Learn the Kinds of Business Structures in the Philippines

Looking to set up your own business? Check out our guide to the different business structures in the Philippines.

Have you finally decided to enter the world of entrepreneurship? Already have a business idea in mind — maybe even in black and white already? Then it’s time to decide what type of business structure you’ll set up. This is highly important because the business structure defines many different aspects of starting a business such as costing, taxes, ownership, and jurisdiction requirements.

To help you out, here are the different business structures in the Philippines (under the law) you can choose from:

Sole Proprietorship

If it’s full control or authority you’re after, this is the business structure for you. Sole Proprietorship means the business and all its assets are owned solely by one individual. This is an apples to apples case because you get to enjoy the profits as a whole, and at the same time, suffer all possible losses as a whole as well.

Sole Proprietorship businesses must be registered with the Department of Trade and Industry (DTI) and must apply for a business name — at the very least.


Should you decide to start a business with other individuals, this becomes a Partnership. However, it’s important to take note that under the Civil Code of the Philippines, the legal personality of the Partnership is separate from any or all of its owners. In other words, it’s considered a juridical person in itself.

You can choose between a General Partnership wherein you and your business partners share unlimited liability of the company — debts, profits, responsibilities. Or a Limited Partnership where only some partners get unlimited liability because the rest are only responsible for the amount equal to their capital contribution.

Remember to check in with the Securities and Exchange Commission (SEC) to find out if you need to register your Partnership there.


If you want to go bigger, then you might want to start your own corporation with a minimum of five and a maximum of 15 shareholders. Their (and your) liability is only equal to the amount of their shares in the business.

Similar to a Partnership, a Corporation is treated as a legal entity apart from any or all of its shareholders/stockholders. It also has two types which are Stock Corporations with a capital divided into shares that are distributed to investors, and Non-Stock Corporations which function without sharing stocks because of its charitable, educations, or cultural purpose.

However, Corporations must always be registered under the SEC.

We all want to be our own bosses in one way or another. And if you want to take this the literal way, then it may be time to start your own business. But do take note that choosing the business structure for you takes a whole lot of evaluating, assessing, and planning. We hope this list helps!