ARCH591

ARCH591
BUSINESS MANAGEMENT
APPLICATION FOR
ARCHITECTURE 1
Ar. Francisco P. Epe, mba
Introduction.
I ‘m an Architect, and like most Architect I’m
not a teacher and businessman by nature.
So why am I teaching ARCH591? My answer is
simple. I want to share to future Architects
who are starting their niche in the business of
Architecture.
I want to impart the basic knowledge in starting
a business I did 20 years back and provide the
insights in the government-mandated
reportorial requirements. These are based on
the new Tax Reform for Acceleration and
Inclusion (or TRAIN) Law.
My motivation is for awareness of our basic
responsibility when doing business especially
in the practice of Architecture. It’s important
for us to be honest in all our business ventures
because God will bless us even more if we are
faithful to our clients and to our government.
Apart from being a registered and licensed
Architect, I took up and finished Master’s degree
in Business Administration in 2013 to further
equip my design & build business I founded in
2002.
Through the years, we have over a hundred
projects ranging from residential, commercial,
industrial, interior fit-outs, etc.
Gained accreditation from companies such as
LBC Express, Triumph International, Pru Life UK,
Phinma Properties, PNB among others.
1. What Form of Business Enterprise Should I
Choose?
There are four (4) types of business
enterprises that you can choose from.
These are; sole proprietorship, partnership,
corporation, and cooperative.
1.1 Sole proprietorship
This kind of business is solely owned by an
individual. This is the easiest to organize. In case
of dissolution or bankruptcy, however, this kind
of business is the most dangerous, since your
creditor can run after all your personal properties
should anything go wrong. Capital
requirement depends of what kind of
business you are going to pursue. It could
either be capital intensive or no capital at all.
1.2 Partnership
This kind of business is owned by two or
more partners. It could either be a
professional or general partnership.
Professional partnership involves the practice
of one’s profession, like architecture, law or
accountancy.
General partnership involves any kind of
business. Limited partners are business
partners with limited liability up to the extent
of their investment in the company in case the
company has to pay its creditors.
In case of financial distress, they will not be
required to add money to pay the creditors unlike
the general partners.
The starting capital depends on the kind of
business the partners will pursue.
1.3 Cooperative
This kind of business is owned by a minimum
of 15 individuals. It can have as many members as
possible, but each member’s investment may not
exceed 10 percent of the total capital of the
organization. Members vote for the officers of the
cooperative.
The provision of Republic Act 9520 and
its implementing Rules and Regulations
govern the cooperative acts. Registration is
done with the Cooperative Development
Authority (CDA).
1.4 Corporation
1.4.1 Regular Corporation
Corporation, as defined in the Revised
Corporation Code of the Philippines, is an
artificial being created by operation of law,
having the right of succession and the powers,
Attributes, and properties expressly authorized
by law or incidental to its existence. It can be
formed by two or more incorporators but not
exceeding fifteen (15). It has a perpetual
existence unless its articles of incorporation
provides otherwise.
There is no minimum capital stock, except as
otherwise specifically provided by special law.
In case of bankruptcy or financial distress,
liability to creditors is limited to capital
contributions, making the corporation the
safest form of business endeavor.
1.4.2 The One-Person Corporation
A one-person corporation, as defined in the
Revised Corporation Code of the Philippines, is a
corporation with a single stockholder.
Only a natural person, trust, or an estate
can form a one-person corporation.
There is no minimum authorized capital stock
required for a one-person corporation, except
as otherwise provided by special law.
It is not even required to submit and file
corporate by-laws. It must indicate the letters
“OPC’ either below or at the end of its
corporate name.
The single stockholder of a one-person
corporation is the sole director and president of
the corporation.
Securities and Exchange Commission (SEC)
Memorandum Circular No. 7, Series of 2019 which
took effect on May 1, 2019 provides the term of
one-person corporation as perpetual.
If it is a trust or estate, its term shall be co-
terminus with the existence of the trust or estate.
Fifteen days after the issuance of the
certificate of incorporation, a one-person
corporation must appoint a treasurer, corporate
secretary, and other officers necessary for the
operation of the business.
It must notify the SEC within five (5) days
after the appointment and run the business
like a real corporation.
The company’s funds should be separate
from the owner’s personal funds. Liability to
third parties and creditors are also limited to
capital contributions.

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