ne/ 6* t$e o%ner or 1ana)er of t$e entit* a++0*in) for re)istration. Sec. A. /#o)edu#es fo# Regist#ation. T$e fo00o%in) are t$e +roce/ures %$en a++0*in) for re)istration as (M(E< a. an a++0icant for (M(E s$a00 )o to t$e Office of t$e Munici+a0 or @it* Treasurer %$ere t$e 6usiness is 0ocate/C 6. t$e a++0icant s$a00 acco1+0is$ (M(E 5or1 01 in tri+0icate an/ su61it to t$e Office of t$e Munici+a0 or @it* TreasurerC c. t$e Munici+a0 or @it* Treasurer e4a0uates t$e a++0ication. A++0ication s$a00 6e +rocesse/ %it$in fifteen ,15- %or&in) /a*s u+on su61ission of co1+0ete /ocu1ents. Ot$er%ise# t$e (M(Es s$a00 6e /ee1e/ re)istere/C an/ /. a re)istere/ (M(E s$a00 6e issue/ a @A as +roof of re)istration# %$ic$ %i00 6e effecti4e for a +erio/ of t%o ,2- *ears# rene%a60e for a +erio/ of t%o ,2- *ears for e4er* rene%a0. Sec. !. 5ees and C"a#ges. : T$e 23Fs s$a00 issue t$e @A +ro1+t0* an/ free of c$ar)e. Go%e4er# to /efra* t$e a/1inistrati4e costs of re)isterin) an/ 1onitorin) t$e (M(Es# t$e 23F 1a* c$ar)e a fee not e=cee/in) One T$ousan/ Pesos ,P1#000.00-. Sec. ". T#ansfe# of !$ne#s"ip. : T$e (M(E s$a00 re+ort to t$e cit* or 1unici+a0it* of an* c$an)e in t$e status of its o%ners$i+ structure# an/ s$a00 surren/er t$e ori)ina0 co+* of t$e (M(E @ertificate of Aut$orit* for notation of t$e transfer. III. I1CE1TI3ES A14 BE1E5ITS Sec. . E:emption f#om ta:es and fees. : A00 (M(Es s$a00 6e e=e1+te/ fro1 inco1e ta= for inco1e arisin) fro1 t$e o+eration of t$e enter+rise.

T$e 2oca0 3o4ern1ent Fnits ,23Fs- are encoura)e/ eit$er to re/uce t$e a1ount of 0oca0 ta=es# fees an/ c$ar)es i1+ose/ or to e=e1+t t$e (M(E fro1 0oca0 ta=es# fees an/ c$ar)es. Sec. 10. E:emption f#om t"e Co;e#age of t"e (inimum 7age 0a$ . T$e (M(Es s$a00 6e e=e1+t fro1 t$e co4era)e of t$e Mini1u1 ;a)e 2a%< Provided, T$at a00 e1+0o*ees co4ere/ un/er t$e Act s$a00 6e entit0e/ to t$e sa1e 6enefits )i4en to an* re)u0ar e1+0o*ee suc$ as socia0 securit* an/ $ea0t$care 6enefits. Sec. 11. C#edit 4eli;e#'. As state/ in Sec. # u+on t$e a++ro4a0 of t$e Act# t$e 2an/ (an& of t$e P$i0i++ines ,2(P-# t$e De4e0o+1ent (an& of t$e P$i0i++ines ,D(P-# S1a00 (usiness 3uarantee an/ 5inance @or+oration ,S(35@-# an/ Peo+0e7s @re/it an/ 5inance @or+oration ,P@5@- s$a00 set u+ a s+ecia0 cre/it %in/o% t$at %i00 ser4ice t$e financin) nee/s of (M(Es re)istere/ un/er t$e Act consistent %it$ t$e (SP +o0icies# ru0es an/ re)u0ations. T$e 3o4ern1ent Ser4ice Insurance S*ste1 ,3SIS- an/ Socia0 Securit* S*ste1 ,SSS- s$a00 0i&e%ise set u+ a s+ecia0 cre/it %in/o% t$at %i00 ser4e t$e financin) nee/s of t$eir res+ecti4e 1e16ers %$o %is$ to esta60is$ a (M(E. T$e concerne/ financia0 institutions ,5Is- are encoura)e/ to %$o0esa0e t$e fun/s to accre/ite/ +ri4ate financia0 institutions inc0u/in) co11unit*96ase/ or)ani8ations suc$ as coo+erati4es# non9)o4ern1ent or)ani8ations ,N3Os- an/ +eo+0e7s or)ani8ations# %$ic$ %i00 in turn# /irect0* +ro4i/e cre/it su++ort to (M(Es. A00 0oans fro1 %$ate4er sources )rante/ to (M(Es un/er t$e Act s$a00 6e consi/ere/ as +art of a0ternati4e co1+0iance to Presi/entia0 Decree No. !1!# ot$er%ise &no%n as t$e A)ri9A)ra 2a%# or to Re+u60ic Act No. A !!# ot$er%ise &no%n as t$e Ma)na @arta for S1a00 an/ Me/iu1 Enter+rises# as a1en/e/. 5or +ur+oses of co1+0iance %it$ Presi/entia0 Decree No. !1! an/ Re+u60ic Act No. A !!# as a1en/e/# 0oans )rante/ to (M(Es un/er t$e Act s$a00 6e co1+ute/ at t%ice t$e a1ount of t$e face 4a0ue of t$e 0oans. An* e=istin) 0a%s to t$e contrar* not%it$stan/in)# interests# co11issions an/ /iscounts /eri4e/ fro1 t$e 0oans 6* t$e 2(P# D(P# P@5@ an/ S(35@ )rante/ to (M(Es as %e00 as 0oans e=ten/e/ 6* t$e 3SIS an/ SSS to t$eir res+ecti4e 1e16er9 e1+0o*ees un/er t$e Act s$a00 6e e=e1+t fro1 )ross recei+ts ta= ,3RT-. To 1ini1i8e t$e ris&s in 0en/in) to t$e (M(Es# t$e S(35@ an/ t$e Hue/an an/ Rura0 @re/it 3uarantee @or+oration ,HFEDAN@OR- un/er t$e De+art1ent of A)ricu0ture# in case of a)ri6usiness acti4ities# s$a00 set u+ a s+ecia0 )uarantee %in/o% to +ro4i/e t$e necessar* cre/it )uarantee to (M(Es un/er t$eir res+ecti4e )uarantee +ro)ra1s.

T$e 2(P# D(P# P@5@# S(35@# SSS# 3SIS# an/ HFEDAN@OR s$a00 annua00* re+ort to t$e a++ro+riate @o11ittees of 6ot$ Gouses of @on)ress on t$e status of t$e i1+0e1entation of t$is +ro4ision. T$e (SP s$a00 for1u0ate t$e ru0es for t$e i1+0e1entation of t$is +ro4ision an/ s$a00 0i&e%ise esta60is$ incenti4e +ro)ra1s to encoura)e an/ i1+ro4e cre/it /e0i4er* to t$e (M(Es. Sec. 12. Te)"nolog' T#ansfe# /#odu)tion and (anagement T#aining and (a#%eting Assistan)e. (M(Es can a4ai0 of tec$no0o)* transfer# +ro/uction# 1ana)e1ent trainin) +ro)ra1s an/ 1ar&etin) assistance of t$e DTI# DOST# FP9ISSI# @DA# TESDA# T2R@ an/ ot$er concerne/ a)encies. Sec. 13. B(BE 4e;elopment 5und. As state/ in Sec. 10 of t$e Act# a (M(E De4e0o+1ent 5un/ s$a00 6e set u+ %it$ an en/o%1ent of T$ree Gun/re/ Mi00ion Pesos ,P300#000#000.00- fro1 t$e PA3@OR an/ s$a00 6e a/1inistere/ 6* t$e SMED @ounci0. T$e DTI# DOST# FP ISSI# @DA# TESDA# an/ T2R@ 1a* a4ai0 of t$e sai/ 5un/ for tec$no0o)* transfer# +ro/uction an/ 1ana)e1ent trainin) an/ 1ar&etin) assistance to (M(Es. Sec. 1E. T#ade and In;estment /#omotion. 9 T$e /ata )at$ere/ fro1 6usiness re)istration s$a00 6e 1a/e accessi60e to an/ s$a00 6e uti0i8e/ 6* +ri4ate sector or)ani8ations an/ non9)o4ern1ent or)ani8ations for +ur+oses of 6usiness 1atc$in)# tra/e an/ in4est1ent +ro1otion. Sec. 15. !ne<Stop Business Regist#ation Cente#. 23Fs are encoura)e/ to esta60is$ a One9 Sto+ (usiness Re)istration to $an/0e t$e efficient re)istration an/ +rocessin) of +er1itsB0icenses of (M(Es. I3. I15!R(ATI!1 4ISSE(I1ATI!1 Sec. 1A. Info#mation 4issemination. T$e P$i0i++ine Infor1ation A)enc* ,PIA- in coor/ination %it$ t$e concerne/ a)encies ,DO2E# t$e DI23# an/ t$e DTI- s$a00 ensure t$e +ro+er an/ a/e>uate infor1ation /isse1ination of t$e contents an/ 6enefits of t$e Act to t$e )enera0 +u60ic es+ecia00* to its inten/e/ 6eneficiaries in t$e 6aran)a* 0e4e0. 3. /E1A0T2 Sec. 1!. /enalt'. An* +erson %$o s$a00 %i00fu00* 4io0ate an* +ro4ision of t$e Act or %$o s$a00 in an* 1anner co11it an* act to /efeat an* +ro4ision of t$e Act s$a00# u+on con4iction# 6e +unis$e/ 6* a

fine of not 0ess t$an T%ent*9fi4e T$ousan/ Pesos ,P25#000.00- 6ut not 1ore t$an 5ift* T$ousan/ Pesos ,P50#000.00- an/ suffer i1+rison1ent of not 0ess t$an si= ,A- 1ont$s 6ut not 1ore t$an t%o ,2- *ears. In case of non9co1+0iance %it$ t$e +ro4isions of Section a fine of not 0ess t$an 5i4e Gun/re/ T$ousan/ Pesos ,P500#000.00-. 3I. (ISCE00A1E!US /R!3ISI!1S Sec. 1". Annual Repo#t. T$e DI23# DTI# an/ (SP s$a00 su61it Annua0 Re+orts to @on)ress on t$e status of t$e i1+0e1entation of t$e Act. Sec. 1 . Effe)ti;it'. 9 T$ese ru0es s$a00 ta&e effect fifteen ,15- /a*s after its +u60ication in a ne%s+a+er of )enera0 circu0ation. A//R!3E4: 5e6ruar* 2003. (AR R!=AS Secretar* of Tra/e an/ In/ustr* of t$e Act# t$e (SP s$a00 i1+ose

a/1inistrati4e sanctions an/ ot$er +ena0ties on t$e concerne/ )o4ern1ent financia0 institutions# inc0u/in)

B(BE 5o#m -1 Date of A++0ication <_____________ A++0ication No.________ APP2I@ATION 5OR RE3ISTRATION AS (ARAN3AI MI@RO (FSINESS ENTERPRISE FNDER REP. A@T NO. 1!" ,To 6e acco1+0is$e/ in tri+0icate________________________________________ NAME O5 ENTERPRISE
1. a. 6. c. f. Re)istrant7s< __________________________________________________________________________________________ (usiness Na1eBs ____________________________________________________c._____________________________________ Resi/ence A//ress Resi/ence Te0. No. ____________________________________________________ e._____________________________________ (usiness A//ress ,$ea/ Office(usiness Te0. No. ___________________________________________________________________________________________ T*+e of Entit* ,Sin)0e9+ro+rietors$i+B@or+orationB@oo+erati4eBAssociationBOt$er t*+e of entit*

PASSPORT SIKE ID PI@TFRE

). Ta= I/entification No. ________________________________ $. Na1e of ot$er o%ners# if an* Na1e Nationa0it* A//ress

2.

(usiness @0assification< Ne% E=istin)

3. AssetsB2ia6i0ities ,To t$e nearest T$ousan/ PesosAssetsJ Va0ue ,in Pesos2ia6i0ities Va0ue ,in Pesos-

Tota0

Tota0

J5or t$e +ur+ose of e=e1+tion fro1 ta=es an/ fees un/er RA 1!"# t$e ter1 'assets. s$a00 1ean a00 &in/s of +ro+erties# rea0 or +ersona0# o%ne/ an/Bor use/ 6* t$e (M(E for t$e con/uct of its 6usiness.

Net%ort$ ,Tota0 Assets 0ess Tota0 2ia6i0ities- ________________________________________ ,P0ease use a//itiona0 s$eet if necessar* or +resent /ocu1ents if necessar*-. E. Tota0 Nu16er of E1+0o*ees ________ Per1anent ________ No. of e1+0o*ees re)istere/ %it$ SSS_________ Iear Esta60is$e/ ____________ No. of contractua0 e1+0o*ees +er *ear _______ No. of e1+0o*ees re)istere/ %it$ P$i0$ea0t$ _______

5. Princi+a0 (usiness Acti4it*BPro/ucts Processe/BPro/uce/ _______________________________________________________ __________________________________________________________________________________________________ ___

A. (ranc$ Offices ,if an*A//ressBes Te0.No.

Please use additional forms/sheets, if necessary. I hereby certify that all foregoing statements are true to the best of my knowledge and belief. ________________________________________ Applicants/Authorized epresentati!es signature

epublic of the Philippines" " s.s. #$%#& I%'( A)( #*+ ) to me this ___ day of ______ ,--__, affiant e.hibited to me his/her es. &ert. )o. ________ issued at _________ on ____,--____. )otary Public/Adm. +fficer $ntil (ecember /0 ______ (oc. )o. ___ Page )o. ___ %ook )o. ___ #eries of ,--_

"

%1%' 2orm -, %1%' egistration )o. _______

epublic of the Philippines

__________________________________________ 3&ity/1unicipality"

&' 4I2I&A4' +2 A$45+ I46

3 egistered %arangay 1icro %usiness 'nterprise"

4his certificate, which is !alid for two 3," years, entitles the registered %arangay 1icro %usiness 'nterprise 3%1%'" to all the benefits and incenti!es, sub7ect to the terms and conditions, of epublic Act )o. 809:, signed by President ;loria 1acapagal Arroyo on 0/ )o!ember ,--,, and the Implementing guidelines, rules and regulations thereof issued by #ecretary of 4rade and Industry 1ar o.as on__________________. 4his certificate shall e.pire on _____________.
;ranted to<

______________________________________ )ame of 'nterprise +wner/s<__________________________________________________________ _________ Address< _________________________________________________________________ __ _________________________________________________________________ __________ I) 4'#4I1+)6 *5' '+2, I ha!e set my hand and caused the seal of the 1unicipality/ &ity to be affi.ed at _______________________________________________ 4his ____ day of ____________ in the year of our =ord, twenty hundred and ____. ______________________ &ity/1unicipal 4reasurer Attested<

_______________________ 1ayor

10

&ongress of the Philippines 4welfth &ongress Second Regular Session RE/UB0IC ACT 1!. 9178 A1 ACT T! /R!(!TE T>E ESTAB0IS>(E1T !5 BARA16A2 (ICR! BUSI1ESS E1TER/RISES *B(BEs+ /R!3I4I16 I1CE1TI3ES A14 BE1E5ITS T>ERE5!R A14 5!R !T>ER /UR/!SES Be it enacted by the Senate and House of Representatives of the Philippines in Congress assembled: /RE0I(I1AR2 /R!3ISI!1S SE@. 1. Short Title. : T$is Act s$a00 6e &no%n as t$e '(aran)a* Micro (usiness Enter+rises ,(M(Es- Act of 2002.. SE@. 2. eclaration of Policy. 9 It is $ere6* /ec0are/ to 6e t$e +o0ic* of t$e State to $asten t$e countr*7s econo1ic /e4e0o+1ent 6* encoura)in) t$e for1ation an/ )ro%t$ of 6aran)a* 1icro 6usiness enter+rises %$ic$ effecti4e0* ser4e as see/6e/s of 5i0i+ino entre+reneuria0 ta0ents# an/ inte)ratin) t$ose in t$e infor1a0 sector %it$ t$e 1ainstrea1 econo1*# t$rou)$ t$e rationa0i8ation of 6ureaucratic restrictions# t$e acti4e inter4ention of t$e )o4ern1ent s+ecia00* in t$e 0oca0 0e4e0# an/ t$e )rantin) of incenti4es an/ 6enefits to )enerate 1uc$9nee/e/ e1+0o*1ent an/ a00e4iate +o4ert*. SE@. 3. efinition of Terms. : As use/ in t$e Act# t$e fo00o%in) ter1s s$a00 1ean<

,a- '(aran)a* Micro (usiness Enter+rise#. $ereinafter referre/ to as (M(E# refers to an* 6usiness entit* or enter+rise en)a)e/ in t$e +ro/uction# +rocessin) or 1anufacturin) of +ro/ucts or co11o/ities# inc0u/in) a)ro9+rocessin)# tra/in) an/ ser4ices# %$ose tota0 assets inc0u/in) t$ose arisin) fro1 0oans 6ut e=c0usi4e of t$e 0an/ on %$ic$ t$e +articu0ar 6usiness entit*7s office# +0ant an/ e>ui+1ent are situate/# s$a00 not 6e 1ore t$an T$ree Mi00ion Pesos ,P3#000#000.00-. T$e a6o4e /efinition s$a00 6e su6?ect to re4ie% an/ u+%ar/ a/?ust1ent 6* t$e SMED @ounci0# as 1an/ate/ un/er Re+u60ic Act No. A !!# as a1en/e/ 6* Re+u60ic Act No. "2" . 5or t$e +ur+ose of t$e Act# 'ser4ices. s$a00 e=c0u/e t$ose ren/ere/ 6* an* one# %$o is /u0* 0icense/ 6* t$e )o4ern1ent after $a4in) +asse/ a )o4ern1ent 0icensure e=a1ination# in connection %it$ t$e e=ercise of one7s +rofession. ,6- '@ertificate of Aut$orit*. is t$e certificate issue/ )rantin) t$e aut$orit* to t$e re)istere/ (M(E to o+erate an/ 6e entit0e/ to t$e 6enefits an/ +ri4i0e)es accor/e/ t$ereto. ,c.-'Assets. refers to a00 &in/s of +ro+erties# rea0 or +ersona0# o%ne/ 6* t$e (M(E an/ use/ for t$e con/uct of its 6usiness as /efine/ 6* t$e SMED @ounci0< Provided, T$at for t$e +ur+ose of e=e1+tion fro1 ta=es an/ fees un/er t$e Act# t$is ter1 s$a00 1ean a00 &in/s of +ro+erties# rea0 or +ersona0# o%ne/ an/Bor use/ 6* t$e (M(E for t$e con/uct of its 6usiness as /efine/ 6* t$e SMED @ounci0. ,/- 'Re)istration. refers to t$e inc0usion of (M(E in t$e (M(E Re)istr* of a cit* or 1unici+a0it*. ,e- '5inancin). refers to a00 6orro%in)s of t$e (M(E fro1 a00 sources after re)istration. RE6ISTRATI!1 A14 !/ERATI!1 !5 B(BEs SE@. E. Registration and !ees. 9 T$e Office of t$e Treasurer of eac$ cit* or 1unici+a0it* s$a00 re)ister t$e (M(Es an/ issue a @ertificate of Aut$orit* to ena60e t$e (M(E to a4ai0 of t$e 6enefits un/er t$e Act. An* suc$ a++0ication s$a00 6e +rocesse/ %it$in fifteen ,15- %or&in) /a*s u+on su61ission of co1+0ete /ocu1ents. Ot$er%ise# t$e (M(Es s$a00 6e /ee1e/ re)istere/. T$e Munici+a0 or @it* Ma*or 1a* a++oint a (M(E Re)istration Officer %$o s$a00 6e un/er t$e Office of t$e Treasurer. 2oca0 )o4ern1ent units ,23Fs- are encoura)e/ to esta60is$ a One9Sto+9(usiness Re)istration @enter to $an/0e t$e efficient re)istration an/ +rocessin) of +er1itsB0icenses of (M(Es. 2i&e%ise# 23Fs s$a00 1a&e a +erio/ic e4a0uation of t$e (M(Es7 financia0 status for 1onitorin) an/ re+ortin) +ur+oses. T$e 23Fs s$a00 issue t$e @ertificate of Aut$orit* +ro1+t0* an/ free of c$ar)e. Go%e4er# to /efra* t$e a/1inistrati4e costs of re)isterin) an/ 1onitorin) t$e (M(Es# t$e 23Fs 1a* c$ar)e a fee not e=cee/in) One T$ousan/ Pesos ,P1#000.00-. T$e @ertificate of Aut$orit* s$a00 6e effecti4e for a +erio/ of t%o ,2- *ears# rene%a60e for a +erio/ of t%o ,2- *ears for e4er* rene%a0. As 1uc$ as +ossi60e# (M(Es s$a00 6e su6?ect to 1ini1a0 6ureaucratic re>uire1ents an/ reasona60e fees an/ c$ar)es. SE@. 5 "ho are #ligible to Register. : An* +erson# natura0 or ?uri/ica0# or coo+erati4e# or association# $a4in) t$e >ua0ifications as /efine/ in Section 3,a- $ereof 1a* a++0* for re)istration as (M(E.

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SE@. A. Transfer of $%nership. : T$e (M(E s$a00 re+ort to t$e cit* or 1unici+a0it* of an* c$an)e in t$e status of its o%ners$i+ structure# an/ s$a00 surren/er t$e ori)ina0 co+* of t$e (M(E @ertificate of Aut$orit* for notation of t$e transfer. I1CE1TI3ES A14 BE1E5ITS SE@. !. #&emption from Ta&es and !ees. 9 A00 (M(Es s$a00 6e e=e1+t fro1 inco1e ta= for inco1e arisin) fro1 t$e o+erations of t$e enter+rise. T$e 23Fs are encoura)e/ eit$er to re/uce t$e a1ount of 0oca0 ta=es# fees an/ c$ar)es i1+ose/ or to e=e1+t t$e (M(Es fro1 0oca0 ta=es# fees an/ c$ar)es. SE@. ". #&emption from the Coverage of the 'inimum "age (a%. 9 T$e (M(Es s$a00 6e e=e1+t fro1 t$e co4era)e of t$e Mini1u1 ;a)e 2a%< Provided# T$at a00 e1+0o*ees co4ere/ un/er t$e Act s$a00 6e entit0e/ to t$e sa1e 6enefits )i4en to an* re)u0ar e1+0o*ee suc$ as socia0 securit* an/ $ea0t$care 6enefits. SE@. . Credit elivery. 9 F+on t$e a++ro4a0 of t$e Act# t$e 2an/ (an& of t$e P$i0i++ines ,2(P-# t$e De4e0o+1ent (an& of t$e P$i0i++ines ,D(P-# t$e S1a00 (usiness 3uarantee an/ 5inance @or+oration ,S(35@-# an/ t$e Peo+0e7s @re/it an/ 5inance @or+oration ,P@5@- s$a00 set u+ a s+ecia0 cre/it %in/o% t$at %i00 ser4ice t$e financin) nee/s of (M(Es re)istere/ un/er t$e Act consistent %it$ t$e (an)&o Sentra0 n) Pi0i+inas ,(SP- +o0icies# ru0es an/ re)u0ations. T$e 3o4ern1ent Ser4ice Insurance S*ste1 ,3SIS- an/ Socia0 Securit* S*ste1 ,SSS- s$a00 0i&e%ise set u+ a s+ecia0 cre/it %in/o% t$at %i00 ser4e t$e financin) nee/s of t$eir res+ecti4e 1e16ers %$o %is$ to esta60is$ a (M(E. T$e concerne/ financia0 institutions ,5Is- are encoura)e/ to %$o0esa0e t$e fun/s to accre/ite/ +ri4ate financia0 institutions inc0u/in) co11unit*96ase/ or)ani8ations suc$ as cre/it# coo+erati4es# non9)o4ern1ent or)ani8ations ,N3Os- an/ +eo+0e7s or)ani8ations# %$ic$ %i00 in turn# /irect0* +ro4i/e cre/it su++ort to (M(Es. A00 0oans fro1 %$ate4er sources )rante/ to (M(Es un/er t$e Act s$a00 6e consi/ere/ as +art of a0ternati4e co1+0iance to Presi/entia0 Decree No. !1!# ot$er%ise &no%n as t$e A)ri9A)ra 2a%# or to Re+u60ic Act No. A !!# &no%n as t$e Ma)na @arta for S1a00 an/ Me/iu1 Enter+rises# as a1en/e/. 5or +ur+oses of co1+0iance %it$ Presi/entia0 Decree No. !1! an/ Re+u60ic Act No. A !!# as a1en/e/# 0oans )rante/ to (M(Es un/er t$is Act s$a00 6e co1+ute/ at t%ice t$e a1ount of t$e face 4a0ue of t$e 0oans. An* e=istin) 0a%s to t$e contrar* not%it$stan/in)# interests# co11issions an/ /iscounts /eri4e/ fro1 t$e 0oans 6* t$e 2(P# D(P# P@5@ an/ S(35@ )rante/ to (M(Es as %e00 as 0oans e=ten/e/ 6* t$e 3SIS an/ SSS to t$eir res+ecti4e 1e16er9 e1+0o*ees un/er t$e Act s$a00 6e e=e1+t fro1 )ross recei+ts ta= ,3RT-. To 1ini1i8e t$e ris&s in 0en/in) to t$e ((Es# t$e S(35@ an/ t$e Hue/an an/ Rura0 @re/it 3uarantee @or+oration ,HFEDAN@OR- un/er t$e De+art1ent of A)ricu0ture# in case of a)ri6usiness acti4ities# s$a00 set u+ a s+ecia0 )uarantee %in/o% to +ro4i/e t$e necessar* cre/it )uarantee to (M(Es un/er t$eir res+ecti4e )uarantee +ro)ra1s. T$e 2(P# D(P# P@5@# S(35@# SSS# 3SIS# an/ HFEDAN@OR s$a00 annua00* re+ort to t$e a++ro+riate @o11ittees of 6ot$ Gouses of @on)ress on t$e status of t$e i1+0e1entation of t$is +ro4ision. T$e (SP s$a00 for1u0ate t$e ru0es for t$e i1+0e1entation of t$is +ro4ision an/ s$a00 0i&e%ise esta60is$ incenti4e +ro)ra1s to encoura)e an/ i1+ro4e cre/it /e0i4er* to t$e (M(Es. SE@. 10. Technology Transfer, Production and 'anagement Training, and 'ar)eting *ssistance. 9 A (M(E De4e0o+1ent 5un/ s$a00 6e set u+ %it$ an en/o%1ent of T$ree Gun/re/ Mi00ion Pesos ,P300#000#000.00- fro1 t$e P$i0i++ine A1use1ent an/ 3a1in) @or+oration ,PA3@OR- an/ s$a00 6e a/1inistere/ 6* t$e SMED @ounci0. T$e De+art1ent of Tra/e an/ In/ustr* ,DTI-# t$e De+art1ent of Science an/ Tec$no0o)* ,DOST-# t$e Fni4ersit* of t$e P$i0i++ines Institute for S1a00 Sca0e In/ustries ,FP ISSI-# @oo+erati4e De4e0o+1ent Aut$orit* ,@DA-# Tec$nica0 E/ucation an/ S&i00s De4e0o+1ent Aut$orit* ,TESDA-# an/ Tec$no0o)* an/ 2i4e0i$oo/ Resource @enter ,T2R@- 1a* a4ai0 of t$e sai/ 5un/ for tec$no0o)* transfer# +ro/uction an/ 1ana)e1ent trainin) an/ 1ar&etin) assistance to (M(Es. T$e DTI# in coor/ination %it$ t$e +ri4ate sector an/ non9)o4ern1ent or)ani8ations ,N3Os-# s$a00 e=+0ore t$e +ossi6i0ities of 0in&in) or 1atc$in)9u+ (M(Es %it$ s1a00# 1e/iu1 an/ 0ar)e enter+rises# an/ 0i&e%ise esta60is$ incenti4es t$erefor. T$e DTI# in 6e$a0f of t$e DOST# FP ISSI# @DA# TESDA an/ T2R@ s$a00 6e re>uire/ to furnis$ t$e a++ro+riate @o11ittees of 6ot$ Gouses of @on)ress a *ear0* re+ort on t$e /e4e0o+1ent an/ acco1+0is$1ents of t$eir +ro?ects an/ +ro)ra1s in re0ation to tec$no0o)* transfer# +ro/uction an/ 1ana)e1ent trainin) an/ 1ar&etin) assistance e=ten/e/ to (M(Es.

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SE@. 11. Trade and +nvestment Promotion. 9 T$e /ata )at$ere/ fro1 6usiness re)istration s$a00 6e 1a/e accessi60e to an/ s$a00 6e uti0i8e/ 6* +ri4ate sector or)ani8ations an/ non9)o4ern1ent or)ani8ations for +ur+oses of 6usiness 1atc$in)# tra/e an/ in4est1ent +ro1otion. I15!R(ATI!1 4ISSE(I1ATI!1 SE@. 12. +nformation issemination. 9 T$e P$i0i++ine Infor1ation A)enc* ,PIA-# in coor/ination %it$ t$e De+art1ent of 2a6or an/ E1+0o*1ent ,DO2E-# t$e DI23 an/ t$e DTI# s$a00 ensure t$e +ro+er an/ a/e>uate infor1ation /isse1ination of t$e contents an/ 6enefits of t$e Act to t$e )enera0 +u60ic es+ecia00* to its inten/e/ 6eneficiaries s+ecifica00* in t$e 6aran)a* 0e4e0. /E1A0T2 SE@. 13. Penalty. 9 An* +erson %$o s$a00 %i00fu00* 4io0ate an* +ro4ision of t$e Act or %$o s$a00 in an* 1anner co11it an* act to /efeat an* +ro4ision of t$e Act s$a00# u+on con4iction# 6e +unis$e/ 6* a fine of not 0ess t$an T%ent*9fi4e T$ousan/ Pesos ,P25#000.00- 6ut not 1ore t$an 5ift* T$ousan/ Pesos ,P50#000.00- an/ suffer i1+rison1ent of not 0ess t$an si= ,A1ont$s 6ut not 1ore t$an t%o ,2- *ears. In case of non9co1+0iance %it$ t$e +ro4isions of Section of t$e Act# t$e (SP s$a00 i1+ose a/1inistrati4e sanctions an/ ot$er +ena0ties on t$e concerne/ )o4ern1ent financia0 institutions# inc0u/in) a fine of not 0ess t$an 5i4e Gun/re/ T$ousan/ Pesos ,P500#000.00-. (ISCE00A1E!US /R!3ISI!1S SE@. 1E. *nnual Report. 9 T$e DI23# DTI# an/ (SP s$a00 su61it an annua0 re+ort to t$e @on)ress on t$e status of t$e i1+0e1entation of t$e Act. SE@. 15. +mplementing Rules and Regulations. 9 T$e Secretar* of t$e De+art1ent of Tra/e an/ In/ustr*# in consu0tation %it$ t$e Secretaries of t$e DI23# DO5# an/ t$e (SP 3o4ernor s$a00 for1u0ate t$e necessar* ru0es an/ re)u0ations to i1+0e1ent t$e +ro4isions of t$e Act %it$in ninet* , 0- /a*s after its a++ro4a0. T$e ru0es an/ re)u0ations issue/ +ursuant to t$is section s$a00 ta&e effect fifteen ,15- /a*s after its +u60ication in a ne%s+a+er of )enera0 circu0ation. SE@. 1A. Separability Clause. 9 : If an* +ro4ision or +art $ereof# is $e0/ in4a0i/ or unconstitutiona0# t$e re1ain/er of t$e 0a% or t$e +ro4ision not ot$er%ise affecte/ s$a00 re1ain 4a0i/ an/ su6sistin). SE@.1!. Repealing Clause. 9 E=istin) 0a%s# +resi/entia0 /ecrees# e=ecuti4e or/ers# +roc0a1ations or a/1inistrati4e re)u0ations t$at are inconsistent %it$ t$e +ro4isions of t$e Act are $ere6* a1en/e/# 1o/ifie/# su+erse/e/ or re+ea0e/ accor/in)0*. SE@. 1". #ffectivity. 9 T$e Act s$a00 ta&e effect fifteen ,15- /a*s after its +u60ication in t$e $fficial ,a-ette or in at 0east t%o ,2- ne%s+a+ers of )enera0 circu0ation. A++ro4e/# ,S)/.- LOSE DE VENE@IA LR. Spea)er of the House of Representative ,S)/.- 5RANM2IN M. DRI2ON President of the Senate

T$is Act# %$ic$ is a conso0i/ation of Senate (i00 No. 1"55 an/ Gouse (i00 No. E"!1 %as fina00* +asse/ 6* t$e Senate an/ t$e Gouse of Re+resentati4es on Octo6er 2E# 2002 an/ Octo6er 23# 2002# res+ecti4e0*. ,S)/.- RO(ERTO P. NAKARENO Secretary ,eneral House of Representatives A++ro4e/< No4e16er 13# 2002 *Sgd.+ 60!RIA (ACA/A6A0<ARR!2! President of the Philippines ,S)/.- OS@AR 3. IA(ES Secretary of the Senate

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