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Philippines Partnership

Posted by Dave on Sunday, November 15th, 2009

Philippine Partnerships must be registered with the Securities and Exchange Commission (SEC).

Steps and requirements to register a partnership with the SEC are:

1 – Verification and reservation of the name of the partnership at the SEC. Once the name is accepted the SEC will issue a Name Verification Slip.

2Articles of Partnership:

The Articles of Partnership define the obligations, responsibilities and roles of each partner and how the profits and losses will be shared and states who the general and limited partners are. Unless otherwise stated a general partner may act on behalf of the partnership without any limitations. By law a limited partner is not allowed to participate actively in the management of the partnership or control of the business operations.

3 - Affidavit of a general partner undertaking to change partnership name (not required if Articles of Partnership has provision on this commitment)

+ Additional requirements:

-  Endorsement/clearance from other government agencies, if applicable

For partnership with foreign partners:

SEC Form No. F-105 (Application to do Business under the Foreign Investments Act of 1991 R.A. 7042, as amended

Foreign Investment Agent Application Form if foreign partner is not a resident of the Philippines.

Bank certificate on the capital contribution of the partners

For foreign partners who want to register their investments with the BSP:  Proof of inward remittance or affidavit manifesting intention not to register investment with the Banko Sentral ng Pilipinas.

4. File all the documents with the SEC, upon payment of the requisite filing fees.

Notes:

Partnership must be dissolved upon the death of one of its general partners.
General partners are personally legally responsible for all the obligations of the partnership.

Limited partners are personally legally responsible only up to the amount of their capital contribution to the Partnership.

A partnership is taxed like a corporation.

Partnerships are subject to the restrictions on foreign ownership in Foreign Negative List A & B

Foreigners can not be a partner in a partnership which owns land.

A corporation may not be a partner in a partnership.

In the case of a limited partnership, the word “Limited” or “Ltd” must be added to the partnership name.  Articles of Partnership of limited partnerships should be under oath only (Jurat) and not recognized before a notary public.

Documents signed outside of the Philippines must be authenticated by the Philippines Embassy/Consulate where it was executed.


Comments

By Marlon Crespo on June 15th, 2010 at 2:57 am

Hi.
Good afternoon.
I & my brother in law plan to open a Engineering business here in the Philippines which is a building Services Specialist and Consultancy and will be a 60-40% share.However under negative list A it was stated no foreign equity and is not clear to us. can you please help clarify?

Can we avail tax incentives, holidays?

Thanks in advance!

Marlon, a foreigner may not own any part or engage in an engineering business in the Philippines.

how much is the capital investment required to be registered in the SEC? all partnership business shall be registered by SEC, is P500,000.00 the required Capital?

Miriam, it depends on what kind of business you will operate. There are Limited Partnerships and Partnerships. We usually recommend to incorporate to limit personal liability.

Is there any foreign ownership restriction for a buying house (buy and sell) of live seafoods (fish & lobster)? Up to how many percent foreign equity is allowed? Thanks!

Jane, foreigners may own up to 40% of a corporation engaged in real estate. Foreigners may in engage in the buy and sell of sea foods as long as its wholesale.

if i want to start a partnership, how much will be the total estimated expenses in registering? like business permits, SEc etc….

John Mark, the SEC fees are based on the amount of capital that the partnership will have. Other business permits fees are based on the capital as well as the size of office and cost of rental.

Is it possible to start a partnership with the purpose of investing in publicly-listed companies? thanks in advance.

Junius, yes you may start such a partnership.

My singaporean partner agreed that I will be an industrial partner in the partnership we are planning to register. The partnership once in place plans to venture into dealership of one the new food cart concept in the country.Into what category should this fall? He is only willing to remit Php250,00.00 maximum which is the required capitalization in the business I proposed to him. I don’t want to discourage him on investing in our country. Can you please explain to me further regarding the minimum contributed capital equivalent of US$200,000.00 for a domestic market enterprise?Where can I ask assistance from SEC so my registration will be facilitated smoothly?Seeing all the requirements enumerated here scares me as well.

Zenaida, foreigners may not be owners or partners in small retail businesses.

Under the business enterprise setup (organized under the Philippine law), I gather that the partnership may consist of a foreigner.

Since the business in mind, renders the service in the Philippines, please advise what is contributed capital amount.

Roger, yes a foreigner can be a partner but the amount of capital depends on the percentage of foreign ownership and the kind of business.

i have a foreigner friend who wants to put up a business with me. we will buy a land and put up a resort. can my foreigner friend be my partner? coz i read on the article in this page that : Foreigners can not be a partner in a partnership which owns land.i also want to ask if he can buy his own land and put up a house because he plans to retire here in the Philippines.
thanks.

Charisma, you setup a corporation for the resort business. Foreigners can not land in their name in the Philippines.

Hi! my girlfriend and I are planning to start an import business here and after reading this article, im wondering if there would be any conflicts. i am a resident alien and my girlfriend is filipino. i am planning to get my dual citizenship soon but i was hoping we could start our business even though im still an alien. thanks in advance!

Peter, yes you may start the business if you are a foreigner, your percentage of ownership will depend on the amount you invest. Above 40% foreign ownership requires a minimum paid-in capital of USD200k

 

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