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How to Register a Pawnshop Business in the Philippines

Sat, 07 Dec 2013 07:33:37 +0100

How to Register a Pawnshop Business in the Philippines

Pawnshops help Filipinos to have an additional source of credit, especially the small borrowers who can’t obtain loans from banks, credit cooperatives, lending companies, and other financial institutions in the country. For people who need instant money to satisfy their emergency needs, a pawnshop can help them get a quick loan without a background check requirement as long as they have personal properties to deposit as collaterals, such as fine jewelries and electronic items. For pawnshops or pawnbrokers, this collateral requirement makes their lending business quite secure while earning interest income from the loans they provide to clients.

Establishing and operating a pawnshop can be a profitable business. But since this type of business involves financing activities, its establishment and operation are strictly regulated by the government to protect financial consumers. Pawnshops are govern by the Presidential Decree No. 114 known as the “Pawnshop Regulation Act” (as amended) which was signed and approved by the late President Ferdinand Marcos on January 29, 1973.

The regulation and supervision of pawnshops in the Philippines are outlined in the “Revised Manual of Regulations for Non-Bank Financial Institutions – Pawnshops” issued by the Bangko Sentral ng Pilipinas (BSP), as amended by BSP Circular No. 711 on January, 28, 2011 and other future amendments.

If you are planning to register and start a pawnshop business in the Philippines, here are some important guidelines to help you:

What is a pawnshop?

A pawnshop, pawnbrokerage or pawnbroker refers to a person or entity engaged in the business of lending money on personal property delivered as security for loans (Section 3 of PD No. 114). By regulation it has to be duly organized and licensed to have the power to engage in the business of lending money on the security of personal property (Section 4101P.1 of MORNBFI-P).

What form of business is allowed to establish a pawnshop?

A pawnshop may be established as a single proprietorship, a partnership or a corporation. However, only Filipino citizens may establish and own a pawnshop organized as a single proprietorship. A pawnshop established as a single proprietorship by non-Filipino owner prior to January 29, 1973 may continue as such during the lifetime of the registered owner (Section 4101P.2 of MORNBFI-P).

If a pawnshop is organized as a partnership, at least seventy percent (70%) of its capital shall be owned by Filipino citizens. Pawnshops established as partnerships prior to January 29, 1973, with non-Filipino partners whose aggregate holdings amount to more than thirty percent (30%) of the capital may retain the percentage of their aggregate holdings as of January 29, 1973, and said percentage shall not be increased, but may be reduced, and once reduced shall not be increased thereafter beyond thirty percent (30%) of the capital stock of such pawnshop.

In the case of a pawnshop organized as a corporation, at least seventy percent (70%) of the voting stock therein shall be owned by citizens of the Philippines, or if there be no capital stock, at least seventy percent (70%) of the members entitled to vote shall be citizens of the Philippines.

How to register a pawnshop in the Philippines?

Any person or entity desiring to start a pawnshop in the Philippines should register with the Department of Trade and Industry (DTI) for a single proprietorship form of business or with the Security and exchange Commission (SEC) for a partnership and corporation for of business. Please read out posts on how to register a business trade name with the DTI and how to register a corporation with SEC.

For pawnshops with foreign equity participation, they have to register with the Board of Investments (BOI).

The business name of a pawnshop that is registered with the DTI or the SEC, should include the word “pawnshop” to reflect the nature of business it is engaged in. As a general rule, the business name appearing in the Certificate of Registration of DTI or SEC shall be used consistently in the pawnshop’s signage and in all documents including pawn tickets, official receipts, stationery, and other similar documents of the pawnshop.

After registering with the DTI for single proprietorship or SEC for partnership and corporation, they should also register and secure a business license from the city or municipality where the pawnshop is to be established and operated. Take note that the requirements and procedures for securing a Mayor’s business permit may vary in each city or municipality. Please read our post on how to secure a Mayor’s Business Permit in the Philippines.

Aside from registering with the DTI or SEC and securing a Mayor’s Business Permit, pawnshops must also be registered with the Bureau of Internal Revenue (BIR) to file and pay their taxes. Please read our post on how to register a business with the BIR. Moreover, they may also be required to register with other government offices aside from the previously mentioned above. Please read our post on how to register a business in the Philippines.

Before a pawnshop can commence actual business operations, it must be first registered with the BSP. To register a pawnshop with the BSP, it should submit to the BSP an “Information Sheet” on the entity (using BSP-prescribed form for pawnshops) duly accomplished by the proprietor/managing partner/president under oath that shall be the basis for the issuance by the BSP of an Acknowledgement of Registration (AOR). The Information Sheet shall be accompanied by the following documents:

1. Copy of Certificate of Registration of Business Name with the Department of Trade and Industry (DTI), in case of a sole proprietorship or Articles of Partnership/Incorporation and By-Laws duly registered with the Securities and Exchange Commission (SEC), in the case of a partnership or a corporation, which Article shall indicate that the primary purpose of the partnership/corporation is to engage in the business of a pawnshop or a pawnbroker.

2. Copy of City/municipal license/business license/mayor’s permit for the current period.

3. Personal Data Sheet (using BSP-prescribed form for pawnshops) with passport size picture duly accomplished by the proprietor or partners or directors, president and manager or officer-in-charge of the head office.

4. Duly notarized authorization to conduct background investigation from the proprietor or partners or directors, president and proposed manager or officer-in-charge.

5. Certification from any banking institution on the amount deposited for pawnshop capitalization indicating the outstanding balance and owner of the account.

6. Sample pawn ticket

7. Copy of NBI Clearance of proprietor or partner or incorporators, directors, president and proposed manager or officer-in-charge.

8. Reproduction of signage to be used by the pawnshop

9. Notarized special power of attorney authorizing a person/entity to apply for registration in behalf of the proprietor/partnership/corporation. In the case of a corporate applicant, a certified true copy of the board resolution authorizing the person or entity shall likewise be submitted.

10. Certification from the president/managing partner/proprietor that the proprietor or partners or incorporators, director, president and proposed manager or officer-in-charge have attended the Anti-Money Laundering Act seminar and pawnshop regulation briefing conducted by the Anti-Money Laundering Council Secretariat and the BSP, respectively.

11. Corporate pawnshops with total resources of at least P50 million shall submit to the BSP a notarized certification that it has complied with the relevant requirements of the SEC on corporate governance.

12. For applications submitted through BSP Regional Offices or Branches, photocopy of Official Receipt as proof of payment of P1,000 processing fee.

As a prerequisite for the issuance by the BSP of the AOR, the proprietor, partner, director, president as well as manager or officer-in-charge of the head office and branch shall have attended the: (A) Briefing on Pawnshop Regulations conducted by the BSP or any accredited service provider; and (B) seminar on the Anti-Money Laundering Act as prescribed by the BSP.

Every pawnshop head office shall pay a one-time processing fee of P1,000 for the initial registration, and P500.00 annual fee upon approval of application for registration. Thereafter, the annual fee shall be paid not later than March 31 of every year.

What is the capitalization requirement for a pawnshop?

Section 4106P of the MORNBFI-P, as amended, stated that every pawnshop shall have a minimum paid-in capital of P100,000.

A pawnshop’s paid-in capital may be in the form of:

a. Cash;

b. Tangible properties, including real estate and improvements thereon; and

c. A combination of cash and tangible properties.

Tangible properties shall be limited to those that are necessary for the conduct of the pawnshop business. They may be valued at fair value which is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arm’s length transaction. The fair value of land and buildings is usually determined from market-based evidence by appraisal that is normally undertaken by professionally qualified appraisers.

The value of the tangible properties contributed as capital shall not exceed twenty-five percent (25%) of said paid-capital and surplus/accumulated surplus. For pawnshops existing as at 29 January 1973 whose value of properties exceed the prescribed ratio, such percentage may be retained or reduced but shall not be increased thereafter. Should the ratio, on the other hand, fall below the prescribed level, it may be increased but not beyond twenty-five percent (25%).

Learn more

To learn more about registering a pawnshop with the BSP, you can visit their official website to read more, visit their office address to inquire personally or contact them through the following phone number and email address.

Bangko Sentral ng Pilipinas
A. Mabini St. cor. P. Ocampo St.,
Malate Manila, Philippines 1004
Tel. No. : (632) 708.77.01
E-mail: bspmail@bsp.gov.ph

Aside from registration, there are also many other important things to remember when establishing and operating a pawnshop, such as the binding of accountable officers with reputable insurance or surety to safeguard the assets of the pawnshop, qualification requirement of owners and officers, establishment of branch offices, adoption of acceptable accounting system and standards, and reportorial requirements to be submitted to the BSP. To learn more, please read also in full the following references for registering a pawnshop business with the BSP:

Reference:
Revised Manual of Regulations for Non-Bank Financial Institutions – Pawnshops
BSP CircularNo.711 Series of 2011 – Amendments to the MOR for Pawnshops
PD No. 114 – “Pawnshop Regulation Act”

21 quotes

Sat, 07 Dec 2013 05:03:42 +0100

21 quotes will help you lift up your spirit again and live a stronger and better life.

1. “That which does not kill us makes us stronger.“ – Friedrich Nietzsche

2. “In order to rise from its own ashes, a Phoenix first must burn.” - Octavia E. Butler

3. “Never give up! So many people can be responsible for your Success, but only you are responsible for your failure.” - Unknown.

4. “When life knocks you down, try to land on your back. Because if you can look up, you can get up. Let your reason get you back up. “ - Les Brown

5. “The harder you fall, the higher you bounce. “ - Unknown

6. “It is never too late to be what you might have been.” - George Eliot

7. “A setback is a setup for a comeback” - T.D. Jakes

8. “The pain you feel today is the strength you feel tomorrow. “ - Unknown

9. “Let us rise up and be thankful, for if we didn’t learn a lot today, at least we learned a little, and if we didn’t learn a little, at least we didn’t get sick, and if we got sick, at least we didn’t die; so, let us all be thankful.” - Buddha

10. “Being defeated is often a temporary condition. Giving up is what makes it permanent.” - Marilyn Vos Savant

11. “We must be willing to let go of the life we planned so as to have the life that is waiting for us.” - Joseph Campbell

12. “When the world pushes you to your knees, you are in a perfect position to pray. “- Unknown

13. “What would life be if we had no courage to attempt anything?” - Vincent van Gogh

14. “When you feel like giving up, remember why you held on for so long in the first place. “ - Unknown

15. “Waiting to develop courage is just another form of procrastination. The most successful people take action while they’re afraid! “ - Unknown

16. “Challenges are what make life interesting. Overcoming them is what makes life meaningful.” - Joshua J. Marine

17. “A heart is a muscle… and what do muscles do when they are torn? They grow back STRONGER!” - Unknown

18. “Our greatest weakness lies in giving up. The most certain way to succeed is always to try just one more time.” - Thomas A. Edison

19. “Remember that guy that gave up? Neither does anybody else. ” - Unknown

20. “The world ain’t all sunshine and rainbows. It’s a very mean and nasty place and I don’t care how tough you are it will beat you to your knees and keep you there permanently if you let it. You, me, or nobody is gonna hit as hard as life. But it ain’t about how hard you’re hit. It’s about how hard you can get it and keep moving forward. How much you can take and keep moving forward. That’s how winning is done!” v Rocky Balboa

21. “Your faith will be put to the test. You know that when that happens it will produce in you the strength to continue.” -James 1:3 (NIRV)

PRC Licensing requirements for real estate broker

Fri, 06 Dec 2013 09:58:03 +0100

Are you thinking of becoming a Philippine real estate broker? Here are some some steps on how to become one. If you are serious about doing the business legitimately, you may want to consider taking the Comprehensive Real Estate Seminar and Review (CRESAR , a.k.a. CRES) classes and testing now, before the first batch of BS Real Estate Management (REM) graduates in the next couple of years. After they do, all those interested to take the licensing exam in the future need to take the BS REM course, as required by Professional Regulation Commission (PRC).

Stage One – Sign up with an accredited real estate service training provider and take the required 120 credit units of continuing professional education (CPE). Have your requirements checked to ensure that you’re eligible to take the exam.

You can visit the Professional Regulation Commission of the Philippines (PRC) to download the schedule for the 2013 exams. The next real estate brokers exam is on March 17, 2013.

Deadline for the filing of application is by FEBRUARY 25, 2013.

Stage Two – Prepare all your documents in advance (now is a good time, so you don’t cram!). Here’s a list of the requirements as per the Real Estate Service Act (RESA) needed to take the exam:

” Section 14. Qualifications of Applicants for Examinations

In order to be admitted to the licensure examination for real estate service, a candidate at the time of filing his/her application, shall establish to the satisfaction of the Board that he/she possesses the following qualifications:

(A) Citizen of the Philippines,

(B) A holder of relevant bachelor’s degree from a state university or college, or other educational institution duly recognized by CHED: Provided, That he/she has completed at least one hundred twenty (120) credit units of real estate subjects and training from accredited service providers, as may be determined by the Board; Provided, further, that as soon as a course leading to Bachelor’s Degree in Real Estate Service is implemented by the CHED, the Board shall make this course a requirement for taking the licensure examination,

(C) Is of good moral character, must not have been convicted of any crime involving moral turpitude,

(D) An applicant for the licensure examination for real estate consultants must show proof that he/she has at least ten (10) years experience as a licensed estate broker, or an assessor, or as a bank, or institutional appraiser, or an employed person performing real property valuation, or at least five (5) years experience as a licensed real estate appraiser.

All applicants for examination shall be filed with the Board who shall assess and approve said applications and issue to the qualified examinees the corresponding permits or notices of admission to take such examination upon submission of the following documents:

1. Original and photocopy of Birth Certificate or Certificate of Live Birth (NSO) and/or valid Philippine passport, or any other proof of citizenship,

2. Original and photocopy of transcript of records and/or diploma with scanned picture,

3. Original and photocopy of notarized certification by employer of his/her years of experience or pre-requisite Certificate of Registration (COR) and/or Professional Identification Card (PIC) or DTI license (for real estate consultants).

4. Original and photocopy of NBI clearance,

5. Original and photocopy of duly notarized accredited seminar and/or training certificate,

6. Community tax certificate,

7. Four (4) colored passport size pictures with white background and complete nametag and other documents in accordance with the requirements set by the Commission.“

After this, collate the requirements, visit PRC and pay the required fees.

Stage Three - Take note of the PRC schedule of the REB exam nearest your place

Exam will be held in testing centers in:

Manila
Baguio
Cagayan De Oro
Cebu
Davao
Iloilo
Legaspi
Lucena

According to the Implementing Rules and Regulations of RESA, or RA 9646 (Rule III Section 13), the Real Estate Broker’s exam will cover the following topics:

For Real Estate Brokers:

1. Fundamentals of property ownership;
2. Code of ethics and responsibilities;
3. Legal requirements for real estate practice;
4. Real estate brokerage practice;
5. Subdivision development;
6. Condominium concept and other types of real estate holdings;
7. Real estate finance and economics;
8. Basic principles of ecology;
9. Urban and rural land use;
10. Planning, development and zoning;
11. Legal aspect of sale, mortgage and lease;
12. Documentation and registration;
13. Real property laws and taxation; and
14. Any other related subjects as may be determined by the Board.

How to become a real estate broker?

Fri, 06 Dec 2013 09:07:27 +0100

Instructions

1. Complete the necessary credits to obtain a Real Estate Broker License. You must have 144 units (credits) of college education or obtain 72 units if you have already been a licensed real estate salesperson for four years. You will also need a report of rating for the Licensed Real Estate Broker examination, which is a simple report showing whether you passed or failed the exam and what your final score is.

2. Apply for a Real Estate Broker's License at the Department of Trade and Industry-National Capital Region. Fill out an application form with four 1x1 pictures. You will need clearance from the Regional Trial Court, National Bureau of Investigation or the City or Municipal Clerk of Court. Applicants must reside or hold office for one year to the date of application. You will need to show proof of education or 72 units (credits) with four years' experience as a licensed salesman. You will need a surety bond to protect you, the broker, against loss in case the terms of a contract are not filled and the broker's company assumes liability for nonperformance (see Resources). New brokers must pay the necessary fees for a Department of Trade and Industry License, as well as for Housing and Land Use Regulatory Board registration fees (see Resources).

3. Apply for a business name at the Department of Trade and Industry. This is where you will register if your broker business is a single proprietorship to receive a certificate of registration for your business name. However, if your broker company is a partnership or a corporation, you will need to register at the Securities and Exchange Commission, and they will issue you a certificate of registration (see Resources).

4. Register at the Housing Land Use Regulatory Board to sell low-cost housing properties and condominium projects. To register, you need to download the application form from their website (see Resources). You will need a copy of the application form, 1 x 1 ID pictures, an updated Real Estate Broker Certificate, Surety Bond Proof of Education Attainment or the latest National Bureau of Investigation or Regional Trial Court clearance Cash Bond and the processing fee (see Resources).

5. Register at the National Association of Realtors. The National Association of Realtors has a huge database of educational tools to offer real estate professionals for advancement in the real estate industry, including educational programs and certifications and free marketing tools. Some educational certification programs include Certified Commercial Investment Member/CCIM, Certified Real Estate Brokerage Manager/CRB, Certified International Property Specialist/CIPS, and much more. These programs assist you in increasing your skills, proficiency and knowledge.