LATH311 Midterm Reviewer PDF

lOMoARcPSD|45155650 LATH311 Midterm Reviewer Legal Aspects of Tourism and Hospitality (Our Lady of Fatima University) Scan to open on Studocu Studocu is not sponsored or endorsed by any college or university...

lOMoARcPSD|45155650 LATH311 Midterm Reviewer Legal Aspects of Tourism and Hospitality (Our Lady of Fatima University) Scan to open on Studocu Studocu is not sponsored or endorsed by any college or university Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 M7.1: The Tourism Act of 2009 April Joy Mauricio TOURISM ACT OF 2009 Section 2: OBJECTIVES OF THE TOURISM ACT OF 2009 Approved by former President Gloria Macapagal- Arroyo on May 12, 2009; (a) Develop a national tourism action plan and work for its adoption and implementation by national and local Published in the Official Gazette on July 13, 2009; governments; Approved by Congress as SENATE BILL 2213/HOUSE BILL 5229, entitled: (b) Encourage activities and programs which promote tourism awareness, preserve the country’s diverse cultures and heritage, and instill a sense of history and a culture of tourism among the youth and the populace; “AN ACT DECLARING A NATIONAL POLICY FOR (c) All things being equal, grant preferential treatment to TOURISM AS AN ENGINE OF INVESTMENT, the employment of Filipino nationals in tourism-related EMPLOYMENT, GROWTH AND NATIONAL enterprises; DEVELOPMENT AND STRENGTHENING THE DOT, ITS ATTACHED AGENCIES, TO EFFECTIVELY IMPLEMENT (d) Provide full government assistance by way of THAT POLICY…” competitive investment incentives, long-term development fund and other financing schemes extended to tourism-related investments; (e) Ensure the right of the people to a balanced and In 1973, the Philippine government recognized the healthful ecology through the promotion of activities need to realign government efforts towards trade geared towards environmental protection, conservation promotion and tourism development for greater and restoration; effectiveness and in order to tap the tourist industry as a resource base toward an accelerated (f) Develop responsible tourism as a strategy for socioeconomic development in the Philippines. Thus, environmentally sound and community participatory the Department of Tourism (DOT) was created. tourism programs, enlisting the participation of local communities, including indigenous peoples, in conserving bio-physical and cultural diversity, promoting environmental understanding and education,...; (g) Promote and ensure the convention-handling HIGHLIGHTS OF TOURISM capability of the country as a world-class convention ACT OF 2009 (R.A. NO. 9593) center; Roles and Functions of DOT Pursuant to R.A. 9593 (h) Maintain international standards of excellence in all DECLARED POLICY: Tourism is an indispensable tourism facilities and services, and promote the country element of the national economy and an industry of as a safe and wholesome tourist destination; national interest and importance; harnessed as an (i) Support the establishment of Tourism Enterprise engine of socio-economic growth/cultural affirmation, Zones (TEZs), which will provide the necessary vehicle to to generate investment, foreign exchange, coordinate actions of the public and private sectors to employment and to mold national pride. address development barriers, attract and focus Under this law, the PTA is reorganized as TIEZA while investment on specific geographic areas and upgrade the PCVC is reorganized as TPB. product and service quality Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 Section 3: DEFINITION OF TERMS (i) SUSTAINABLE TOURISM DEVELOPMENT — the management of all resources that meet the needs of (a) ACCREDITION — a certification issued by the tourists and host regions while protecting the Department to a tourism enterprise that officially opportunities for the future, in such a way that economic, recognizes it as having complied with the minimum social and aesthetic needs can be fulfilled while standards for the operation of tourism facilities and maintaining cultural integrity, essential ecological services. processes, biological diversity and life support systems. (b) BROWNFIELD TOURISM ZONE — an area with (j) TOURISM DEVELOPMENT PLAN — a strategic existing infrastructure or development as determined by framework that provides for the orderly and rational the TIEZA development of the tourism sector within a given area, (c) CULTURE OF TOURISM — a sustainable tourism providing the policy and approaches to develop, promote development principle that binds national and local and integrate various programs and projects such as, but governments, local communities, private sector and not limited to, accessibility, including infrastructure and stakeholders to work together in creating pride of place transportation; investments and businesses; environment; and sustaining a tourist friendly destination. cultural heritage; tourism products; marketing; human resources development; community development, among (d) ECOTOURISM — a form of sustainable tourism within others. a natural and cultural heritage area where community participation, protection and management of natural resources, culture and indigenous knowledge and practices, environmental education and ethics, as well as economic benefits are fostered and pursued for the enrichment of host communities and the satisfaction of MANDATORY ACCREDITATION visitors. DOT shall prescribe and regulate standards for the (e) EXECUTUVE MANAGEMENT COMMITTEE — a policy operation of tourism business. and program coordinating and monitoring body composed Primary tourism enterprises shall be required to of the Department Secretary and the heads of attached periodically obtain accreditation. agencies and corporations. Accreditation for Secondary tourism Enterprises (f) GREENFIELD TOURISM ZONE — a new or pioneer shall be voluntary. development as determined by the TIEZA. (g) PRIMARY TOURISM ENTERPRISES — facilities and services that are directly related to tourism such as, but not limited to, travel and tour services: inbound travel agencies and tour operators, and tour guides; tourist LOCAL TOURISM DEVELOPMENT transport services whether for land, sea and air transport PLANS/TOURISM OFFICERS exclusively or majority of its seats are for tourist use, LGU’s shall prepare local tourism development plans, including airport taxis and tourist drivers; accommodation land use, infrastructure development and standards establishments; MICE organizers and facilities; sports and for tourism enterprises. recreational facilities such as, but not limited to, dive shops, amusement parks, adventure and ecotourism Every province, city or municipality which has a facilities;... significant tourism industry shall have permanent position for a tourism officer and must also establish a (h) SECONDARY TOURISM ENTERPRISES — facilities tourist information and assistance center. and services that may be related to tourism such as, but not limited to, restaurants; specialty shops and department stores; sports facilities and recreational centers such as, museums and galleries, theme parks, zoos; health and wellness facilities agri-tourism farms and facilities; tourism training centers or institutes Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 THE DOT AND ITS OFFICE OF TOURISM STANDARDS AND REGULATIONS — shall formulate and enforce ATTACHED AGENCIES standards for the operation and maintenance of The Department shall be the primary planning, tourism enterprises, prescribing minimum and programming, coordinating, implementing and progressive levels of operating quality and efficiency regulatory government agency in the development consistent with local and international standards; and promotion of the tourism industry, both domestic OFFICE OF ADMINISTRATIVE AFFAIRS — shall advise and international, in coordination with its attached and assist the Secretary on all matters pertaining to agencies and other government instrumentalities. personnel and general services administration; It shall instill in the Filipino the industry’s fundamental importance in the generation of employment, investment and foreign exchange. STRUCTURE OF DOT OFFICE OF THE SECRETARY — The Office of the Secretary shall consist of the Secretary and his or her immediate staff. OFFICE OF THE UNDERSECRETARY FOR TOURISM DEVELOPMENT — shall be responsible for the Office of Product Development, the Office of Tourism Development Planning, Research and Information TOURISM PROMOTIONS BOARD (TPB) Management and the Office of Industry Manpower The Philippine Convention and Visitors Corporation Development. is reorganized as the Tourism Promotions Board (TPB), also to be referred to in this Rules as the OFFICE OF PRODUCT DEVELOPMENT — shall Philippine Tourism Promotions Board (PTPB). conceptualize and develop new products which will The PTPB shall be responsible for marketing and enhance tourism sites and facilities; promoting the Philippines domestically and internationally as a major global tourism destination, OFFICE OF TOURISM DEVELOPMENT PLANNING, highlighting the uniqueness and assisting the RESEARCH AND INFORMATION MANAGEMENT — development of its tourism products and services, shall prepare a National Tourism Development Plan with the end in view of increasing tourist arrivals and identifying geographic areas with potential tourism tourism investments; marketing the Philippines as a value and outlining approaches to developing such major Meetings, Incentives, Conventions and areas; Formulate policies and programs for global Exhibitions (MICE) destination; competitiveness and national tourism development, attracting, promoting, facilitating and servicing large and approve local government tourism development scale events, international fairs and conventions, plans; congresses, sports competitions, expositions and the like; ensuring the regular local and international OFFICE OF INDUSTRY MANPOWER DEVELOPMENT advertisement of the country’s major tourism — shall develop training modules and conduct multi- destinations and other tourism products, including skills training seminars, including continuing education TEZs; and providing incentives to travel agencies, tour programs for the industry manpower, in coordination operators, wholesalers and investors abroad capable with appropriate government agencies and tourism of drawing a sizeable number of tourists and tourism enterprises and associations, thereby upgrading their investments to the country. quality, competence and excellence in the delivery of tourism services; Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 PHILIPPINE TOURISM AUTHORITY (PTA) The Philippine Tourism Authority (PTA) created e) It is in a strategic location such as to catalyze the pursuant to Presidential Decree No. 189, as amended socioeconomic development of neighboring by Presidential Decree No. 564, is hereby reorganized communities. as the Tourism Infrastructure and Enterprise Zone Authority (TIEZA), attached to the Department of Tourism for purposes of policy and program DUTY FREE PHILIPPINES CORPORATION (DFPC) coordination. The DFPC is a corporate body created pursuant to Chapter VI of the Act which has exclusive authority to TOURISM INFRASTRUCTURE AND ENTERPRISE operate or franchise out stores and shops that would ZONE AUTHORITY (TIEZA) sell among others, duty- and tax-free merchandise, goods and articles to service the requirements of The Tourism Infrastructure and Enterprise Zone international tourists and travelers. Authority (TIEZA) shall: designate, regulate and supervise the Tourism Enterprise Zones (TEZs) established under the Act; develop, manage, and INTRAMUROS ADMINISTRATION (IA) supervise tourism infrastructure projects in the IA is a National Government Agency attached to the country; supervise and regulate the cultural, economic Department of Tourism of the Philippines. Under and environmentally sustainable development of TEZs Presidential Decree No. 1616, IA is responsible for the towards the primary objective of encouraging orderly restoration and development of Intramuros as investments therein; a monument to the Hispanic period of Philippine history. Designation of Tourism Enterprise Zones The mission of IA is to protect and conserve the historical and cultural value and significance of The TIEZA shall, in coordination with appropriate Intramuros while advancing and guiding urban authorities and neighboring cities and municipalities, development within, and contributing to the conduct a survey of the physical and natural assets and strengthening of the Filipino’s national identity and potentials of the Tourism Enterprise Zone (TEZ) areas sense of belonging and pride. under its jurisdiction. IA envisions Intramuros as a model urban site of national historical and cultural heritage, sustaining General Criteria for the Designation of TEZ people and life systems within, and contributing to national cultural and socio-economic progress. a) The area is capable of being defined into one contiguous territory; b) It has historical and cultural significance, environmental beauty, or existing or potential integrated leisure facilities within its bounds or within reasonable distances from it; c) It has, or it may have, strategic access through transportation infrastructure, and reasonable connection with utilities infrastructure systems; d) It is sufficient in size, such that it may be further utilized for bringing in new investments in tourism establishments and services; and Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 NATIONAL PARKS DEVELOPMENT COMMITTEE Signed by former President Ferdinand E. Marcos on (NPDC) 04 July 1985. As an attached agency of the DOT, the National Parks On 31 August 2001, through Executive Order No. 26, Development Committee is tasked to develop, the control and supervision of PRA was transferred to preserve, and manage Rizal and Paco Parks in Manila the Board of Investments (BOI) – Department of Trade and other parks that may be assigned to NPDC. and Industry from the Office of the President. Its mission is to develop, preserve, and manage Rizal On 12 May 2009, Republic Act No. 9593, otherwise Park and Paco Park to ensure the general public’s known as Tourism Act of 2009, PRA became an appreciation of the Park’s facilities and activities. In attached agency of the Department of Tourism and particular, it shall: placed under the supervision of the Secretary. PRA is mandated to develop and promote the Philippines as retirement haven as a means of  Provide the general public with access to and accelerating the social and economic development of enjoyment of an open park through well managed the country, strengthening its foreign exchange and maintained facilities and structures, well- position at the same time providing further best developed environment through landscape design quality of life to the targeted retirees in a most and plant ornaments, while ensuring the attractive package. orderliness of the Parks as well as the safety and security of the park-goers NAYONG PILIPINO FOUNDATION (NPF) The Nayong Pilipino Foundation Inc. (NPFI) was  Showcase national heritage through programs established in 1969 with a primary focus on promoting aimed at promoting Filipino arts, culture and research development projects in social sciences, tradition, and exchanges with other nations, humanities, and related fields. It was registered as a conceptualize events and activities of socio- non-stock, non-profit corporation in May 1969. culture-economic-physiological impact such as performances and programs in order to develop President Ferdinand Marcos issued Presidential national consciousness Decree No. 37 in November 1972, officially establishing the Nayong Pilipino Foundation. The foundation was initially given a 45.9-hectare land in  Develop new parks Pasay, part of which became the Nayong Pilipino Cultural Park.  Develop conducive atmosphere consonant to preservation of historical significance through partnership with the community and NGOs PURPOSE OF NPF  To promote, encourage, espouse and/or initiate  Ensure viability of NPDC’s financial position in research and development projects on social support of NPDC’s goals and objectives sciences and humanities and related fields;  Establish inter-agency linkages to achieve NPDC’s  To formulate a comprehensive social welfare thrusts and programs program for the upliftment, improvement and amelioration of the social and economic conditions PHILIPPINE RETIREMENT AUTHORITY (PRA) of the unfortunate destitute members of our society; The Philippine Retirement Authority (PRA) is a government owned and controlled corporation created by virtue of Executive Order No. 1037 Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650  To encourage and facilitate the active participation PHILIPPINE COMMISSION ON SPORTS SCUBA of the domestic and foreign sectors in furnishing DIVING (PCSSD) financial, technical and other forms of assistance The Philippine Commission on the Promotion and for the Foundation’s social welfare programs; Development of Sports SCUBA Diving (PCSSD) was established by Former President Ferdinand E. Marcos  To promote and encourage the dissemination of through Letter of Instruction No. 745 issued on the results of its researches and studies in social September 29, 1978. sciences and humanities; The Commission's key mandates include promoting programs to develop the Philippines as a premier  To establish, maintain scholarships or professional diving destination in Asia, formulating rules and safety chairs in order to foster, promote and encourage standards for sports SCUBA diving, conducting the study and improvement of fundamental studies to incentivize private sector involvement in research and developmental work in the fields of SCUBA diving tourism, and implementing marine social sciences or humanities; conservation programs in high-value tourist areas. Additionally, the PCSSD's role was reinforced by  To establish parks and recreation centers for the Republic Act 9593, also known as the Tourism Policy promotion of tourism in this country; and Act, which placed the PCSSD under the Department of Tourism.  To construct, improve, enlarge or equip or to This act further emphasized the need for cause the building, improvement, enlarging or standardizing dive rules, regulating SCUBA sports and equipping of buildings, libraries, laboratories, technical diving, and coordinating closely with the workshops or other educational accessories, Office of Tourism Standards and Regulations for required for scientific research. accreditation. Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 M7.2: Government Agencies Involved in Tourism April Joy Mauricio SUPPORT SERVICES The SEC provides support services including financial management, human resource development and administration, and economic research and information services, all of which are essential to facilitating and enhancing the efficiency of its operations. BOARD OF INVESTMENTS (BOI) The Philippine Board of Investments (BOI), an SECURITIES AND EXCHANGE COMMISSION (SEC) attached agency of Department of Trade and Industry (DTI), is the lead government agency responsible for The SEC is the government agency responsible for the the promotion of investments in the Philippines. registration, licensing, regulation and supervision of BOI assists Filipino and foreign investors to venture all corporations and partnerships organized in the and prosper in desirable areas of economic activities. Philippines, including foreign corporations licensed to engage in business or to establish branch offices in Investors are welcome to experience the potentials of the Philippines. the booming Philippine Industry sectors. The Securities and Exchange Commission (SEC) 4 Operating Groups performs four core functions: INVESTMENT PROMOTIONS GROUP (IPG) CAPITAL MARKET DEVELOPMENT AND REGULATION Tasked to generate investments and improve the image of the country as a viable investment The SEC is responsible for registering both destination through the formulation and traditional and non-traditional securities and also implementation of investment promotion strategy licenses and regulates various market participants, for synchronized investment promotion efforts. including exchanges, brokers, dealers, traders, and others, to ensure the smooth and fair operation of capital markets. TECHNICAL SERVICES GROUP (TSG) COMPANY REGISTRATION AND MONITORING Provides support services to the Board and its The SEC registers companies and partnerships, clientele through the enhancement of management overseeing compliance with the Corporation Code, processes, efficient dispensation of incentives, Civil Code (particularly provisions on partnerships), design and implementation of information systems, Foreign Investments Act, and related laws. rendering of legal support on investment-related issues, and conduct of human resource ENFORCEMENT development programs. The SEC actively monitors the activities of market participants to ensure their adherence to relevant laws, rules, regulations, and policies. Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 INDUSTRY DEVELOPMENT GROUP (IDG) To fulfill this mandate, it operates based on several key objectives, including ensuring the availability and Prepares the annual Investment Priorities Plan. sustainability of natural resources, increasing resource Formulates policies and develops productivity to meet growing demands, enhancing the programs/business plans/roadmaps that will contribution of these resources to national hasten and sustain the development of key development, promoting equitable access to them, industry and service sectors with emphasis on and conserving specific terrestrial and marine areas human resources development, technology that represent the country's natural and cultural acquisition, industry linkaging and heritage for current and future generations. commercialization. PROJECT ASSESSMENT GROUP (PAG) PAG is in charge of evaluating, registering, supervising, monitoring and giving project assistance to registered firms. It aims to give total investor satisfaction from the time the investor seeks registration, through the infancy stage of operations, and up to the time that the firms are fully operational. BUREAU OF IMMIGRATION PHILIPPINE ECONOMIC ZONE AUTHORITY (PEZA) Executive Order No. 292, Book IV, Title III, Chapter X, The Philippine Economic Zone Authority (PEZA) is a Section 31 specifically delineates the mandate of the government corporation established by virtue of a Bureau of Immigration as “the administration and legislative enactment known as “The Special enforcement of immigration, citizenship, and alien Economic Zone Act of 1995.” admission and registration laws in accordance with PEZA is an investment promotion agency and a the provisions of the Philippine Immigration Act of government owned corporation, attached to the 1940 (as amended), the Alien Registration Act of 1950, Department of Trade & Industry. including other pertinent laws related thereto. It is It is responsible for ensuring that foreign investors mandated to undertake the administration and who wish to put up their operations in the country will enforcement of immigration and citizenship laws and have readily available suitable locations in world- the admission of foreigners to the Philippines class, environment-friendly economic zones. including the enforcement of alien registration laws, and the exclusion, deportation and repatriation of PEZA grants fiscal and non-fiscal incentives to aliens. developers of economic zones which include Industrial Estates, Export Processing Zones, I.T. Parks, I.T. Buildings, and Tourism Oriented Economic Zones; DEPARTMENT OF LABOR AND EMPLOYMENT Exporters of manufacturing products. The Department of Labor and Employment (DOLE) is the primary government agency mandated to promote DEPARTMENT OF ENVIRONMENT AND NATURAL gainful employment opportunities, develop human RESOURCES resources, protect workers and promote their welfare, and maintain industrial peace. The Department is tasked with being the primary This government agency is responsible for issuing agency responsible for the conservation, Alien Employment Permits (AEP) to foreign nationals management, development, and proper utilization of who intend to work in the Philippines. the Philippines' environment and natural resources. Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 DEPARTMENT OF AGRARIAN REFORM (DAR) The Department of Agrarian Reform is the lead implementing agency of the Comprehensive Agrarian Reform Program (CARP). The DAR also orchestrates the delivery of support services to farmer- beneficiaries and promotes the development of viable agrarian reform communities. It is also responsible for issuing out Land Use Conversion Clearance Certificate or its equivalent to investors for tourism estate registration and PEZA- registration of proposed tourism ecozones and locator enterprises. DEPARTMENT OF AGRICULTURE (DA) The Department of Agriculture (DA) is the principal agency of the Philippine government responsible for the promotion of agricultural development growth. DA is responsible for issuing out a certification from the concerned Regional Director stating that the proposed area for the development of a tourism estate is not covered by Administrative Order No. 20 and that such land has ceased to be economically feasible for agricultural purposes. This certification is required for the registration of tourism estates and proposed tourism economic zones. Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 M8: Laws on Partnership and Corporation April Joy Mauricio 3 KINDS OF BUSINESS there shall be a proportionate sharing of the profits and losses among them. OWNERSHIP Essential Requisites of Partnership SOLE PROPRIETORSHIP 1. There must be a valid contract A sole proprietorship is the oldest, simplest, and most 2. There should be contribution of either money, prevalent form of business enterprise. property, or industry to a common fund It is unorganized business owned by one person. 3. The business, object or purpose of the partnership must be lawful The sole proprietor is personally liable for all the debts and obligations of the business. 4. The purpose of the partnership is for profit and with the intention of dividing the same among the partners Advantages of Sole Proprietorship 5. There must be two or more persons with legal capacity to enter in the contract of partnership.  Sole enjoyment of profit  Cheaper fees paid to the government Example Scenario of Partnership  Low capitalization Jose, Pedro, and Senti were classmates during their Disadvantages of Sole Proprietorship college years. On December 15, 2014, Jose approached  Personally liable to all debts and obligations of the the two and discussed the possibility of the establishing business. a restaurant business to which the two agreed.  Burdensome because all decisions and Thereaftter, the 3 executed a contract of partnership undertakings are to be carried out by him alone. (Article of Partnership) which states among others that  Limited ability to raise capital. Pedro will contribute 50,000.00 pesos, Jose, will  The existence of the business depends upon contribute kitchen untensils and Santi who finished death, illness, condition or to the will of the culinary will be the chef. propietor. They also agreed that any profits obtained in the business will be divided in 60%-30%-10% for Pedro, PARTNERSHIP Jose, and Santi resepctively. Their business’ name is Art. 1767 of the New Civil Code provides, Star Bright Company “By the contract of partnership two or more persons bind themselves to contribute money, property, or industry to a common fund, with the intention of Delectus Personae dividing the profits among themselves. Two or more The doctrine of Delectus Personae means no one can persons may also form a partnership for exercise of a become a partner without consent of all partners. profession.” The consent of all the partners in the partnership A partnership exist when two or more persons agree must be obtained to enable them to join the to place their money, effects, labor, and skill in lawful parnership. commerce or business, with the undertaking that Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 Partnership has Juridical Personality INDUSTRIAL PARTNER — is one who contributes industry or skills. Art. 1768, The partnership has a juridical personality separate and distinct from that of each of the partners. a.) An industrial partner cannot engage in business Once the partners formed the partnership, the for himself, unless the partnership expressly permits partners actually created or formed a new person, and him to do so, and if he should do so, the capitalist that new person is the partnership itself. partners may either exclude him from the firm or avail It should be remembered that there are two kinds of themselves of the benefits which he may have person in law, one is natural person or human being obtained there from, with a right to damages in either and the second is a juridical person which is separate case and distinct from that of each of the partners. b.) As for the profits, the industrial partner shall As consequence, the partnership may through the receive such share as may be just and equitable under representation of the partners buy or sell properties or the circumstances. enter into different conractual obligations. c.) Industrial partner while he is not liable for losses, may however be liable for any liabilities incurred by Classifications of Partnership the partnership from their creditors. Should he industrial partner pays, he has the right to be GENERAL PARTNERSHIP reimbursed for any payment he made. Are partnership where all the partners are general partners who are liable to the extent of their CAPITALIST-INDUSTRIAL PARTNER — is a partner separate property after the partnership asset have who contributed both capital and industry. been exhausted. GENERAL PARTNER — is a partner who is liable beyond the extent of what he has contributed. LIMITED PARTNERSHIP A partnership with one or more general partners LIMITED PARTNER — is a partner in a limited and one or more limited partners. In limited partnership and is liable only to the extent of what he partnership, the general partner will be held liable has contributed. beyond his contribution. A limited partner is however liable only to he extent of his contribution. MANAGING PARTNER — is a partner who manages the business of the Partnership. If there is no Classifications of Partners managing partner appointed, all of the partners shall manage. CAPITALIST PARTNER — is one who contributes capital (property or money) Distribution of Profits Under article 1797 of the civil code, the profit of the a.) A capitalist partner is not exempt to any losses. partners shall depend upon the agreement of the Any stipulation to the contrary is void. partners, in case they failed to stipulate, the parties share in the profit shall be in proportion to what he b.) A capitalist partner cannot engage in another may have contributed. business which is of the same kind of business of the partnership, unless there is a stipulation to the contrary. Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 Distribution of Losses Limited liability; and The rule on distribution of losses are the same as the It may last long rule above to the effect that, the share of the partner in the losses shall be that share agreed upon. Disadvatages of Corporation However, if they do not agree as to how much would The process of forming corporation is complicated; be their share in the losses, then the share of each It is always subject to the control and regulation of the partner on the losses shall be in proportion to what he government; and may have contributed. The operation is costly. However, note that the industrial partner shall not be liable for losses Common Classification of Corporation CORPORATION STOCK CORPORATION A corporation is an artificial being created by oeration of law, having the right of succession and the powers, is one which has capital stock and is divided into attributes, and properties expressly authorized by law shares and authorized to distribute to holders or incident to its existence. thereof of such shares in the form of dividends or allotments of the surplus profits on the basis shares held. Attributes of Corporation It is an artificial being It is created by operation of law NON-STOCK CORPORATION Has a right of succession is one which does not issue stocks and does not distribute dividend to their members It has express and implied powers Doctrine of Corporate Entity PRIVATE CORPORATION A corporation acquires juridical personality from the is one which is established by private individuals time the Securities and Exchange Commission (SEC) for private purposes and ends. issued a Certificate of Incorporation. Once juridical personality is required, the corporation becomes separate and distinct from the person who PUBLIC CORPORATION establishes the same. is one created by law and for public purpose. This is called doctrine of corporate entity. Therefore considering that a corporation is a person, it can acquire properties in its own name. CORPORATION DE JURE The property so acquired by the corporation is not the is one which organized in strict compliance of all property of the Board of Directors, its officers or the requirements of the laws for its incorporation. stockholders regardless of the amount or shares given by them in corporation. DOMESTIC CORPORATION Advantages of Corporation is one that is formed or organized in accordance to It has strong legal personality; the laws of the Philippines. Free transferability of shares; Centralized Management (there is a board); Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 FOREIGN CORPORATION Under section 25 of the Corporation code the officers are: is one that is formed or organized under any laws other than those of the Philippines and whose laws allow Filipino citizens and corporations to do a. President who must be director of the corporation business in its own country. b. Treasurer, who may or may not be a director c. Secretary who shall be a resident and citizen of NON-PROFIT CORPORATION the Philippines and d. Such as other officers as may be provided for in by prescription is one which was not formed the by-laws. Any two or more positions may be formally, meaning, no SEC registration, but has held concurrently by the same person, except that been recognized by immemorial usage as a no one shall act as president and secretary or as corporation president and treasurer at the same time. CORPORATION SOLE 5. DIRECTORS AND TRUSTEES — The Board of is a corporation established for the purpose of Directors is the governing board in a stock corporation. administering and managing, as trustee, the affairs, Whereas, the Board of Trustees is the governing board in property and temporalities of any religious a non-stock corporation. The board exercise the powers denomination, sect or church. of the corporations Powers of the Corporation ELEEMOSYNARY CORPORATION The powers of the corporations are classified into three, is one that is organized for charitable purposes. namely; Components of Corporation 1. EXPRESS POWERS — or the powers expressly granted by law to he corporation such as those 1. INCORPORATORS — are the persons who originally mentioned in Section 36 of the Corporation Sode. The formed the corporation. Their names apear in the powers of the corporation may also expressly contain Articles of Incorporation. The following are the in the articles of Incorporation and its By laws. requisites in order to become an Incorporator 2. INCIDENTAL POWERS — are powers which a 2. CORPORATORS — are those that composes that corporation can exercise as incident to itts corporate corporation, the board of directors, or board of existence. Example: Power of succession, power to truestees, stock holders or members including adopt and amend it by laws corporaion. 3. IMPLIED POWERS — these are the powers which are 3. STOCKHOLDERS AND MEMBERS — Stockholders necessary to execute the express powers granted to a are person own or holders of shares of stock in a corporation. stock corporation. Members on other hand, are those who compose the non-stock corporation. Corporate Term A corporation shall exist for a period not exceeding 4. CORPORATE OFFICERS — are the officers named in fifty (50) years from the date of incorporation unless the articles of incorporation or in the by-laws of the sooner dissolved or unless said period is extended. corporation. The corporate term as originally stated in the articles of incorporation maybe extended for. Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 M9.1: Foreign Investments Act of 1991 and Retail Trade Liberation Act of 2000 April Joy Mauricio THE FOREIGN INVESTMENT As a general rule, there are no restrictions ACT OF 1991 on extent of foreign ownership of export [Republic Act No. 7042] enterprises. An act to promote foreign investments, prescribe the procedures for registering enterprises doing business In domestic market enterprises, foreigners in the Philippines and for other purposes. can invest as much as one hundred percent This bill, which is consolidation of Senate Bill No. 1678 [100%] equity except in areas included in and House Bill No. 32496, was finally passed by the the negative list. Senate and the House of Representatives on June 6, 1991. DEFINITIONS - AS USED IN THIS ACT: SECTION 1 This Act shall be known as the "Foreign Investments PHILIPPINE NATIONAL Act of 1991.” ◦ shall mean a citizen of the Philippines; ◦ of a domestic partnership or association wholly SECTION 2 owned by citizens of the Philippines; Declaration of Policy — It is the policy of the State to ◦ or a corporation organized under the laws of the attract, promote and welcome productive investments Philippines of which at least sixty percent (60%) from foreign individuals, partnerships, corporations, of the capital stock outstanding and entitled to and governments in activities which significantly vote is owned and held by citizens of the contribute to national industrialization and socio- Philippines; economic development to the extent that foreign ◦ or a corporation organized abroad and registered investment is allowed in such activity by the as doing business in the Philippines under the Constitution and relevant laws. Corporation Code of which one hundred percent Foreign investments shall be encouraged in the (100%) of the capital stock outstanding and enterprises that significantly expand livelihood and entitled to vote is wholly owned by Filipinos; employment opportunities for Filipinos; enhance ◦ or a trustee of funds for pension or other economic value of farm products; promote the welfare employee retirement or separation benefits, where of Filipino consumers; expand the scope, quality and the trustee is a Philippine national and at least volume of exports and their access to foreign markets; sixty percent (60%) of the fund will accrue to the and/or transfer relevant technologies in agriculture, benefit of Philippine nationals industry and support services. Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 INVESTMENT ◦ Teaching at higher education levels ◦ equity participation in any enterprise organized or ▪ provided the subject being taught is not a existing under the laws of the Philippines; professional subject or included in a FOREIGN INVESTMENT government board or bar examination ◦ an equity investment made by non-Philippine ◦ Training centers engaged in short-term high-level skills development that do not form part of the national in the form of foreign exchange and/or formal education system; other assets actually transferred to the Philippines and duly registered with the Central Bank which ◦ Insurance adjustment companies, lending shall assess and appraise the value of such assets companies, and investment houses; and other than foreign exchange; ◦ Wellness centers. FOREIGN INVESTMENTS NEGATIVE LIST ◦ or "Negative List" shall mean a list of areas of It also increased participation of up to 40% on two economic activity whose foreign ownership is sectors: limited to a maximum of forty percent (40%) of the ◦ Contracts for construction and repair of locally- equity capital of the enterprises engaged therein. funded public works ▪ except those that are foreign-funded or FOREIGN INVESTMENT NEGATIVE LIST assisted and required to undergo international FINL is a list of economic sectors where foreign competitive auction, which used to have 25% ownership and participation in the Philippines are foreign equity cap; and regulated. ◦ Private radio communication networks (previously only up to 20% equity) ◦ It contains two component lists: ▪ List A contains areas of investment where foreign ownership is limited by mandate of the Philippine Constitution or by specific laws. The 11th Foreign Investment Negative List (under EO 65) ▪ List B, on the other hand, contains areas of investment where foreign ownership is limited List A for reasons of security, defense, risk to health No Foreign Equity and morals, and protection of local small-and medium enterprises (SMEs). Mass media, except recording and internet business Practice of professions, including radiologic and x-ray technology, law, criminology, and marine deck officers and marine engine officers Updates on the 11th Version of the Negative List ◦ Subject to the Annex on Professions indicating professions where foreigners are allowed to The 11th version added sectors where up to 100% practice in the Philippines subject to reciprocity foreign participation will be allowed: and where corporate practice is allowed; and ◦ Internet businesses ◦ Foreigners may teach at higher education levels if subject being taught is not a professional subject ▪ a new category previously included in the (included in a government board or bar category of mass media, which remains examination) completely restricted to foreign participation and ownership Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 Retail trade enterprises with paid-up capital of less Educational institutions other than those established than US$2.5 million by religious groups and mission boards, for foreign Cooperatives diplomatic personnel and their dependents and other foreign temporary residents, or for short-term high- Organization and operation of private detective, level skills development that do not form part of the watchmen or security guards agencies formal education system as defined in Section 20 of Small-scale mining Batas Pambansa (BP) No. 232 (1982) Utilization of marine resources in archipelagic waters, Culture, production, milling, processing, trading except territorial sea, and exclusive economic zone as well as retailing, of rice and corn and acquiring, by barter, small-scale utilization of natural resources in rivers, purchase or otherwise, rice and corn and the by- lakes, bays, and lagoons products thereof Ownership, operation, and management of cockpits Contracts for the supply of materials, goods, and Manufacture, repair, stockpiling, and/or distribution of commodities to Government-Owned and biological, chemical, and radiological weapons and Controlled Corporation (GOCC), company, agency or anti-personnel mines and nuclear weapons municipal corporation Manufacture of firecrackers and other pyrotechnic Operation of deep-sea commercial fishing vessels devices Ownership of condominium units Private radio communications network Up to 25% Foreign Equity Private recruitment, whether for local or overseas List B employment Up to 40% Foreign Equity Contracts for the construction of defense-related structures Manufacture, repair, storage, and/or distribution of products and/or ingredients requiring Philippine National Police (PNP) clearance: Up to 30% Foreign Equity ◦ Firearms (handguns to shotguns), parts of Advertising firearms and ammunition therefor, instruments or implements used or intended to be used in the manufacture of firearms; Up to 40% Foreign Equity ◦ Gunpowder; Dynamite; Blasting supplies; Contracts for the construction and repair of locally- Ingredients used in making explosives: Telescopic funded public works, except: sights, sniper scope, and other similar devices. ◦ Infrastructure/development projects covered in Republic Act (RA) No. 7718; and Manufacture, repair, storage, and/or distribution of ◦ Projects which are foreign-funded or assisted and products requiring Department of National Defense required to undergo international competitive (DND) clearance: bidding. ◦ Guns and ammunition for warfare; Exploration, development, and utilization of natural ◦ Military ordinance and parts thereof (e.g., resources torpedoes, depth charges, bombs, grenades, Ownership of private lands missiles); Gunnery, bombing, and fire control Operation of public utilities, except power generation systems and components; and the supply of electricity to the contestable market and similar businesses or services not covered by the definition of public utilities Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 ◦ Tactical aircraft (fixed and rotary-winged), parts, Section 2 and components thereof; Declaration of Policy — It is the policy of the State to ◦ Space vehicles and component systems and promote consumer welfare in attracting promoting Combat vessels (air, land, and naval) and and welcoming productive investment that will bring auxiliaries; down price for the Filipino consumer, create more ◦ Weapons repair and maintenance equipment; jobs, promote tourism, assist small manufacturers, Military communications and Night vision stimulate economic growth and enable Philippine equipment; goods and services to become globally competitive through the liberalization of the retail trade sector. Manufacture and distribution of dangerous drugs (RA No. 7042 as amended by RA No. 8179) Section 3 Sauna and steam bathhouses, massage clinics, and other like activities regulated by law because of risks DEFINITIONS - AS USED IN THIS ACT: posed to public health and morals, except wellness centers RETAIL TRADE All forms of gambling, except those covered by investment agreements with Philippine Amusement ◦ any act, occupation or calling of habitually selling and Gaming Corporation (PAGCOR) direct to the general public merchandise, Domestic market enterprises with paid-in equity commodities or good for consumption, but the restriction of this law shall not apply to the capital of less than the equivalent of US$200,000 following: Domestic market enterprises which involve advanced ▪ Sales by manufacturer, processor, laborer, or technology or employ at least fifty (50) direct worker, to the general public the products employees with paid-in equity capital of less than the manufactured, processed or products by him if equivalent of US$100,000 his capital does not exceed One hundred thousand pesos(100,000.00); RETAIL TRADE LIBERALIZATION ▪ Sales by a farmer or agriculturist selling the ACT OF 2000 products of his farm; ▪ Sales in restaurant operations by a hotel [REPUBLIC ACT NO. 8762] owner or inn-keeper irrespective of the An act liberalizing the retail trade business, repealing amount capital: provided, that the restaurant is for the purpose realing for the purpose Republic Act incidental to the hotel business; and no. 1180, as amended, and for other purposes ▪ Sales which are limited only to products manufactured, processed or assembled by a manufactured, processed or assembled by a Section 1 manufacturer though a single outlet, Title — This Act shall be known as the "Retail Trade irrespective of capitalization. Liberalization Act of 2000 Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 Category C – Enterprises with a paid-up HIGH-END OR LUXURY GOODS capital of the equivalent in Philippine ◦ shall refer to goods which are not necessary for Pesos of Seven million five hundred thousand life maintenance and whose demand is generated US dollars (US$7,500,000.00), or more may be in large part by the higher income groups. wholly owned by foreigners: Provided, ◦ Luxury goods shall include, but are not limited to however, That in no case shall the products such as; jewelry, branded or designer investments for establishing a store clothing and footwear, wearing apparel, leisure investments for establishing a store in and sporting goods, electronics and other Categories B and C be less than the personal effects. equivalent in Philippine pesos of Eight hundred thirty thousand US dollars (US$830,000.00). Section 5 Foreign Equity Participation — Foreign-owned partnerships, associations and corporation formed Category D – Enterprises specializing in and organized under the laws of the Philippines may, high-end or luxury products with a paid-up upon registration with the Securities and Exchange capital of the equivalent in Philippine Commission (SEC) and the Department of Trade and Pesos of Two hundred fifty thousand US Industry (DTI), or in case of foreign owned single dollars (US$250,000.00) per store may be proprietorships, with the DTI, Engage or invest in the wholly owned by foreigners. retail trade business, subject to the following categories. The foreign investor shall be required to maintain in the Philippines the full amount of the prescribed Category A – Enterprises with paid-up minimum capital unless the foreign investor has capital of the equivalent in Philippine Peso notified the SEC and the DTI of its intention to of the than Two million five hundred repatriate its capital and cease operations in the thousand US dollars (US$2,500,000.00) shall Philippines. be reserved exclusively for Filipino citizens and corporations wholly owned by Failure to maintain the full amount of the prescribed Filipino citizens. minimum capital prior to notification of the SEC and the DTI, shall subject the foreign investor to penalties or restrictions on any future trading activities/business in the Philippines. Category B – Enterprises with a minimum paid-up capital of the equivalent in Foreign retail stores shall secure a certification from Philippine Pesos of two million five hundred the Bangko Sentral ng Pilipinas (BSP) and the DTI, thousand US dollar (US$2,500,000.00) but which will verify or confirm inward remittance of the less than Seven million five hundred minimum required capital investments. thousand US dollars (US$7,500,000.00) may be wholly owned by foreigners except for the first two (2) years after the effectivity of Section 8 this Act wherein foreign participation shall Qualification of Foreign Retailers — No foreign be limited to not more than sixty percent retailer shall be allowed to engage in retail trade in the (60%) of total equity. Philippine unless all the following qualifications are met: Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 ◦ A minimum of Two hundred million US dollar Section 12 (US$200,000,000.00) net worth in its parent Penalty Clause — Any person who shall be Found corporation for Categories B and C, and Fifty guilty of Violation of any provision of this Act shall be million US dollar (US$50,000,000.00) net worth in punished by imprisonment of not less that six (2) its parent corporation for category D; years and one (1) day but not more than eight (8) ◦ (5) retailing branches or franchises in operation years, and a fine of not less than One million pesos anywhere around the word unless such retailer (P1,000,000.00) but not more that Twenty million has at least one (1) store capitalized at a minimum pesos (P20,000,000.00) of Twenty-five million US dollars ◦ In the case of associations, partnerships or (US$25,000,000.00); corporations, the penalty shall be imposed upon ◦ Five (5)-year track record in retailing; and its partners, president, directors, manager and ◦ Only nationals from, or juridical entities formed or other officers responsible for the violation. incorporated in Countries which allow the entry of ◦ If the offender is not a citizen of the Philippines he Filipino retailers shall be allowed to engage in retail shall be deported immediately after service of trade in the Philippines sentence. ◦ If the Filipino offender is a public officer or The DTI shall keep a record of Qualified employee, he shall, in addition to the penalty foreign retailers who may, upon compliance prescribed herein, suffer dismissal and permanent with law, establish retail stores in the disqualification from public office Philippine. It shall ensure that parent retail trading TOURISM RELATED INVESTMENT LAWS company of the foreign investor complies with the qualifications on capitalization and track record prescribed in this section The Tourism Act of 2009 (Republic Act No. 9593) Special Economic Zone Act (Republic Act No. 7916) The Omnibus Investment Code of 1987 (Executive Section 10 Order No. 228) Prohibited Activities of Qualified Foreign Retailers — Act Granting of Special Investors Resident Visa or Qualified foreign retailers shall not be allowed to SIRV (Executive Order No. 63) engage in certain retailing activities outside their The Foreign Investments Act of 1991 (Republic Act No. accredited stores through the use of mobile or rolling 7042) stores or carts, the use of sales representatives, door- to-door selling, restaurants and sari-sari stores and Investors’ Lease Act (Republic Act No. 7652) such other similar retailing activities: Provided, That a detailed list of prohibited activities shall hereafter be “ Meow~ -JM ” formulated by the DTI Section 11 Implementing Agency: Rule and Regulations — The monitoring and regulation of foreign sole proprietorships, partnerships, associations or corporations allowed to engage in retail trade shall be the responsibility of the DTI. Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 Tourism Investment Portfolio CHAPTER 7 TOURISM INVESTMENT LAWS AND INCENTIVES 7.1 Incentives Granted Under Executive Order No. 63 This Executive Order grants incentives to foreigners investing at least US$50,000 in a tourist-related project or in any tourist establishment as determined by the Committee created in the same law. 1. Special Investor’s Resident Visa (SIRV) to investor, wife and unmarried minor children A foreign investor may be issued a Special Investor’s Resident Visa (SIRV) provided that, he is able to prove the following qualifications: a) He has not been convicted of a crime involving moral turpitude b) He is not afflicted with AIDS or any loathsome, dangerous or contagious disease c) He has not been institutionalized for any mental disorder or disability d) He is willing and able to invest at least US$50,000 in a tourism related project In the case of foreign corporation which is willing to invest the amount of at least US$50,000.00 in a tourist-related project, the SIRV may be issued to the corporation’s Chief Executive Officer. The wife and unmarried minor children of the foreign investor may also be issued the same visa, subject to the qualifications under items (a) to (c). The application for Special Investor’s Resident Visa shall be supported by the following documents: Æ Certificate of Inward Remittance from a Commercial Bank; Æ Sworn Certification from the Recipient Firm; Æ Bangko Sentral Registration Document; Æ Police Clearance; ƒ NBI Clearance ƒ BI Clearance Æ Medical Health Certificate; Annotated by April Joy Mauricio 53 Downloaded by hannie hae ([email protected])  lOMoARcPSD|45155650 Tourism Investment Portfolio Æ Mental Health Certificate; Æ Photocopy of the applicant’s passport; Æ Photocopy of the passport of applicant’s legal spouse and dependent, if any; Æ Photocopy of marriage certificate of applicant and spouse; and Æ Photocopy of birth certificate of applicant, his spouse and dependent children joining him/her to the Philippines. 2. Remittance of Earnings The E. O. also recognizes the right of the investor to remit earnings from his investment in the currency in which the investment was originally made and at the exchange rate prevailing at the time of remittance. 3. Repatriation of Capital In case of liquidation, the investor is also allowed to repatriate the entire proceeds of the liquidation of the investment in which the investment originally made. 4. Right of succession In case of death, the surviving immediate family shall be entitled to the same privileges. An investor may apply for SIRV at the Philippine Embassy or Consulate in his home country or place of residence. If already in the Philippines, the investor may file the application at the Department of Tourism for endorsement to the Bureau of Immigration. 54