In the Philippines, verifying the legitimacy of a corporation is a critical step in due diligence, whether for investment, employment, or a high-value transaction. Business registration is not a single document but a hierarchy of certifications from various government agencies.
1. Primary Registration: The Securities and Exchange Commission (SEC)
The Securities and Exchange Commission is the primary regulator for all corporations and partnerships in the Philippines. A "Department of Trade and Industry" (DTI) registration is for sole proprietorships only; if an entity claims to be a "Corp." or "Inc.," it must have SEC records.
How to Verify:
- Certificate of Incorporation: Ask for a copy of the Certificate of Incorporation. It should contain a Company Registration Number.
- SEC Check App/Online Portal: Use the SEC’s official online company search (SEC Express System) to check if the company name exists in their database.
- Articles of Incorporation & Bylaws: These documents detail the corporation's purpose, primary address, and the names of the original incorporators.
- General Information Sheet (GIS): This is the most important document for verification. It is filed annually and lists the current directors, officers, and stockholders. If a company cannot provide a GIS from the previous year, it may be delinquent or non-operational.
2. Tax Compliance: Bureau of Internal Revenue (BIR)
Even if a company is registered with the SEC, it is not legally allowed to commence business operations until it is registered with the BIR.
How to Verify:
- Certificate of Registration (Form 2303): This blue-bordered document lists the company's Tax Identification Number (TIN), the types of taxes it is liable for, and its registered address.
- Official Receipts (ORs) and Invoices: Check if the receipts issued by the company are BIR-registered. Valid receipts will have an "Authority to Print" (ATP) notice at the bottom.
3. Local Government Units (LGU): The Mayor’s Permit
A corporation must have the authority to operate in the specific city or municipality where its office is located.
How to Verify:
- Business Permit (Mayor’s Permit): This is usually displayed prominently in the company’s physical office. It must be renewed annually (typically by January 20th).
- Sanitary and Fire Safety Permits: These are prerequisites for the Mayor’s Permit and ensure the physical office complies with safety standards.
4. Secondary Licenses for Regulated Industries
Certain industries require more than just basic registration. If a corporation engages in specific activities, it must hold a Secondary License.
| Industry | Regulating Agency |
|---|---|
| Banks, Remittance, Pawnshops | Bangko Sentral ng Pilipinas (BSP) |
| Real Estate Developers | Department of Human Settlements and Urban Development (DHSUD) |
| Lending/Financing Companies | SEC (Certificate of Authority to Operate) |
| Recruitment/Manpower | Department of Migrant Workers (DMW) or DOLE |
| Food and Drugs | Food and Drug Administration (FDA) |
Note: A corporation might have an SEC registration but lack the Secondary License to solicit investments or sell real estate. Operating without a secondary license when required is illegal.
5. Mandatory Employer Contributions
To ensure the corporation is a legitimate employer, verify its registration with the "social "quad" of Philippine agencies:
- SSS (Social Security System)
- PhilHealth (Philippine Health Insurance Corporation)
- Pag-IBIG (Home Development Mutual Fund)
- DOLE (Department of Labor and Employment) – Specifically for compliance with labor standards.
6. Red Flags to Watch For
- The "Pending" Excuse: If a company claims its registration is "in process" for several months, it is likely operating illegally.
- Address Mismatch: The address on the SEC registration should match the physical office and the BIR Form 2303.
- Inconsistency in Purpose: Check the "Primary Purpose" in the Articles of Incorporation. If a company is registered as a "Trading" firm but is soliciting investments like a "Financing" firm, it is violating its charter.
- No SEC GIS: Legitimate corporations consistently file their General Information Sheets. A gap of several years suggests the company is "Revoked" or "Suspended" by the SEC.