Acquire property Philippines

Question:
I need advice on what is the best option for me to acquire a property being sold to me by my relative. What should I consider?

Answer:

Option 1: Outright Purchase

The simplest way to acquire the property is to buy it outright. Make sure to conduct due diligence, including verifying land titles, tax declarations, and whether there are any liens or encumbrances on the property. Once verified, both parties can proceed with drafting and signing a Deed of Absolute Sale, and the title can be transferred.

Pros:

• Immediate ownership transfer
• No prolonged financial obligations

Cons:

• Requires immediate, significant financial outlay

Option 2: Installment Sale

If you don't have enough funds for an outright purchase, you might consider buying the property in installments. In this case, a Contract to Sell may be drawn up, outlining the payment terms, including the down payment, the installment amount, and the payment schedule.

Pros:

• Easier on the budget
• Time to accumulate funds

Cons:

• Longer to gain full ownership
• Risk of default

Option 3: Loan Financing

You can also opt for a home loan from a bank or a financial institution. Your relative will get the full payment for the property, while you commit to repaying the loan to the bank according to the agreed terms.

Pros:

• Immediate ownership transfer
• Spread out payments

Cons:

• Interest payments
• Risk of foreclosure in case of default

Option 4: Lease with Option to Buy

Another option is to lease the property with an option to buy it later. This arrangement allows you to test living in the property before committing to purchase.

Pros:

• Test before you buy
• May involve smaller initial outlay

Cons:

• No equity built during the lease period
• Might be more expensive in the long run

Legal Considerations:

1. Due Diligence: Always carry out due diligence to ensure that all legal and procedural aspects are clear.

2. Contracts: Whichever option you choose, make sure that the agreement is formalized in a legally binding contract.

3. Legal Counsel: Engage a lawyer to review contracts and other documentation to ensure that your interests are protected.

4. Taxes and Fees: Be aware of all the taxes and fees that are involved in a property transaction, such as the Documentary Stamp Tax, Capital Gains Tax, and Transfer Tax.

Conclusion:

The best option for acquiring the property will depend on your financial situation, risk tolerance, and long-term plans. Consulting a financial advisor, along with a legal expert, can provide a more tailored approach to your property acquisition.

Business registration for a foreigner in the Philippines

Question:
What are the steps for business registration for a foreigner owner in the Philippines?

Answer:

Step 1: Choose the Business Structure

Foreign owners may establish their business as a branch office, a representative office, or a domestic corporation. Each type has different regulations concerning foreign ownership, so it's essential to choose the most appropriate structure for your business.

Step 2: Secure an Alien Employment Permit (AEP)

Foreign nationals are required to secure an Alien Employment Permit (AEP) from the Department of Labor and Employment (DOLE) before they can work in the Philippines, including managing a business.

Step 3: Register with the Securities and Exchange Commission (SEC)

You'll need to register your chosen business structure with the SEC, which governs company registrations. Prepare the necessary documents, such as the Articles of Incorporation and By-laws, and submit them to the SEC.

Step 4: Obtain Tax Identification Number (TIN)

Once registered with the SEC, apply for a Tax Identification Number (TIN) from the Bureau of Internal Revenue (BIR). This number will be used in all tax-related transactions and reporting.

Step 5: Mayor’s Permit and Business License

After SEC registration and acquiring your TIN, you must register the business with the local government unit (LGU) where it will operate. This involves securing a Mayor's Permit and paying the necessary local fees and taxes.

Step 6: Register with Other Government Agencies

You may also need to register with other government agencies like the Social Security System (SSS), Home Development Mutual Fund (Pag-IBIG), and the Philippine Health Insurance Corporation (PhilHealth) for employee benefits.

Step 7: Opening a Bank Account

Most banks require the SEC Certificate of Registration, Articles of Incorporation, By-laws, and a board resolution indicating the authorized signatories to open a corporate bank account.

Step 8: Secure Additional Permits

Depending on your business type, you may require additional permits such as Fire Safety Inspection Certificate, Environmental Clearance Certificate, or other industry-specific permits.

Step 9: Comply with Visa Requirements

Foreign nationals intending to work in the Philippines may also need to secure the appropriate working visa from the Bureau of Immigration. The specific type of visa would depend on various factors, including the nature of the business and the foreigner's role in it.

Step 10: Reporting and Compliance

Foreign-owned businesses must comply with periodic reporting requirements, such as the General Information Sheet (GIS) to the SEC, monthly and annual tax filings to the BIR, and other submissions to various government agencies. Failure to comply could result in penalties.

Conclusion

Registering a business in the Philippines as a foreigner involves navigating through multiple regulatory requirements and agencies. Ensuring that you follow the legal requirements to the letter can help you avoid future problems, and consulting with a legal expert is often advisable to ensure compliance.

Death of corporate directors Philippines

Question:
What will happen if the directors of the corporation died? Is it legal if the heirs of the directors wanted to sell the property/corporation? What will happen to the employees?

Answer:

Death of Corporate Directors

The death of a corporate director or directors has specific implications for the corporation. The Corporation Code of the Philippines lays out the framework for governance and functioning of corporations, including the process to fill the vacancy caused by the death of a director. Usually, the by-laws of the corporation specify the method for filling such vacancies. If the by-laws do not contain such a provision, a special stockholders' meeting may be called to elect a new director.

Authority of Heirs

Heirs of deceased directors do not automatically acquire the authority to manage or make decisions for the corporation. The ownership of shares may be transferred to the heirs, making them stockholders, but they would not automatically become directors. They can become directors only if they are elected as such by the stockholders.

Selling Corporate Property

The sale of corporate property is generally a decision that must be approved by the board of directors and may require ratification by the stockholders depending on the extent and nature of the property in question. Heirs who have inherited shares can exercise their rights as stockholders, including voting on matters like the sale of property, but they do not have the unilateral authority to sell corporate property.

Impact on Employees

The death of directors does not directly impact the employment status of the corporation's employees unless the directors were also engaged in the day-to-day management of the corporation. Typically, operations would continue under the management team, and any changes would likely be decided by the new board of directors.

Legal Safeguards and Corporate Continuity

Corporations often implement key man insurance policies and have succession plans in place to ensure smooth transition and minimal disruption in case of the sudden death of key personnel, including directors. Such proactive measures can mitigate the impact on the corporation and its employees.

Conclusion

The death of corporate directors triggers a specific set of corporate governance actions, as per the Corporation Code and the corporation's by-laws. Heirs may inherit shares and may become stockholders with voting rights, but they do not automatically gain the authority to manage or sell corporate property. Employees generally remain unaffected in their employment status, although a change in the board may lead to changes in corporate strategy and management.

Fiscal Philippines

Question:
How does the proceedings in the fiscal court work in the Philippines?

Answer:

The Role of the Prosecutor or Fiscal

In the Philippines, the term "fiscal" is often used to refer to a public prosecutor. It's important to note that "fiscal court" is not a term formally used in the Philippine legal system. Rather, the fiscal or public prosecutor plays a critical role in criminal proceedings which usually take place within municipal, regional, or special courts. The prosecutor is responsible for evaluating complaints, conducting preliminary investigations, and representing the People of the Philippines in court proceedings.

Preliminary Investigation

Before a case goes to court, a preliminary investigation is usually conducted by the prosecutor. This is the stage where the prosecutor evaluates if there is sufficient evidence to believe that a crime has been committed and that the respondent (the person accused) is probably guilty of the crime. Both the complainant and the respondent are given opportunities to submit affidavits and evidence.

Resolution and Information

After the preliminary investigation, the prosecutor issues a resolution. If the prosecutor finds probable cause, an Information (formal accusation) is filed in the appropriate court. If the prosecutor finds no probable cause, the complaint is dismissed.

Arraignment

If the case proceeds to court, the first key step is the arraignment, where the accused is read the charges and asked to enter a plea (guilty, not guilty, etc.). The prosecutor represents the government and presents the case against the accused.

Pre-trial and Trial

Following arraignment, a pre-trial conference may be held to consider matters such as plea-bargaining, stipulation of facts, and identification of witnesses. If the case is not resolved at this stage, it proceeds to trial. The prosecutor presents evidence, calls witnesses, and makes legal arguments in support of the charges.

Judgment

After both the prosecution and defense have presented their cases, the court issues a judgment which could either acquit or convict the accused. The prosecutor has the option to appeal the case if the judgment is not favorable to the prosecution.

Compliance with Legal Procedures

Throughout the proceedings, the prosecutor must comply with the Rules of Court, relevant laws, and procedural rules to ensure that the accused receives a fair trial.

Conclusion

The term "fiscal court" is not used in the Philippine legal system, but the fiscal or public prosecutor plays a crucial role in the criminal justice process. The proceedings involve several stages, from preliminary investigation to judgment, in which the prosecutor represents the People of the Philippines. The goal is to ensure that justice is served, while also upholding the rights of the accused.

Online loan application's operating license Philippines

Question:
If an online loan application's operating license got revoked in the Philippines, can they still charge their debtors?

Answer:

Legal Status of the Debt

The debt itself, as a legal obligation, generally remains valid even if the lender's operating license is revoked, unless the debt was incurred through fraudulent or illegal means. The revocation of a license primarily affects the lender's ability to continue doing business but doesn't automatically nullify existing legal obligations between the lender and borrower.

Consumer Rights and Regulations

Debtors have the right to be treated fairly and not be subjected to deceptive, unfair, or unconscionable acts. These principles are upheld by various regulations, including the Consumer Act of the Philippines (Republic Act No. 7394) and, depending on the specifics, potentially also by regulations governing financial institutions.

Existing Contracts

Any existing contracts between the lender and debtor typically remain in effect even after a license revocation, unless the contract itself or the manner in which it was executed is determined to be illegal. Debtors are generally expected to continue making payments as stipulated in their loan agreements.

Legal Recourse

Debtors should consult with a legal advisor if they are concerned about the implications of a lender's revoked license on their debt. There may be circumstances under which the revocation could affect the terms of the loan or the debtor's obligation to repay it.

Collecting the Debt

A lender with a revoked license may face restrictions on new lending activities but still has the right to collect on existing debts. However, they must abide by laws related to fair debt collection practices.

Complaints and Reporting

If a debtor believes that an online lending company is engaging in unfair practices, they can file a complaint with the Securities and Exchange Commission (SEC) or other relevant regulatory bodies. The revocation of a license is usually public information, and the regulatory body will have records of such actions.

Conclusion

In summary, the revocation of an online loan application's operating license doesn't automatically absolve debtors from their obligation to repay existing loans. However, it is advisable for debtors to consult legal experts to review their specific circumstances, particularly if they have concerns about the lender's practices.