I. Overview

Verifying whether a Philippine business is properly registered and permitted involves two parallel tracks:

Labor compliance with the Department of Labor and Employment (DOLE)—primarily the establishment registration (often referred to as “Rule 1020”) and, where applicable, specialty registrations (e.g., DOLE registration of contractors/subcontractors).
Business legality and tax compliance—core registrations with the SEC/DTI, LGU (Mayor’s/Business Permit + Barangay), and BIR, plus any industry-specific (secondary) licenses.

This article explains the legal bases, what documents to ask for, how and where to verify, red flags, and model clauses/checklists you can use in procurement, vendor onboarding, lending, or M&A due diligence.

II. DOLE Compliance: What It Is and Why It Matters

A. Legal Bases (Key References)

Labor Code of the Philippines and implementing regulations.
Occupational Safety and Health (OSH) Law (R.A. 11058) and DOLE D.O. 198-18 (its IRR).
Philippine OSH Standards, including Rule 1020 (establishment registration with DOLE).
DOLE Department Order No. 174-17 (for contractors/subcontractors providing services to principals).
Labor Laws Compliance System (LLCS) framework (labor inspections and compliance certificates).

B. Core DOLE Registrations & Evidence

Establishment Registration (Rule 1020)
- Who: All establishments with employees must register with the DOLE Regional/Field Office having jurisdiction over the workplace within 30 calendar days from start of operations.
- Evidence to Request:
  - Rule 1020 Certificate / acknowledgment showing the DOLE-assigned Establishment Number, business name, address, nature of business, and date filed/approved.
  - Proof of reporting updates (e.g., for changes in address, ownership, nature of business).
Contractor/Subcontractor Registration (D.O. 174-17) — if the company renders services to a principal (e.g., manpower, janitorial, security, process outsourcing).
- Who: Legitimate job contractors/subcontractors must be registered with DOLE and renew registration every two years.
- Evidence to Request:
  - DOLE Certificate/Letter of Registration (indicating validity dates, DOLE Regional Office).
  - List of tools, equipment, assets, proof of capitalization, and service agreements (as part of compliance).
- Note: D.O. 174 does not legalize “labor-only contracting”; registration is necessary but not sufficient to prove legitimacy—substance of arrangements still governs.
Certificates of Compliance (COCs)
- DOLE may issue COCs for compliance with General Labor Standards (GLS) and OSH following inspections.
- Evidence: Copies of COCs, notices of results, and abatement/compliance reports (if any).
Other DOLE-Related Proofs (contextual)
- OSH documents: Safety programs, appointment of Safety Officer(s), first-aider certifications, Health and Safety Committee minutes, accident/illness logs.
- Minimum wage and benefits compliance records, company handbook, proof of SSS/PhilHealth/HDMF (Pag-IBIG) remittances (while not DOLE registrations, they are labor compliance indicators).
- Alien Employment Permits (AEPs) from DOLE for foreign employees in roles that require them.

C. How to Verify DOLE Compliance

Documentary Check (from the company)
- Ask for clear copies of:
  - Rule 1020 Certificate (or online acknowledgment).
  - DOLE D.O. 174-17 Registration (if a contractor/subcontractor).
  - Recent DOLE inspection results/COCs (if any).
  - OSH compliance file (Safety Officer appointment, safety program, training).
- Verify consistency of business name, address, and jurisdiction (Regional Office).
Agency Validation
- DOLE Regional/Field Office with territorial jurisdiction can confirm the existence and status of:
  - A company’s Rule 1020 establishment registration.
  - A contractor’s D.O. 174-17 status and validity period.
- Bureau of Working Conditions (BWC) maintains reference materials regarding contractors/subcontractors and OSH compliance programs.
- If you encounter privacy limitations, provide a letter of authorization from the company, or request the company to obtain Certified True Copies (CTCs) on your behalf.
Substance-over-Form Review (Contracting)
- Even with a D.O. 174 registration, check for labor-only contracting red flags, e.g.:
  - Contractor lacks substantial capital/investment.
  - Contractor’s employees perform activities directly related to the principal’s business under principal’s control.
  - Contractor does not exercise control over worker performance or lacks equipment.
- Findings here affect solidary liability and risk allocation in contracts.

III. Business Legality & Tax: Core Registrations

A. Which Agencies & Why They Matter

DTI or SEC (Legal Existence/Identity)
- DTI Business Name Registration — for sole proprietors (Act No. 3883, as amended).
- SEC Registration (RCC: R.A. 11232) — for corporations/partnerships/OPCs.
- Evidence:
  - DTI Certificate of Business Name Registration (with BN number).
  - SEC Certificate of Incorporation/Registration, Articles of Incorporation/Partnership, Bylaws, Company Information Sheet, and Notices of amendments.
  - For OPCs, the Articles for OPC and name of nominee/alternate nominee.
LGU (Mayor’s/Business Permit & Barangay)
- Local Government Code (R.A. 7160) vests LGUs with power to require Mayor’s/Business Permits, Zoning/Clearances, Barangay Business Clearance, Fire Safety Inspection Certificate (FSIC).
- Evidence:
  - Current-year Mayor’s/Business Permit (renewed annually; usually by Jan. 20 with penalties for late renewal).
  - Official Receipts of payment for Business Taxes and regulatory fees.
  - Barangay Business Clearance (validity usually annual; check address alignment).
  - FSIC issued by the Bureau of Fire Protection (pre-/post-inspection).
BIR (Tax Registration and Invoicing)
- NIRC §236: Businesses must register with the BIR and secure a BIR Certificate of Registration (Form 2303).
- Evidence:
  - BIR Form 2303 (shows tax types, RDO, obligations).
  - Authority to Print (ATP) or Permit to Use (PTU) CAS/CBA/CRM, and sample OR/SI (with valid serials, TIN, business name and address).
  - Books of Accounts stamping/permit (manual/loose-leaf/CAS/CBA).
  - “Ask for Receipt”/consumer awareness materials (contextual).
Secondary/Industry Licenses (as applicable)
- SEC Secondary Licenses: broker/dealer, investment house, financing/lending, crowdfunding, etc.
- BSP (for banks, MSBs/e-money issuers), Insurance Commission, DOH/FDA, DENR, DOE/DOTr, PEZA/BOI, HLURB/DHSUD, LTFRB, etc.
- Evidence: Certificates/permits matching actual business activities and locations.

IV. Practical Verification Steps (End-to-End Checklist)

Use or adapt the following due diligence flow, depending on whether you are a buyer, lender, principal, or counterparty:

Identify the Entity
- Full registered name, trade name, TIN, principal address, type (sole prop/partnership/corp/OPC), and lines of business.
- Obtain a corporate profile (SEC/DTI).
Collect Core Documents (from the company)
- DTI/SEC Certificate + constitutive docs (Articles, Bylaws; for amendments, Board approvals).
- BIR Form 2303, ATP/PTU, sample OR/SI.
- Mayor’s/Business Permit (current year), ORs, Barangay Clearance, FSIC.
- Lease/Title proving right to use premises named in permits.
- DOLE:
  - Rule 1020 (Establishment Registration) certificate/acknowledgment.
  - D.O. 174-17 registration (if contractor/subcontractor) + renewal proof.
  - COCs/inspection results (if any).
  - OSH compliance file (Safety Officer, safety program, training logs).
- Secondary licenses (only if applicable to the industry).
Cross-Check Consistency
- Business name must match DTI/SEC; address must align across BIR, Mayor’s Permit, DOLE documents.
- Nature of business on permits should reflect actual operations.
- For multi-site operations, ensure each site has the necessary LGU permits and DOLE Rule 1020 registration (registration is per establishment).
Validate with Authorities
- DTI/SEC: Confirm registration status, entity number, good standing, and any notices (e.g., revocation/dissolution for SEC).
- LGU BPLO: Confirm current-year issuance of Mayor’s/Business Permit, assessed taxes/fees, and zoning fit.
- BIR: While you cannot generally obtain a third-party TIN verification, you can verify Form 2303 details against official receipts and RDO information; you may request CTCs from the taxpayer or require a Tax Clearance (if appropriate).
- DOLE:
  - Rule 1020: Confirm the company (and each establishment) is registered with the relevant Regional/Field Office.
  - D.O. 174-17: Validate registration status and expiry; check if any compliance orders or inspection findings exist.
- Secondary regulators: Confirm scope and validity of specific licenses.
Substance Tests (Risk Red Flags)
- Expired permits or mismatched addresses.
- No Rule 1020 despite having employees.
- Contractor claims but no D.O. 174 registration, or expired.
- Invoicing on receipts without valid ATP/PTU or wrong business details.
- Mayor’s Permit issued for one city but operating elsewhere without a separate permit.
- Industry activities conducted without secondary licenses.
Secure Certifications/Attestations
- Require Certified True Copies of key documents (DTI/SEC, Mayor’s Permit, BIR 2303, DOLE certificates).
- Obtain secretary’s certificate/board resolution authorizing the representative to furnish documents.
- For sensitive validations, request a written authorization from the company for agency confirmation.

V. Special Situations

A. New Businesses / Pre-Operational

Rule 1020: Must file within 30 days from start of operations (not before incorporation alone); check timeline.
Mayor’s Permit: Some LGUs issue provisional permits pending inspections; track post-issuance requirements (FSIC, sanitation).

B. Multiple Sites / Work-from-Home / Remote Setups

Establishment is tied to place of work; register each site with DOLE Rule 1020.
LGU permits are location-specific; a head office permit does not license a separate branch.

C. Contractors and Subcontracting Chains

If your counterparty is a contractor, check:
- D.O. 174 registration validity (two-year cycle).
- Service Agreement provisions on control/supervision, equipment, and wage/benefit payment.
- Solidary liability risks if the arrangement is found to be labor-only.

D. Mergers, Acquisitions, and Lending

Include regulatory status and unpaid assessments in representations and warranties.
Require bring-down certificates at closing confirming no suspensions/revocations.

VI. Model Requests & Clauses

A. Sample Document Request (Vendor Onboarding)

DTI/SEC Certificate and latest amendments
Mayor’s/Business Permit (current year) + ORs
Barangay Business Clearance + FSIC
BIR Form 2303, ATP/PTU, sample OR/SI
DOLE Rule 1020 certificate (each operating site)
DOLE D.O. 174 Registration (if contractor)
COCs/Inspection results (GLS/OSH)
Secondary/industry licenses (if applicable)
Lease/Title for premises

B. Sample Representation & Warranty (Agreement)

The Counterparty represents and warrants that it is duly organized and validly existing under Philippine law; has obtained and maintains in full force all DTI/SEC, LGU (Mayor’s/Business Permit), BIR, and DOLE registrations and permits required for its business and each operating site; is in material compliance with labor, OSH, tax, and local regulatory requirements; and, where acting as a contractor/subcontractor, maintains a valid DOLE D.O. 174-17 registration. The Counterparty undertakes to immediately notify the Company of any suspension, revocation, expiration, or material adverse action relating to said registrations and permits.

C. Condition Precedent (for Contractors)

Prior to commencement, Contractor shall furnish certified true copies of (i) valid DOLE D.O. 174-17 registration, (ii) Rule 1020 for the covered establishment(s), (iii) current Mayor’s/Business Permit and Barangay Clearance, and (iv) BIR Form 2303 and PTU/ATP. Failure to maintain said registrations shall be ground for suspension of services and termination for cause.

VII. Red Flags & How to Respond

No DOLE Rule 1020 despite employees → Require immediate filing; consider start-of-work hold until proof is provided.
Expired D.O. 174 for a contractor → Treat as material breach; require suspension until renewal is proven.
Permit address ≠ operating address → Ask for branch permits and updated registrations.
Invoices lacking ATP/PTU → Reject invoices; request compliant documentation.
Industry activity without secondary license → Put operations on hold in that line; escalate for legal/regulatory review.

VIII. Data Privacy and Confidentiality

Government agencies may limit disclosure to third parties. Obtain company authorization for verification.
Handle TINs, employee lists, and contracts as confidential personal/sensitive data under the Data Privacy Act; share on a need-to-know basis and secure with appropriate safeguards.

IX. Penalties & Consequences (Illustrative)

DOLE may issue compliance orders, fines, or work stoppage for OSH hazards.
LGUs may deny or revoke permits; operate without a Mayor’s Permit and you risk closure and local penalties.
BIR can assess deficiency taxes, surcharges, interest, and closure under the Run After Fake Transactions and Oplan Kandado-type programs.
Civil/contractual consequences include termination, liquidated damages, and indemnity.

X. Quick Reference: What to Ask For, At a Glance

Identity & Existence

DTI or SEC certificate + Articles/Bylaws (or OPC docs)

Local Operations

Current Mayor’s/Business Permit (+ ORs)
Barangay Business Clearance
FSIC

Tax

BIR Form 2303
ATP/PTU + sample OR/SI
Books of accounts evidence (permit or stamping)

Labor/OSH

DOLE Rule 1020 certificate per establishment
DOLE D.O. 174 registration (if contractor)
COCs/inspection results; OSH files (Safety Officer, trainings)

Industry-Specific

Secondary license(s) matching actual business activities

XI. FAQs

1) Is DOLE Rule 1020 the same as a Mayor’s Permit? No. Rule 1020 is labor/OSH-related; the Mayor’s/Business Permit is an LGU license to operate.

2) If a company is SEC-registered, is it automatically DOLE-compliant? No. Separate compliance tracks. A corporation may exist legally but still lack DOLE registration, OSH compliance, or LGU permits.

3) Does D.O. 174-17 apply to all vendors? Only contractors/subcontractors that supply services to a principal under contracting arrangements. It does not apply to ordinary sellers of goods.

4) Can a head office permit cover all branches? Typically no. Branches require their own LGU permits and Rule 1020 registration if employees are assigned there.

5) Is a Tax Clearance the same as BIR registration? No. Tax Clearance (when available) attests to no outstanding liabilities (or acceptable arrangements). BIR Form 2303 proves registration and tax types.

XII. Closing Notes (Practical Tips)

Look for alignment across documents—names, addresses, business lines, and validity periods should match.
Calendar renewal dates (Mayor’s Permit annually; D.O. 174 every two years).
Treat verification as a living process, especially when onboarding contractors or opening new sites.
For high-risk industries or large engagements, consider a pre-award audit and periodic re-verification.

Editable Due Diligence Template (Starter)

Entity Profile: Name / TIN / Address / Business Line(s)
DTI/SEC: Cert # / Date / Status
LGU (Head Office): Mayor’s Permit # / Validity / OR #
LGU (Branches): City/Barangay / Permit # / Validity
BIR: Form 2303 / RDO / Tax Types / ATP/PTU details
DOLE: Rule 1020 (site-by-site) / D.O. 174 (if applicable) / COCs
Secondary Licenses: Agency / Scope / Validity
Findings & Red Flags: …
Actions & Deadlines: …

Use the checklists and clauses above to standardize how your organization verifies DOLE registration and business permits and to allocate risk appropriately in your contracts.