Unawa Pioneers RegTech in the Philippines

The digital age has changed the way we communicate and, in many areas, the way we live. In business, start-ups and conglomerates alike are under constant pressure to grow their enterprises, while developing better ways to comply with evolving regulations for consumer protection. With the speed of technological innovation, this is proving to be a challenging task for companies, whether they are big names or novices. 

Enter Unawa, a pioneering startup in regulatory tech (“regtech”) that aims to help SMEs and large enterprises navigate the often-intimidating and yet always-critical compliance processes and requirements for doing business.

“Unawa aims to make regulatory compliance as pain-free as possible for enterprises and SMEs so they can focus on their core businesses and become real engines of economic growth. We all move closer to this goal with the combined power of technology and legal expertise at our fingertips,” said Atty. Monalisa Dimalanta, Chief Executive Officer of Unawa and Partner at PJS Law.

Unawa is a collaboration between Talino Venture Labs, the first inclusiontech venture builder in the Philippines, and PJS Law, a highly acclaimed firm with key expertise in infrastructure, energy, mergers and acquisitions, and banking and finance in the Asia Pacific. 

“With Unawa, we are demystifying the barriers in doing business here in the Philippines as we seek to make entrepreneurship an opportunity not just for the big names but for the small entrepreneur as well,” said Winston Damarillo, Talino Venture Labs Chief Executive Officer and Chief Strategy Officer of Unawa.

Unawa is the third in a string of inclusiontech startups that Talino launched in 2019, at the heels of Asenso (fintech, agritech, retailtech launched in August) and Saphron (insurtech launched in April).

 

Legally attuned to thrive in the digital age

The name Unawa is derived from the Filipino word for understanding or comprehension, and  enables the local business community to thrive amid the regulatory requirements of the country. The platform is set to leverage Talino’s expertise in artificial intelligence (AI) and machine learning, to make it easier for startups and enterprises alike to comply with laws and implementing rules and regulations—which often is a stumbling block for businesses to start or scale.

The founding team expects two flagship products to be online by the first quarter of 2020. 

Its main product, Unawa Privacy Guard, will aid companies to navigate the legalese behind Republic Act No. 10173, or the Data Privacy Act of 2012 (DPA) as they offer products and services for the digital consumer. 

Meanwhile, Unawa RapidStart will offer a true one-stop shop for entrepreneurs to start a business—from name filing all the way to local government permits. 

“We’re reducing the friction for companies to serve the urgent needs of a digital economy, so more and more companies can better serve their always-online customers while staying compliant with changing regulations. Digital is the new imperative, and both the private and public sectors are figuring out how to best navigate this world. Unawa will give them the capability to do that,” explained Damarillo.

 

The worldwide costs of compliance

Around the world, businesses spend an astounding $436 billion on compliance, not including some $26 billion in fines to financial institutions for failing anti-money laundering (AML) and know-your-customer (KYC) requirements. In Asia Pacific, regulators have already handed out 79 fines amounting to $609 million since 2011.

“There are inefficiencies inherent in paper-intensive and highly manual types of work, and the compliance costs arise mostly from these,” pointed out Unawa’s Dimalanta.  

“When we help companies deal with the legal complexities of operating in a more digital world, we enable them to focus on their core businesses, and unlock greater value for their companies,” concluded Dimalanta.


What You Need to Do After Registering With the SEC

If you haven’t registered your company with the Securities and Exchange Commission (SEC) yet, make sure to read this step-by-step guide first before doing any of the steps listed below. All of the following steps require a Certificate of Incorporation from the SEC, which you will only get after you’ve completed the registration process with them.

If you already have your Certificate of Incorporation, then congratulations! You’re one step closer to setting up your brand new business. While the SEC now recognizes your startup as a full-fledged company, you will need to register your business with other government agencies to ensure that you can operate properly, you can process transactions legally, and that you treat your employees fairly. 

In this article, we’ll list everything you have to do to register your company after incorporating with the SEC. 

1. Obtain Barangay Clearance from the Barangay Office

Time: At most 2 days

Fees: Varies per barangay, minimum of Php1,000

The first local government unit (LGU) you’ll need to visit after the SEC is the barangay office covering your business address, as you will need to get clearance to operate your company out of its location. When applying for barangay clearance, you will need to submit the following documents:

  • Certificate of Incorporation from the SEC
  • Proof that you own or are leasing the office space, such as a Land Title or a Lease Agreement
  • Other additional requirements based on your industry

With these documents, go to the barangay hall where your principal office is located and fill out an application form. After submitting this form and the above documents, you will be asked to pay a barangay clearance fee. This fee varies per barangay, and it can be a fixed fee dictated by the barangay or a customized fee depending on your office space. The process normally does not take more than two days to complete.

 

2. Get a Business Permit from the City Hall

Time: Varies per city, usually takes several weeks

Fees: Varies per city, may range from Php5,000 to Php25,000

After getting the barangay clearance for your business, you’ll need to go to the applicable city hall or mayor’s office of your company’s principal address to get a business permit. The requirements for this step are:

  • Certificate of Incorporation from the SEC
  • Proof that you own or are leasing the office space, such as a Land Title or a Lease Agreement
  • Barangay Clearance 
  • Community Tax Certificate
  • Other additional requirements as dictated by the LGU, such as photos of the office location or comprehensive general liability insurance
  • Other additional requirements based on your industry

After completing a form and submitting all the required documents, you will have to go to specific officers in the city hall to get other necessary permits that deem that your office is safe to operate. These permits are needed to get the business permit, which may include:

  • Locational clearance
  • Electrical inspection permit
  • Sanitary permit
  • Fire safety inspection permit

Each of the permits above, as well as the business permit itself, has a certain fee attached to them, which varies per city. Once you’ve submitted all the documents and gotten all the permits, you will receive your business permit after a couple of weeks.

 

3. Register Your Business with the BIR

Time: A few weeks

Fees: Minimum total of Php2,000 for the annual registration fee, fee for registering books of accounts, application fee for authority to print official receipts, and printing fee for official receipts

After receiving your Business Permit, or if you’ve already received a document claiming that your Business Permit is already being processed (i.e., you don’t have any pending submissions or requirements), then you can move on to the next step of registering your business with the Bureau of Internal Revenue (BIR). This will give your business the means to pay the taxes required by law.

Proceed to the Revenue District Office (RDO) that covers your business address, which you can search for in this directory from the BIR. You will need to submit the following documents:

  • Certificate of Incorporation from the SEC
  • Proof that you own or are leasing the office space, such as a Land Title or a Lease Agreement
  • Barangay Clearance 
  • Business Permit, or proof that your Business Permit is being processed
  • BIR Form 1903 
  • BIR Form 1906
  • Other documents as dictated by the RDO

Once you submit the above documents and pay all the necessary fees, the BIR will release your Certificate of Registration within a few weeks. Some RDOs will require you to attend a seminar detailing your tax responsibilities as a business owner before they release your certificate.

 

4. Register Your Business with the SSS

Time: A few days

Fees: None

There are three agencies you’ll need to register with in order to cover the rights given to your employees, and how much you’ll be dealing with all three of them will depend on your employee structure. First up is the Social Security System (SSS), the country’s social insurance program covering employees of private companies. 

To register with the SSS, you will need to submit the following documents to the SSS office closest to your principal address. All of the forms from the SSS will need to be signed by the company’s president or an authorized corporate officer:

Once your registration has been processed, which will take a couple of days, you will receive an SSS Registration Certificate, which you will need for the next steps.

 

5. Register Your Business with PhilHealth

Time: A few days

Fees: None

The next agency you’ll have to visit is the Philippine Health Insurance Corp., or PhilHealth. This agency provides health insurance for Filipinos, and is another mandatory right for company employees.

These are the documents you’ll need to submit to the nearest PhilHealth office of your principal address. Note that just like with the SSS, all of the PhilHealth forms here will need to be signed by the company’s president or an authorized corporate officer:

After submitting the documents, your registration will be processed after a couple of days. You will then receive your company’s PhilHealth Registration Certificate.

 

6. Register Your Business with PAG-IBIG

Time: A few days

Fees: None

The last agency you’ll have to register your company with is the Home Development Mutual Fund, or what’s more commonly known as the PAG-IBIG Fund. This fund allows employees to avail of various loans, such as housing loans and calamity loans.

The documents you’ll need to prepare for PAG-IBIG registration are:

The PAG-IBIG forms should be signed by your company’s president or an authorized corporate officer. Submit these documents to the PAG-IBIG office closest to your company’s principal address, and you will receive your PAG-IBIG Registration Certificate after a few days. 

Once you’ve accomplished all six of these steps, you’re now ready to do business as a fully registered corporation! Congratulations!

We hope this article was helpful. If you have any further questions, click here to chat with UNA, and check out the other articles of Unawa Explainer for more information on company incorporation.


Everything You Need to Know About Your Company’s Capital Structure

While filling out your company’s Articles of Incorporation, you’ll notice that Article 7 requires information about your company’s Authorized Capital Stock (ACS), while Article 8 requires you to further break this down to the amount of shares subscribed and paid by each shareholder. 

If this is your first time registering a business, you might find this confusing. What does Authorized Capital Stock mean? How is it different from the shares that are “subscribed” and “paid”? What are the values you should be putting in these blanks?

This article will answer all of those questions by taking a look at your company’s capital structure, and the differences between the three types of capital.

 

What is Authorized Capital Stock?

Authorized Capital Stock refers to the amount of shares your company is allowed to issue if the shares have par value and sell to investors for subscription. It is different from how many have already been issued or sold, as the ACS pertains to the maximum number of shares that the company is able to offer.

This means that the ACS is decided by the company itself, though it is by no means a random number. You’ll have to consider how much of your capital will be reserved for any potential investors where you can reach a favorable deal, so your capital must not be too low. However, a higher ACS means you’ll have much larger filing fees when registering with the SEC, so it must also not be too high.

 

What is Par Value?

You may have noticed that in filling out the details for ACS, you were asked about par value. This figure refers to the value of a single share of your company, which is determined by dividing the ACS by the number of shares your company offers. 

For example, Company X has an ACS of Php100 million distributed among one million shares. This means that the par value would be Php100 per share. 

Deciding on your company’s par value goes hand in hand with deciding on its ACS. However, most companies go with a par value of Php1 per share or Php100 per share, so that it’s easy to compute how much a certain number of shares is worth.

While the par value determines how much an investor has to pay in order to purchase or subscribe to one (1) share of the company, that same investor can choose to increase the price when they sell their shares to a third party or even the general public. In those cases, the par value will remain the same, and the selling price of the shares will be its market value. 

 

What is Subscribed Capital Stock?

While Authorized Capital Stock refers to the total amount of shares a company can sell, Subscribed Capital Stock refers to the shares that are issued to the company’s shareholders, which means that those shares already belong to them. Under the Revised Corporation Code, there is no more minimum requirement for Subscribed Capital Stock during incorporation. 

In the Articles of Incorporation, this is represented in Article 8 by the columns “Number of Shares Subscribed,” which varies depending on the shareholder, and “Amount Subscribed,” which refers to those shares multiplied by the par value. 

In the example above, if Company X has already issued 500,000 shares to their shareholders by the time they incorporate, this makes up the Subscribed Capital Stock of the company, which is worth Php50 million.

 

What is Paid-Up Capital Stock?

Just as Subscribed Capital Stock is a subset of Authorized Capital Stock, Paid-Up Capital Stock is a subset of Subscribed Capital Stock. As the name implies, this refers to the number of shares that have not only been issued to and sold to shareholders, but have also been paid for. If the company has already received the payment for shares that a certain investor has purchased, that will fall under Paid-Up Capital Stock.

In the Articles of Incorporation, this is represented in Article 8 by the column “Amount Paid,” which refers to how much each shareholder has paid for their shares. 

For Company X, if only half of the 500,000 shares have been paid for, then its Paid-Up Capital Stock would consist of 250,000 shares worth Php25 million. The founders of Company X will then have to disclose in their GIS that their Authorized Capital Stock is worth Php100 million, their Subscribed Capital Stock is worth Php50 million, and their Paid-Up Capital Stock is worth Php25 million.

 

A Footnote on Non-Stock Corporations

The different types of capital stock discussed above only apply to stock corporations, or companies that are designed to sell their shares. Non-stock corporations don’t have to break down their capital structure this way when registering with the SEC.

We hope this article was helpful. If you have any further questions, click here to chat with UNA, and check out the other articles of Unawa Explainer for more information on company incorporation.


Checklist of Requirements for Registering a Company With the SEC

Congratulations on taking the first step to building your startup! You have a long journey ahead of you, and it starts with getting your company registered with the Securities and Exchange Commission (SEC). 

The incorporation process of the Philippines involves a lot of documents and requirements, so we’d like to make it easier for you by creating a checklist of what you’ll need to prepare before you go to the SEC. We’ve also included the necessary links to formats of each requirement that you can fill up for your own company.

Here are the five documents you’ll need to prepare when incorporating with the SEC:

1. Articles of Incorporation

The Articles of Incorporation details everything there is to know about the company’s backbone. It contains basic information about the company, details about its founders and incorporators, as well as an overview of its shareholding structure. 

The format for the Articles of Incorporation can be found in Section 14 of the Revised Corporation Code. Your Articles of Incorporation must be notarized when submitted.

 

2. By-laws

A company’s by-laws detail the rules that govern the corporation, and are applied after the business has been incorporated. 

There is no specific format used to write the company’s by-laws, as these will depend on what type of company you’re incorporating. However, the SEC does list what the by-laws must contain in Section 46 of the Revised Corporation Code, which are:

  • The time, place and manner of calling and conducting regular or special meetings of the directors 
  • The time and manner of calling and conducting regular or special meetings and mode of notifying the stockholders thereof
  • The required quorum and the manner of voting in meetings of stockholders 
  • The modes by which a stockholder or director may attend meetings and cast their votes
  • The form for proxies of stockholders and the manner of voting them
  • The directors’ qualifications, duties and responsibilities, as well as the guidelines for setting the compensation of directors and officers
  • The time for holding the annual election of directors and the mode or manner of giving notice thereof
  • The manner of election or appointment and the term of office of all officers other than directors 
  • The penalties for violation of the by-laws
  • The manner of issuing stock certificates
  • Such other matters as may be necessary for the proper or convenient transaction of its corporate affairs for the promotion of good governance and anti-graft and corruption measures

 

3. Name Verification Slip

You’ll need to have a verified company name by the time you start the incorporation process. Unlike the rest of the requirements, this can be done online through the SEC’s Company Registration System, which uses an online verification tool. However, you’ll still need to validate your company name with the SEC’s Name Verification Unit after you complete the online process. 

There are several things you need to consider when choosing a name for your company. For a complete company naming guide, click here.

 

4. Treasurer’s Affidavit

The Treasurer’s Affidavit certifies that the company has met its capital requirements. More specifically, this document tells the SEC that the company’s paid-up capital has been paid to the Treasurer, who will oversee these funds for the company. Just like the Articles of Incorporation, this document must be notarized when submitted.

You can find a format for the treasurer’s affidavit by clicking here. Note that the formats in this document are no longer updated; for example, under the Revised Corporation Code, there is no longer a minimum subscription and paid-up capital during incorporation. So make sure to edit the format accordingly before having it notarized.

If you want to learn more about paid-up capital and the other types of capital that your company will deal with, check out our guide on capital structure.

 

5. Clearance from Other Government Agencies (for some companies)

Certain types of businesses require endorsements from other government agencies before they can register with the SEC. For example, medical clinics will need an endorsement from the Department of Health, while financial institutions will need to be certified by the Bangko Sentral ng Pilipinas. A full list of the types of businesses that need additional endorsements can be found in this document

In addition, some businesses will also need to retrieve clearances from other SEC departments. These businesses are also listed in the document linked above.

 

Ready to incorporate?

If you’ve completed, signed, and notarized all of the documents mentioned above, then you’re ready to move on to the next step, which is registering your company with the SEC! Check out this article for a step-by-step guide on what you need to do, how much you’ll need to pay, and how long the process will normally take.

We hope this article was helpful. If you have any further questions, click here to chat with UNA, and check out the other articles of Unawa Explainer for more information on company incorporation.


Step-by-step Guide to Incorporating a Company with the SEC

If you’re reading this article, chances are that you’re taking your first steps to turning your great idea into an actual company. Congratulations! Not a lot of people take the plunge, so we at Unawa are here to help you take care of your regulatory requirements so you can focus on growing your business.

The first real hurdle of every new startup’s journey is incorporating with the Securities and Exchange Commission (SEC). This involves a lot of time and effort, so we’ve laid out everything you need to know about registering your company in this article. Make sure to bookmark this while you’re going through the incorporation process!

Here’s how to incorporate your company with the SEC: 

1. Prepare all the documentary requirements

Time: As fast as 1 day, depending on how quickly you get the documents completely filled out, signed and notarized

Fees: Payment for notarization, varies depending on where it is notarized

Before actually going to the SEC office, there are several documents that you have to prepare that will be submitted for your application. These are:

  • Articles of Incorporation*
  • By-laws
  • Name Verification Slip
  • Treasurer’s Affidavit*
  • Clearance from Other Government Agencies (for certain companies)

*Need to be notarized when you submit to the SEC

The name verification process can partially be done online (for companies with five (5) incorporators), and the clearance from other government agencies will only apply for businesses in specific industries.

For more information on each of these requirements, check out this document checklist for SEC incorporation.

 

2. Get your company name validated and reserved 

Time: 2-3 days

Fees: Php100 reservation fee for 30 days

The Name Verification Slip listed above can only be obtained within an SEC office, which will be your next step for this process. You must go to the Name Reservation Unit at any SEC office to propose several business names, which will then be verified and validated by the agency. This will take around two to three days.

Once the SEC approves your company name, they will ask you to pay Php100 as a reservation fee. Your reservation is only valid for 30 days, which means that you will have to pay an additional fee should the entire company registration process take longer.

Want to make sure that your company name will be approved? Check out our company naming guide for more information on what the SEC considers when validating proposed company names.

 

3. Submit the documents and pay the necessary fees

Time: At least 2-3 weeks, depending on the examiner and the completeness of your documents

Fees: Minimum total of Php3,580, which includes the filing fee, by-laws fee, legal research fees, and the registration of the stock and transfer book

After getting your company’s name approved, you may now submit all of the documents listed in Step 1 to the SEC. The examiner who receives your documents will then have to review them prior to the issuance of the Certificate of Incorporation, which will take at least two to three weeks.

Once all of your documents have been approved, you will be asked to pay the necessary fees at the SEC cashier, which includes:

  • Registration Fee for By-laws, worth Php1,010
  • Filing Fee for Articles of Incorporation, which is worth ⅕ of 1% of the company’s authorized capital stock; however, this amount must not be less than Php2,000
  • Legal Research Fee, which is worth 1% of the Filing Fee outlined above

You will also be required to have a Stock and Transfer Book and have it registered with the SEC. This will require an additional fee of around Php550.

If you have the finalized value of your company’s authorized capital stock, you can compute for the total fees you will have to pay through the SEC’s registration calculator. Note that this calculator does not include the registration fee for the Stock and Transfer Book.

 

4. Obtain your Certificate of Incorporation

Time: 1 day

Fees: None

After your documents have been approved and paid for, and the SEC has approved your application for registration, you will be able to obtain your Certificate of Incorporation, which means that your startup is officially a registered company! This certificate contains your SEC Registration Number, which you will have to put in all of your future filings and disclosures.

You will also receive a Unified Registration Record, which contains all the important registration numbers you will be using when registering your business in other government agencies. Make sure to keep this in hand, as you will need this information in the near future.

 

5. Get the necessary requirements from other government agencies

Time: Varies

Fees: Varies

If you’ve reached this step, then congratulations, you have successfully registered your company with the SEC! However, there are several other steps you have to take before you can start operating as a legal entity, which involves paying the relevant tax on the original issuance of shares in the new corporation, going through several other government agencies and getting the necessary permits.

For a full step-by-step guide on what you have to do after registering with the SEC, click here.

We hope this article was helpful. If you have any further questions, click here to chat with UNA, and check out the other articles of Unawa Explainer for more information on company incorporation.


What’s in a (Company) Name?

As entrepreneurs, you’ve probably heard of the comparison that running a business is just like raising a baby. You have to put in a lot of time and effort to develop it and help it grow, until it becomes old enough to function with minimal supervision. 

Turns out, the comparison extends to the regulatory aspect. Just like a baby, the first thing you have to do to register your business is to think of its name.

To get the incorporation process started, the Securities and Exchange Commission (SEC) requires that you have a name for your business. Unfortunately, this doesn’t mean you can pick any name you want. There are several steps you have to take in order to ensure that your company name will be approved by the SEC, which we’ve outlined in this article.

 

Difference Between Corporate Name and Trade Name

Before we go through the step-by-step of securing your company’s name, we feel that it’s important to make the distinction between the two different names you’ll have to think for your company: its corporate name and its trade name.

The corporate name is what your company is officially called in the eyes of the SEC. If you see a company name that ends in “Inc.” or “Corp.”, it is most likely the corporate name, such as “Golden Arches Development Corp.” On the other hand, the trade name is what your company uses when it promotes and sells its offerings to the public. It’s what you’ll often see front-and-center in the company’s logo, storefront, or website, such as “McDonald’s.” 

In a sense, if your company were a baby, its corporate name is what’s written on the birth certificate, while its trade name functions as its nickname. For this article, we’ll focus on how to validate your company’s corporate name, as that is what the SEC requires for the incorporation process.

 

Which Company Names Are Allowed?

Just like other aspects of your startup, your company name also has to be approved by the SEC. All of the rules and regulations that the SEC follows in validating a company name are found in this Memorandum Circular, but we’ve outlined the most important points below:

  • It must not already be used by another company. Duplicate corporate names are not allowed.
  • It must not be similar to another existing corporate name. Similarity in this case would mean that a person can easily mistake one for the other when searching for either company.
  • It must not be used by a known international organization, or be similar to it, unless the company is a subsidiary of that organization.
  • It must not have any words that are only allowed for certain types of businesses. The word “bank”, for example, can only be used by businesses in the banking industry and under the governance of the Central Bank.

If you’re registering a company with at least five incorporators, you can use the SEC’s online Company Registration System (http://crs.sec.gov.ph/) to verify your name. Note that you will still have to validate your company name with an SEC officer even if you’ve accomplished this step.

 

Validating your name with the SEC

Once you’ve chosen your business name, you will have to go to an SEC office near you to have the name validated. You can have up to three business names validated at one time, so we suggest submitting three names to minimize your chances of having to go through the process again.

Validating your proposed business names will take around 2-3 days. If none of your proposed names get approved, you will have to go through the validation process again.

If the SEC validates your company name, you will then have to pay Php100 to reserve that name. The reservation only lasts for 30 days, so make sure you proceed to the next step of the incorporation process so you don’t have to renew your reservation. 

We hope this article was helpful. If you have any further questions, click here to chat with UNA, and check out the other articles of Unawa Explainer for more information on company incorporation.