Part 1

Preliminary Provisions

Section 2. Policy

The State will hasten the country’s economic development by:

  • encouraging the formation and growth of barangay micro business enterprises which effectively serve as seedbeds of Filipino entrepreneurial talents
  • intergranting those in the informal sector with the mainstream economy, through:
    • the rationalization of bureaucratic restrictions
    • the active granting of incentives and benefits to generate much-needed employment and alleviate poverty.

Section 3. Definitions

  • (a) BMBE is any business entity or enterprise engaged in the production, processing or manufacturing of products or commodities, including agro-processing, trading and services, whose total assets including those arising from loans but exclusive of the land on which the particular business entity’s office, plant and equipment are situated, shall not be more than 3M pesos. This definition shall be subjected to review and upward adjustment by the SMED Council, as mandated under Republic Act No. 6977, as amended by Republic Act No. 8289.

  • “Service” excludes those rendered by anyone, who is duly licensed government after having passed a government licensure examination, in connection with the exercise of one’s profession.

(b) “Certificate of Authority” is the certificate issued granting the authority to the registered BMBE to operate and be entitled to the benefits and privileges accorded thereto.

(c) “Assets” refers to all kinds of properties, real or personal, owned by the BMBE and used for the conduct of its business as defined by the SMED Council: Provided, That for the purpose of exemption from taxes and fees under this Act, this term shall mean all kinds of properties, real or personal, owned and/or used by the BMBE for the conduct of its business as defined by the SMED Council.

(d) “Registration” refers to the inclusion of BMBE in the BMBE Registry of a city or municipality.

(e) “Financing” refers to all borrowings of the BMBE from all sources after registration.


Section 4. Registration and Fees

The Office of the Treasurer of each city or municipality shall register the BMBE’s and issue a Certificate of Authority to enable the BMBE to avail of the benefits under this Act.

Any such applications shall be processed within fifteen (15) working days upon submission of complete documents. Otherwise, the BMBEs shall be deemed registered. The Municipal or City Mayor may appoint a BMBE Registration Officer who shall be under the Office of the Treasurer.

Local government units (LGU’s) are encouraged to establish a One-Stop-business Registration Center to handle the efficient registration and processing of permits/licenses of BMBEs. Likewise, LGUs shall make a periodic evaluation of the BMBE’s financial status for monitoring and reporting purposes.

The LGUs shall issue the Certificate of Authority promptly and free of charge. However, to defray the administrative costs of registering and monitoring the BMBEs, the LGUs may charge a fee renewal.

The Certificate of Authority shall be effective for a period of two (2) years, renewable for a period of two (2) years for every renewal.

As much as possible, BMBEs shall be subject to minimal bureaucratic requirements and reasonable fees and charges.

Section 5. Eligibility

Any person, natural or juridical, or cooperative, or association, having the qualifications as defined in Section 3(a) hereof may apply for registration as BMBE.

Section 6. Transfer of Ownership

The BMBE shall report to the city or municipality of any changer in the status of its ownership structure, and shall surrender the original copy of the BMBE Certificate of Authority for notation of the transfer.


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