Tags: start a non-profit, SEC registration, BIR requirements, mayor’s permit, non-profit organization Philippines, legal requirements for NGOs
Starting a non-profit organization in the Philippines is more than just a noble endeavor—it’s a structured process that requires legal compliance, strategic planning, and unwavering commitment to service. Whether you’re driven by a cause to uplift communities, provide free education, extend health care, or spread Christian values, your organization must be legally recognized to fully operate, receive funding, and sustain its programs.
In this comprehensive blog post, we’ll walk you through the step-by-step process of legally establishing a non-profit organization, beginning with SEC registration and ending with BIR compliance and continuing obligations. The discussion is designed to be logical, practical, and easy to follow—even for first-time founders.
Step 1: Clarify Your Vision, Mission, and Structure
Every non-profit begins with a vision—but that vision must be translated into a clear mission statement and operational framework.
Ask yourself:
- What is the primary purpose of the organization?
- Who is the intended beneficiary or target community?
- What kind of programs will you offer?
- Will you rely on donations, grants, or partnerships?
After solidifying your goals, decide on the structure:
- Most Philippine non-profits register as Non-Stock Corporations under the Securities and Exchange Commission (SEC).
- A minimum of five (5) incorporators is required, all of legal age, and the majority must be residents of the Philippines.
Pro Tip: Choose co-founders who share your values and are willing to be actively involved in compliance and governance.
Step 2: Register with the Securities and Exchange Commission (SEC)
The SEC is the primary agency for registering non-stock, non-profit corporations in the Philippines. Without SEC registration, your organization has no legal personality.
Required Documents:
- Name Verification Slip – Use SEC’s online CRS portal to check and reserve your organization’s name.
- Articles of Incorporation (AOI) – Must include your organization's purpose, non-profit nature, list of trustees, and capital structure.
- By-Laws – Covers how your organization will be governed, including elections, meetings, and duties of officers.
- Notarized Treasurer’s Affidavit – Confirms capital subscriptions.
- Affidavit of Acceptance of Trustees – Signed by each trustee.
- Proof of Official Address – Lease contract, deed of donation, or barangay certification.
- Community Tax Certificate (CTC) – For the Treasurer and other incorporators.
Procedure:
- Create an account on SEC’s Company Registration System (CRS).
- Upload your documents for pre-processing.
- Wait for email approval and payment instructions.
- Pay the fees via bank or e-wallet.
- Receive your Certificate of Incorporation, confirming legal status.
Important: Clearly state in your AOI that the organization is non-stock and any income will not be distributed to members but used solely for the mission.
Step 3: Secure Barangay Clearance
With your SEC registration in hand, proceed to the Barangay Hall of your organization’s office location.
Requirements:
- SEC Certificate and registration documents
- Lease contract or property proof
- Valid IDs of incorporators or representatives
- Sketch of location
Barangay officials may conduct an inspection and ask about your planned activities. Upon approval, you will receive your Barangay Clearance, which is required for your Mayor’s Permit application.
Step 4: Apply for a Mayor’s Permit (Business Permit)
Although non-profits are not engaged in for-profit activities, you must still obtain a Mayor’s Permit to legally operate in your city or municipality. This ensures local compliance and allows monitoring of your physical activities.
Requirements:
- Barangay Clearance
- SEC documents and AOI
- Lease contract or property documents
- Valid IDs
- Community Tax Certificate
- Fire Safety Inspection Certificate
- Sanitary Permit
- Zoning Clearance (from City Planning Office)
Steps:
- Visit the Business Permits and Licensing Office (BPLO).
- Submit documents and fill out the application form.
- Coordinate with local inspectors (fire, health, zoning).
- Pay applicable regulatory fees (minimal for non-profits).
- Receive your Mayor’s Permit.
Tip: Some LGUs offer One-Stop Shops for permit renewals and new registrations, especially in January.
Step 5: Register with the Bureau of Internal Revenue (BIR)
To legally issue official receipts, open bank accounts, and file taxes (even if exempt), you need to register your organization with the BIR.
Requirements:
- BIR Form 1903 (Application for Corporation Registration)
- SEC Certificate of Incorporation
- Articles of Incorporation and By-Laws
- Mayor’s Permit or application receipt
- Valid IDs of officers
- Sketch of office location
- Board Resolution appointing Treasurer
- Books of Accounts (for stamping)
Process:
- Go to the RDO (Revenue District Office) where your office is located.
- Submit all documents and pay the P500 Annual Registration Fee via BIR Form 0605.
- Attend taxpayer's briefing (some RDOs waive or conduct online).
- Register Books of Accounts (manual, loose-leaf, or computerized).
- Apply for Authority to Print (ATP) official receipts.
- Receive your Certificate of Registration (COR).
Step 6: Apply for Tax Exemption with the BIR
To avoid income tax, donor’s tax, and VAT on qualified transactions, apply for tax exemption. BIR requires a separate application.
Documents:
- BIR COR
- Audited Financial Statement (AFS) – within 30 days after fiscal year
- Sworn statement of non-profit character
- List of donors, board members, and beneficiaries
- Organizational chart and programs
- Certification from the head office stating that all income is used for its mission
Submit these to the BIR Legal Division or RDO. If approved, you will receive a Certificate of Tax Exemption.
Important: Any profit made must be plowed back into programs. Profit-sharing with members is strictly prohibited.
Step 7: Optional Accreditation and Additional Registrations
Depending on your activities, you may be required (or encouraged) to register with other national agencies:
- DSWD – If offering direct social services (e.g., shelters, food banks, elderly care).
- DepEd/CHED – If offering learning modules or formal education programs.
- TESDA – For training centers or vocational programs.
- PCNC (Philippine Council for NGO Certification) – To obtain Donee Institution status, allowing donors to claim deductions.
- DOH/DOLE – If operating health-related services or employing staff in specialized sectors.
These registrations improve your credibility and may open doors for grants, partnerships, and institutional donors.
Step 8: Maintain Compliance Annually
After launching your non-profit, ongoing compliance is critical to maintaining your organization’s good standing.
Annual Requirements:
- SEC: General Information Sheet (GIS) and Audited Financial Statement (AFS)
- BIR: File tax returns (1702-EX), submit annual financial statements, renew ATP and books if needed
- LGU: Renew Mayor’s Permit and Barangay Clearance yearly
- DSWD/DepEd/PCNC: Submit annual reports (if registered)
Non-compliance Consequences:
- Penalties and surcharges
- Revocation of SEC license
- BIR audits and investigations
- Disqualification from grants and donors
Tip: Keep digital and physical records. Designate a Compliance Officer or engage a licensed accountant familiar with non-profit rules.
Conclusion
Establishing a non-profit organization in the Philippines may seem overwhelming at first, but each legal step is a necessary part of building something that lasts. Proper registration with the SEC, securing local government permits, and registering with the BIR ensures your organization is transparent, trustworthy, and empowered to fully carry out its mission.
Remember, non-profit work is not just about passion—it’s also about stewardship, accountability, and responsibility. By following this process from start to finish, you not only honor your cause but also the law, your donors, and the people you’re called to serve.
So take the leap—from vision to validation—and change lives legally, ethically, and with purpose.
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