COMPARATIVE COMMERCIAL

LAWS

In Philippine Jurisdiction with

Domestic Application of the Legal
System
By: Atty. Antonio A. Ligon, CPA
Business Structures
 Sole Proprietorship -----

 Partnerships
Corporations :
 Sole Proprietorship

 business is considered to be an extension of

yourself.
 Therefore, you are personally responsible for
all the liabilities and obligations your
business incurs.
 Governing Law:
Civil and Criminal Laws
Taxation and Labor Laws
Partnership :
 “By the contract of partnership two or
more persons bind themselves to
contribute money, property, or industry to
a common fund, with the intention of
dividing the profits among themselves.
 Two or more persons may also form a
partnership for the exercise of a
profession.”
 Corporation
 A "corporation" is treated as an
artificial being created by operation
of law, having the right of succession
and the powers, attributes and
properties expressly authorized by
law or incident to its existence
Differences:
Partnerships Corporation
 STRONGER Legal
Legal personality Personality
Personal Liability  Limited Liability
Every Partner – an  ONLY the Board
agent of the of Directors bind
Partnership the Corporation
Corporation, how organized:
 Number of incorporators:
Incorporators are required to be not
less than five [5] but not more than
fifteen [15]
 Residency requirement:
Majority of the incorporators are
required to be residents of the
Philippines.
 Qualifications:
All incorporators:
[1] must be natural persons
[2] must be of legal age ( 18 )
Corporation, limitation on
foreign equity holdings:

 Foreigners may invest as much as one

hundred percent [100%] equity in areas
not covered by the Negative List under
the Foreign Investments Act.
Investment Negative Lists
No foreign participation is allowed in :
 mass media
 most licensed professional services (e.g.
accountants, lawyers, engineers)
 retail trade
 cooperatives
 private security agencies
 small-scale mining
 fisheries
 rice and corn farming
25% foreign equity is allowed
in :

 recruitment agencies
 locally funded public works
projects
30% foreign equity is allowed
in :
 40% foreign equity is allowed in :

 resources development and

utilization
 land ownership
 public utilities
 educational institutions
 financing companies
 construction
General Procedure :

1. Registration:
Identity and Charter -
Securities & Exchange
Commission (SEC)
2. For Taxation Purposes

 VAT Registration

 Payment of documentary stamp taxes

 Apply for an authority to print

receipt/invoices with the Bureau of
Internal Revenue (BIR)
 3. For Employer-Employees
Welfare

 Register with the Social Security System

(SSS)
 Register with Philippines Health Insurance
Company (PHIC)
 4. For local government

 Apply for a Community Tax

Certificate (CTC)
 Obtain a Barangay or district
clearance
 Apply for a Mayor’s Permit
 5. For Intellectual Property
Protection:

 Registration with
Intellectual Property Office(IPO)
Significant features
On inventions :
 “First to file” rather than first to invent
 Grant of 20 years
On Trademark:
 the element of use has been eliminated as a
requirement for application.
 the term is for 10 years, renewable for 10-year
periods.
 penalties for infringement, unfair competition, false
designation of origin and false description or
representation, the penalties range from fine of
PhP50,000 to PhP200,000 and/or 2 to 5 years of
imprisonment.
 Intellectual Property Rights:
1. Copyright and related rights;
2. Trademarks and service
marks;
3. Geographic indications;
4. Industrial designs;
5. Patents;
6. Layout designs [topographies]
of integrated circuits;
7. Protection of undisclosed
information.
PHILIPPINE CIVIL CODE PROVISIONS ON
FOREIGN LAWS

 “The forms and solemnities of contracts,

wills, and other public instruments shall
be governed by the laws of the country in
which they are executed.
 In matters which are governed by the
Code of Commerce and special laws, their
deficiency shall be supplied by the
provisions of this Codeed.”
Judicial System :
Settlement of Disputes for
Business Organizations
 Hierarchy of Courts:
Corporate and other Legal Claims:

SUPREME COURT

COURT OF APPEALS

Regional Trial Court

 Tax Issues:

SUPREME COURT

COURT OF TAX APPEALS

Bureau of Internal Revenue

Employer-employee issues
SUPREME COURT

COURT OF APPEALS

NATIONAL LABOR RELATIONS

COMMISSION

Labor Arbiter
Department of Trade and Industry (DTI)

 For investment incentives

and Consumer protection
 Bureau of Food and Drugs (BFAD)

 For protection of public health and

ensure safety, purity and quality of
Food, Drug, Cosmetics and other
products
THANK YOU!