In a marketplace increasingly populated by digital startups and investment opportunities, the importance of "due diligence" cannot be overstated. Engaging with an unregistered or fraudulent entity in the Philippines carries significant risks, ranging from financial loss to legal complications.

This guide outlines the mandatory verification steps for confirming whether a business is legally authorized to operate within the Philippine jurisdiction.

1. The Hierarchy of Registration

The type of legal entity dictates where its primary records are held. In the Philippines, business structures generally fall into two categories:

Sole Proprietorships: Owned by a single individual. These must be registered with the Department of Trade and Industry (DTI).
Corporations and Partnerships: Entities with a separate legal personality from their owners. These must be registered with the Securities and Exchange Commission (SEC).

2. Verifying Corporations & Partnerships (SEC)

The SEC is the primary regulator for corporate entities. Just because a company has a fancy website does not mean it is a registered corporation.

Check the SEC Express System: You can verify a company’s status through the SEC Check App or the official SEC website’s search portal.
Articles of Incorporation: A legitimate corporation will have a Certificate of Registration and Articles of Incorporation. These documents specify the "Primary Purpose" of the company.
The "Investment" Red Flag: This is the most critical distinction. A standard SEC Registration does not give a company the right to solicit investments from the public. To do that, the company must possess a secondary license called a Certificate of Permit to Offer and Sell Securities.

Legal Tip: Always cross-reference the SEC’s "Advisories" page. The Commission regularly publishes lists of entities flagged for unauthorized investment solicitation or "Ponzi" schemes.

3. Verifying Sole Proprietorships (DTI)

If an individual is doing business under a name other than their own (e.g., "Juan’s Sari-Sari Store"), they must register that "Business Name" (BN) with the DTI.

DTI Business Name Search: Use the DTI BNRS (Business Name Registration System) online portal. You can search by the business name, owner name, or keywords.
Scope of Validity: DTI registrations have a specific scope (Barangay, City/Municipality, Regional, or National). Ensure the business is operating within its registered scope.
Note on Authority: A DTI certificate is merely a registration of a name. It is not a license to perform professional services (like law or medicine) or specialized regulated activities (like banking).

4. Local Government Unit (LGU) Verification

Even if a business is registered with the SEC or DTI, it cannot legally operate at a specific physical location without a Mayor’s Permit (Business Permit).

The Business Permit Office: You can visit or contact the Business Permit and Licensing Office (BPLO) of the city or municipality where the business claims to be located.
Display Requirement: Under most local ordinances, businesses are legally required to display their original Mayor's Permit and current year's "Validation Sticker" in a conspicuous place within their office or store.

5. Tax Compliance (BIR Verification)

A legitimate business must be a registered taxpayer.

Certificate of Registration (BIR Form 2303): This document shows the business's Taxpayer Identification Number (TIN) and the types of taxes it is required to pay.
Official Receipts (OR): Check if the business issues BIR-registered receipts or invoices. Legitimate receipts will have "Authority to Print" (ATP) details at the bottom.

6. Red Flags: When to Walk Away

If you encounter the following, exercise extreme caution:

Refusal to Show Documents: If a business claims their SEC/DTI papers are "confidential" or "at the main office," it is likely a scam. These are public records.
Mismatched Names: The name on the SEC/DTI certificate should match the name on the bank account you are asked to deposit money into.
High Returns, Low Risk: In the Philippines, any entity promising "guaranteed" high monthly returns is likely an illegal investment scheme, regardless of their SEC registration.
No Physical Office: Legitimate corporations must have a registered principal office address. Be wary of businesses that operate solely via Telegram, WhatsApp, or Facebook without a verifiable address.

Summary Checklist

Document	Issuing Agency	Purpose
SEC Certificate	Securities & Exchange Commission	Proof of Corporate existence.
DTI Certificate	Dept. of Trade & Industry	Proof of Business Name for sole proprietors.
Mayor's Permit	Local Government (LGU)	Permission to operate in a specific city.
BIR Form 2303	Bureau of Internal Revenue	Proof of Tax Registration.

Would you like me to draft a formal letter of inquiry that you can send to a company to request their registration documents for due diligence purposes?