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2. MODULE V
COURSE : ENTREPRENEURSHIP
UNIT OF COMPETENCY : LEGALIZE A BUSINESS
MODULE TITLE : LEGALIZING A BUSINESS

3. WHAT IS THIS MODULE ABOUT?
This module covers the knowledge, skills,
attitudes and values needed in legalizing a
business.

4. WHAT WILL YOU LEARN?
At the end of this module, you should be able
to:
a.enumerate the procedure in legalizing the
business;
b.gather legal documents pertaining to
business/enterprise; and
c.explain the importance of registering the
business to various government offices.

5. WHAT DO YOU ALREADY KNOW?
Pre-test
Let us find out how much you already know about
legalizing a business. Read and understand the
questions below. Choose the correct answer by
writing the letter of your answer in your quiz
notebook.

6. 1. After registering with the DTI, the certificate becomes your proof of _____.
a.authority to operate a business
b.business ownership
c.license to operate
d.payment of taxes
2. Where do you need to go to in order to secure the municipal license or
Mayor’s permit which will serve as your license or permit to operate the
business?
a.BIR
b.BPLO
c.CDA
d.DTI
3. Article of Partnership or Article of Incorporation should be registered with
this agency.
a.BIR
b.DTI
c.SEC
d.YECS

7. 4. If you need to systematize the payment of taxes of your
business, where will you go?
a.BIR
b.DOLE
c.SEC
d.SSS
5. It is necessary to register your business to make it
_____.
a.functional
b.legal
c.operational
d.profitable

8. LESSON 1
ENUMERATE AND EXPLAIN THE
STEPS/PROCEDURE IN MAKING
THE BUSINESS LEGAL

9. WHAT IS THIS LESSON ABOUT?
This lesson discusses the steps/procedure in making the
business legal.
WHAT WILL YOU LEARN?
At the end of the lesson, you should be able to:
1.enumerate and explain the steps/procedure in legalizing
a business;
2.gather legal documents pertaining to business; and
3.emphasize and explain the importance of registering the
business and various government offices.

10. Words to Study
Ownership means an exclusive right of a person to a
business
Authorization is the issuance of approval to operate
Legalize means to be permitted by law
DTI – Department of Trade and Industry
DOLE – Department of Labor and Employment
SSS – Social Security System
SEC – Securities and Exchange Commission
CDA – Cooperative Development Authority
BPLO – Business Permit and Licensing Office

11. Legality of your business venture is necessary to
make your operation legal. The following pages
shows some of the documents to be secured from
the different governments agencies to run your
enterprise legally. Without compliance with the
legal requirements your business is considered
illegal. These are documentary transactions
between the owner of the business and the
government.

12. The following is the procedure
in registering a business as
mandated by the Introduction
to Entrepreneurs of Small
Enterprises, Research and
Development Foundation
(SERDEF).

13. Register your business name with the
Department of Trade and Industry (DTI). The
certificate issued after registration becomes your
proof of business ownership.
Register with your municipal city government.
When you have a municipal license or a mayor’s
permit, this serves as your authorization to
conduct or operate the business.
Register with the Bureau of Internal Revenues
(BIR). This will help systematize your financial
operation and payment of taxes

14. You have to register at the Social
Security System (SSS) if you have five or
more employees.
Register the Article of Partnership or
Article of Incorporation with the
Securities and Exchange Commission
(SEC).
Register with the Department of Labor
and Employment.

15. There are several benefits derived from registering your business
with the government, as follows:
1.When you register your business with the Department of Trade
and Industry, the certificate issued to you becomes your proof of
business ownership.
2.The municipal license or Mayor’s permit issued to you serves as
an authorization for you to operate your business.
3.Your registration with the Bureau of Internal Revenue will help
you systematize your financial operations and the payment of
taxes.
4.If you have registered your business enterprise with Cooperative
Development Authority (CDA)which is optional, you can enjoy
the following privileges:

16. a.Exemption from taxes and fees except from real
property and capital gains tax, import duties and
taxes, value-added tax on imported articles, taxes
on income not arising from the CDA activity such
as interest, royalties, prizes and dividends.
b.Exemption of the CDA derived income from the
computations of the owners or members in
division.
c. Exemption from any government rules and
regulations on assets, income and activities
directly connected with the services of CDA.

17. It is a must to register your business for your
own benefit and protection. When your
business has been registered you are now
ready to own your business and face challenges
coming your way.

20. LET US APPLY WHAT YOU HAVE LEARNED
Activity 1. Interview a business owner in your
neighborhood. Ask him/her how the business was
registered, how much it costs him/her to register
his/her business. Share interview results with the class.
Activity 2. Interview a shareholder of a successful
cooperative enterprise. Ask how he/she registered the
business and how much is the cost.

21. Activity 1
Write the steps in registering your business. Record them in the correct
order. Do this in your quiz notebook.

22. Activity 2
Filling-up of legal forms.
Directions:
Fill-out the application form in applying for a
business permit.

24. Post-Test
Let us find out how much you already know about legalizing a business.
Read and understand the questions below. Choose the correct answer
by writing the letter of your answer in your quiz notebook.
1. After registering with the DTI, the certificate becomes your proof of _____.
a.authority to operate a business
b.business ownership
c.license to operate
d.payment of taxes
2. Where do you need to go to in order to secure the municipal license or
Mayor’s permit which will serve as your license or permit to operate the
business?
a.BIR
b.BPLO
c.CDA
d.DTI

25. 3. Article of Partnership or Article of Incorporation should be registered with
this agency.
a.BIR
b.DTI
c.SEC
d.YECS
4. If you need to systematize the payment of taxes of your business, where
will you go?
a.BIR
b.DOLE
c.SEC
d.SSS
5. It is necessary to register your business to make it _____.
a.functional
b.legal
c.operational
d.profitable

27. KEY TO CORRECTIONS
Pre-test and Post-Test
1.B
2.B
3.C
4.A
5.B