Revoking Registered Business Name

My attention was called when I visited ULOP, a forum frequented by Filipino i-café owners, and saw a new thread discussing about a news release containing a senator’s objection on the plan of the Department of Trade and Industry (DTI) to issue new guidelines on business name registration which he said would be detrimental to small businesses. Senator Manuel Villar Jr,, chairman of the Senate’s committee on economic affairs, was referring to DTI’s Administrative Order 10-08 Series of 2010 (DAO 10-08 s.2010) which include a provision (Section 28.4) that would allow the cancellation of business name registration of new establishments that fail to operate within six months from date of registration.

The DTI has been conducting nationwide public consultations regarding proposed amendments to the referred administrative order and one such amendment that they are planning to have is that new business name registrants must submit copies of their business permits within the six-month period or face cancellation of their registration as well as their right to their trade names. According to the information you can find when you see at the website, this new rule would hamper the growth of small enterprises because a lot of these ventures need time to “test the waters” before committing fully to their intended business. You can always see here if you are looking for a detailed advice.

Sen. Villar, himself a successful businessman, contended that using business permit as basis of compliance to the DTI’s six-month policy would be ill-advised because this would not be an accurate indicator of whether a business is already operating or not. He added that, sometimes, small business owners tend to procrastinate their securing of permits from local government units (LGUs) for a few months as they break the ground and feel their market first via guerilla marketing, not to mention the myriad of other requirements that they have to prepare before becoming legit.

As if to justify not getting an LGU permit at the start of a business, Villar asked “What’s the use of securing a business permit when you will have to throw in the towel after six months because of bad business climate or a bad business call aggravated by high power costs and other utilities?” This is the statement of the good senator that may have made some i-café owners at ULOP forum to say that he is in favor of not securing permits before a small business operates.

Under Section 12 of DAO 10-08 s.2010 regarding original application for business name, “The original application must be filed AT ANYTIME before the commencement of the applicant’s business operation.”. After registering the business name, securing the permits from the LGU and BIR (Bureau of Internal Revenue) should follow before a business starts. While some businessmen intentionally ignore these requirements, I personally believe that Sen. Villar did not mean it is alright to go on and operate a business without registering it first with the concerned government agencies. He could have been misquoted, to use a cliché, on his real reason for objecting to new rule that DTI intends to implement. What do you think?

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