Which Business Entity is The Right One For You?

Which Business Entity is The Right One For You?

So, you decided to take the leap and start a new business. That’s great! First step is to register so you decide to look it up but then realize that there are so many entities! Freelancer, Sole Proprietorship, One Person Corporation- which one should you choose?

Don’t sweat it, we are here to help. Here is a cheat sheet to guide you on the different entities.


What is it: A freelancer is a self-employed person who offers services to clients via contract or project base and isn’t committed to an employer in the long term. A freelancer may not be able to hire employees.

Perfect for: Writers, Designers, IT Experts- basically anyone who has a special skill they can offer.

Need help registering as a freelancer? Permitly can help you. Click here


What is it: A professional is a self-employed person but who has finished a prescribed university course and is required to have passed a type of licensure exam to be able to practice one’s expertise.

Perfect for: Doctors, lawyers, dieticians, etc.

Need help registering as a professional? Permitly can help you. Click here 

Sole Proprietorship

What is it: A sole proprietor is a type of business entity where there is only one owner. This owner is liable for all income tax and profits earned. A Sole Proprietorship may hire employees.

Perfect for: Those starting a side hustle but may still want to keep their full day job or aren’t interested in opening the business to partners or investors. Some examples include those who are home- based persons who make and sell goods on platforms such as Instagram, Lazada or Shopee.

Need help registering as a Sole Prop? Permitly can help you. Click here


What is it: A corporation is a business entity that is separate from the owners. While it is the most expensive to set up and is registered with the SEC, it also offers protection to the owners as the corporation is what is liable when it comes to income tax, profits, etc. It also allows transfer of shares.

Types: In the Philippines, there are two types: Corporation and One Person Corporation. A Corporation has more than one owner, is required to have the words CORP or INC in the business name, and has a required Paid up Capital. A One Person Corporation is like the USA’s Limited Liable Corporation and it doesn’t require a Paid Up Capital (unless required by special laws based on the type of operation).

Perfect for: Those who would want to see their business grow from a small to medium/large company. Also good for those who would like to invite investors into the company or would like to go public.

Need help registering? Permitly can help you for both One Person Corporation  or Domestic Corporation

Still confused?

Our partner, Permitly offers free 15 minute consultations. Schedule one here