Verifying the Legitimacy of Companies Operating in the Philippines
A practitioner’s all‑in‑one guide (updated to 30 July 2025)
1. Why “verification” matters
- Legal exposure. Contracting with an unregistered or non‑compliant entity can void agreements, block enforcement, and create tax or money‑laundering liability.
- Regulatory risk. Government agencies may blacklist suppliers that lack proper licences.
- Reputational harm. Investors, lenders, and consumers increasingly perform ESG and beneficial‑ownership checks before transacting.
2. Core statutory framework
| Law / Issuance | Key Points for Verification |
|---|---|
| Revised Corporation Code (RCC, RA 11232, 2019) | Governs incorporation, SEC filings, perpetual existence, one‑person corporations, online “One‑Day Submission & E‑Registration” (OneSEC). Misuse of “Inc.” or “Corp.” without SEC registration is penalised. |
| Business Name Law (Act 3883) & DTI BNRS rules | Sole proprietorships must secure a DTI Business Name (BN) Certificate—renewable every 5 years—searchable on the BNRS portal. |
| Ease of Doing Business & Anti‑Red Tape Act (RA 11032) | Mandates digitised, one‑stop business permit processing and public‑facing transparency of LGU permit ledgers. |
| Foreign Investments Act (FIA, RA 7042 as amended by RA 11647, 2022) | Sets Negative List and SEC licensing rules for foreign entities; requires an SEC “Licence to Do Business” (not merely a representative office) if regularly soliciting business. |
| Anti‑Money Laundering Act (AMLA, RA 9160 as amended) | Covered persons must perform Know‑Your‑Customer (KYC) and report suspicious transactions; SEC Memorandum Circular 1‑2021 obliges corporations to declare beneficial owners in the General Information Sheet (GIS). |
| Sector‑specific charters | Banks (BSP), insurers (IC), utilities (ERC/DOE), schools (CHED/DepEd), contractors (PCAB), BPOs (DICT BOI/PEZA). Each regulator keeps its own licence database. |
3. Key government registries & what to look for
Securities and Exchange Commission (SEC) Tools:
- SEC eSPARC / CRS (Company Registration System) – confirms incorporation date, company number, status (“active”, “revoked”, “dissolved”).
- SEC Express System – order copies of Articles, By‑laws, latest GIS, audited financial statements (AFS). Red flags: Non‑filing of AFS/GIS for two consecutive years (may lead to revocation under RCC § 177).
DTI Business Name Registration System (BNRS) Check: Certificate validity, exact BN spelling (typos invalidate). BNRS does not confer juridical personality; verify if the proprietor’s TIN appears on BIR Form 2303.
BIR Registration (Internal Revenue)
- Certificate of Registration (Form 2303) must show correct line of business, address, and valid OR series.
- Official Receipts / Sales Invoices should bear an Authority to Print (ATP) or a Permit to Use (PTU) for CAS/CRM.
Local Government Unit (LGU) Business Permit & Licensing Office
- Mayor’s/Business Permit is issued yearly. Look for an OBR (official barcode/reference) and paid Real Property Tax for the premises.
- Cross‑check zoning clearance and fire‑safety inspection certificates.
Social Agencies (SSS, PhilHealth, Pag‑IBIG Fund) Mandatory registration numbers should appear on employment contracts and payroll reports. Absence can indicate labour‑law violations.
Sector‑Specific Lists
- Bangko Sentral ng Pilipinas (BSP): “List of BSP‑Supervised Financial Institutions” (BSFIs).
- Insurance Commission (IC): “IC‑Registered Insurance/Reinsurance Companies”.
- Philippine Contractors Accreditation Board (PCAB): valid licence category & expiration.
- PEZA / BOI / CDC / SBMA: locators with tax incentives—verify BOI Certificate of Registration or PEZA ecozone locator ID.
4. Entity‑specific due‑diligence road‑map
| Entity Type | Primary Proof | Supplemental Checks |
|---|---|---|
| Domestic corporation / OPC | SEC Certificate of Incorporation; latest GIS; AFS stamped “RECEIVED” by SEC‑EPD. | Board resolution on authorised signatories; share‑certificate logbook; beneficial‑ownership pages. |
| Domestic partnership | SEC Certificate of Registration; Articles of Partnership. | 2025 BIR AFS; amended partnership agreements. |
| Foreign corporation (branch, ROHQ, RHQ) | SEC “Licence to Do Business” + Application Form F‑103; apostilled board resolution authorising the Philippine branch. | Consularised parent financial statements; FIA compliance (if not in Negative List). |
| Sole proprietorship | DTI BN Certificate; BIR COR. | Mayor’s Permit; pictorial evidence of physical store or registered virtual office. |
5. Practical verification workflow
Name check. Start with SEC Name Reservation / DTI BNRS; confirm spelling vs invoices or email domains.
Online registry search. Retrieve PDF copies of SEC Certificate, GIS, DTI BN, Mayor’s Permit; look for matching addresses and dates.
Document inspection.
- Ensure original signatures and “wet” SEC hologram (for certificates issued pre‑digital).
- Compare corporate seal impressions where available.
Site visit & phone verification. Call the trunk line, request operator transfer, check physical signage, and confirm existence of key officers.
Financial health. Read AFS notes, see if external auditor is accredited by the Board of Accountancy; compute debt‑to‑equity and current ratios.
Beneficial‑ownership & sanctions screening. Use GIS Annex J and cross‑match against AMLC’s Financial Blacklist Order, UN SC sanctions list, and the Bureau of Immigration watchlist.
Employees & labour compliance. Ask for proof of SSS R‑1 registration, PhilHealth ER2, Pag‑IBIG RF‑1, and latest SSS R‑3 remittances.
Regulatory licences (if sectoral). For example, BSP Certificate of Authority to Operate (for EMI); PCAB licence (for construction).
Litigation & insolvency. Pull docket from e‑Courts or the Supreme Court E‑Library; check SEC’s Financial Rehabilitation Court docket for ongoing rehabilitation or liquidation.
Confirm tax clearance. Request a BIR Tax Clearance for Bidding Purposes (valid 12 months) or verify Electronic Certificate Authorising Registration (eCAR) for property deals.
6. Common red flags & how to interpret them
| Red Flag | Possible Implication | Recommended Action |
|---|---|---|
| “Non‑compliant” status in SEC CRS | Failed to submit AFS/GIS, risk of suspension or revocation. | Ask for proof of recent filings or payment of penalties before closing. |
| DTI BN expired >6 months | Business name has lapsed; use may be illegal. | Require renewal and BIR COR reflecting new BN certificate. |
| Mismatched addresses across documents | Shell or virtual office front; potential misrepresentation. | Conduct physical inspection or require updated GIS and mayor’s permit. |
| Auditor not in BOA roster | FS may be unaudited or fake. | Demand re‑audit or engage an accredited firm. |
| “One‑person corporation” with multiple signatories | Potential falsification; OPC legally has a sole stockholder. | Review Articles and Secretary’s Certificate on authorised representative. |
| Unlicensed foreign entity issuing invoices | Violates FIA and RCC §§ 140‑141; contracts may be void. | Require SEC branch licence or transact with an incorporated subsidiary. |
7. Verification nuances for specialised sectors
- Fintech / Virtual Asset Service Providers (VASPs). Must hold a BSP “Certificate of Authority” and an Anti‑Money Laundering Council (AMLC) registration.
- Health‑care providers. Hospitals need a DOH Licence to Operate (LTO) and PhilHealth accreditation; pharma companies need FDA Marketing Authorisation Holder (MAH) numbers.
- Education. Private schools require a Permit to Operate from DepEd (basic) or recognition from CHED (higher ed).
- Energy & utilities. Generation, distribution, and retail suppliers must possess ERC certificates; cross‑check DOE Energy Service Contract numbers.
8. Penalties for misrepresentation
| Offence | Penalty (as of 2025) |
|---|---|
| Using “Inc.”/“Corp.”/“Ltd.” without SEC registration | Fine up to ₱ 1 million + cease‑and‑desist + possible criminal liability under RCC § 159. |
| Operating without Mayor’s Permit | LGU closure order, surcharges up to 25 % + daily fines. |
| Soliciting business without SEC licence (foreign corp.) | Fines up to ₱ 2 million + deportation of responsible foreign officers. |
| False statements in GIS/AFS | Criminal penalties under RCC § 161 (₱ 200k–2 million) + civil damages. |
| AMLA KYC failures | Up to ₱ 5 million per transaction + forfeiture of funds. |
9. A consolidated diligence checklist (print‑friendly)
- ☐ SEC Certificate of Incorporation/Licence or DTI BN Certificate
- ☐ Latest SEC‑stamped GIS & AFS (or DTI BN renewal slip)
- ☐ BIR Form 2303 & recent VAT/percentage‑tax returns
- ☐ Current Mayor’s/Business Permit & Barangay Clearance
- ☐ SSS, PhilHealth, Pag‑IBIG employer numbers + latest remittances
- ☐ Sector‑specific permits (BSP/IC/PCAB/PEZA etc.)
- ☐ Proof of physical address (lease, tax declaration, geotagged photos)
- ☐ Board/partners’ resolutions on authorised signatories
- ☐ Beneficial‑ownership disclosures & sanctions screening report
- ☐ Litigation, insolvency, and adverse‑media search results
10. Practical tips for in‑house counsel & compliance officers
- Leverage digital portals. Almost all primary registries (SEC, DTI BNRS, PCAB, ERC) now provide PDF downloads—no need to rely on photo scans.
- Calendar expiries. Input permit and licence expiry dates into compliance software to trigger auto‑reminders.
- Require notarised undertakings. For high‑risk counterparties, demand a sworn affidavit of continuing compliance, updated quarterly.
- Escrow contractual payments. Release tranches only after counterparties furnish renewed permits each year.
- Stay alerted. Subscribe to SEC Advisories and BSP Public Warnings for boiler‑room operations and unregistered investment schemes.
11. Conclusion
Verifying corporate legitimacy in the Philippines is no longer a paper‑chase but a digital, multi‑agency exercise that touches corporate, tax, labour, AML, and sectoral regulation. A disciplined workflow—starting with name searches, moving to registry downloads, and finishing with on‑site and financial checks—mitigates legal and commercial risk. As enforcement tightens under the Revised Corporation Code and AMLA, thorough due diligence is not merely best practice; it is a statutory shield for directors, compliance officers, and professionals who must show they exercised the “highest degree of diligence” mandated by Philippine jurisprudence.