Permits for a Retail Leasing Business

Have you heard of the "Location, Location, Location" in the game of Real Estate? Like, one does have to reiterate its importance. For one, kind of, in a nutshell, location determines the value of a certain property. It is a major factor in gauging to increase (or decrease) the property's value due to location. Location determines the rent, utilities, positioning, and also asking price if the asset is for sale.

Many parts of the business require a lot. For it to be functional and smooth in terms of operations, marketing, finance, accounting, and legal, it'd take a lot in terms of the endeavor on building each department.

Registering your business is also an equally important thing.

My tenants are always asking if there's a need for them to get their own business permits. If there's a need for them to secure one since they're just starting out, or it's still the middle of the year, and many more.

Registering your business means you are not just here for the short term. From the perspective of your customers, you are serious about offering your Products / Services. It's also a form of compliance that you need for you to be able to do business at ease with your respective Local Government regulator.

In prior years I've secured Business structure as a Sole Proprietor and Corporation in Real Estate Brokerage and Development.

How is it important and what benefits? I listed some of my personal experiences when it comes to the benefits of having a business license.

1. Builds trust for your customers or suppliers: Having registered and legitimized your business builds trust in your customers and suppliers. It implies that you are not just here for the short term but you are here to do serious business. Having a Business Permit is like having a badge to show your peers that you are trustworthy in doing business.

2. Leasing: when you are a landlord: even if it's Residential or Commercial, you have to secure your business permit because you are earning via Rent or Lease Payment. It would be recorded as Rent Income. As mentioned, even if it's Residential, the treatment of the Landlord would be registered as Commercial Property Leasing in Registration and its treatment.

3. Customers / Suppliers requesting for Original Receipt. One of the pre-requisite of having registered your business in the BIR is your Business Permit. For the BIR to issue an original receipt for you to update and issue it to your customers. Mostly, suppliers are asking for these receipts or you are the one who will issue them.

4. Tax Mapping or Evasion. Now, this is the most crucial part. Without having the right licenses you could be penalized by the BIR with fees, shut down your business, or worst, imprisonment. You cannot justify not paying your obligations by being 'woke' of business, just because you said so otherwise that the government is not being fair or it would just be robbed by government officials in their own pockets. No, it's an obligation by you, as a business owner. See BIR website: https://bit.ly/33uMjAo

5. Less LGU problems and inspection. Like the BIR's obligation to map if you are paying your dues or not, the Local Government Unit would also be the one who would inspect or raid your store if you don't have the right papers. The BPLO or Business Permit Licensing Office would raid your stores and put a padlock on them if you do not comply

6. Borrow money for expansion. One of the advantages or benefits that you can use your paper is that you can use it to borrow money from other financial institutions like Esquire and First Circle. They accept non-collateralized commercial loan and differ from Banks that require you to produce collateral either land or chattel that you need to get the liquidity you need for expansion.

In whatever industry you're in, your endeavors in your project, business, and livelihood, it's still best to secure and comply with our respective regulators to do business at ease.

Author:

Carlos Payumo Garcia?|?Land Lord?|?Investment Banker?|?Capital Markets Professional?|?Real Estate Salesperson?| Lead Guitarist | Husband | Baptist

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