If you’re thinking about going into business for yourself as an online seller, you may have come across the term “sole proprietor“. It’s not really something you hear people say a lot, even if they are business owners or sole proprietors themselves, so allow us to make understanding what this is—and how you can apply for it—just a little bit easier.
Who is a sole proprietor?
Anybody who owns a business is a sole proprietor, and under the law, the business owner and the business are one and the same entity. This means that if the business owes money to, let’s say, a supplier, the business owner owes that supplier. It’s very different from a corporation, where the owners of a corporation aren’t personally responsible for the business’ debts.
How do I become a sole proprietor?
So, let’s say you want to open up an online shop. Here’s what you’ll have to do:
- Register with the Department of Trade and Industry or DTI. You can find out how, here.
- When you register with the DTI, you’re going to need a name for your business. You can find out how, here. You’ll need to make sure no one else is using your business name, though, so you can find out whether the name you have in mind is unique, here.
- Once you have your business name, follow these steps to finish your registration with the DTI:
Step 1: Identify your business coverage
Step 2: Enter your preferred business name.
Step 3: Enter your details and address
Step 4: Select the payment method that suites you best
Step 5: See your certification
Be sure to keep a copy of your Transaction Reference Number or TRN—you’re going to need it for online payments.
You may be asked to comply with additional requirements for your business registration. Submit these within 15 business days to avoid starting from scratch.
- Get your business permit from the city or municipality where your business will operate, or where you live if your business is online. You can find out how to get one, here.
- Register your TIN with the Bureau of Internal Revenue. You can find out how to do that, here.
- Register your business with these government agencies:
- Social Security System (SSS)
- Department of Labor and Employment (DOLE) (if you have 5 or more employees)
- Department of Environment and Natural Resources (DENR) (if you’re a log or lumber dealer)
Do you need help with registering as a sole proprietor? Ask an accountant from one of our Partner Firms, today.