CHAPTER 4

MANAGEMENT AND LEGAL STUDY

This chapter tackles about the organizational arrangement of the

business. The management aspect suggests a clear and precise identification of

duties and responsibilities, flow of authority and manpower level requirement.

This contains the organizational chart and the qualifications of the people

involved in the formation of the business organization. It must be set up aimed at

optimum effectiveness. To attain this, management must be able to plan all

activities, for the company to become dynamic and competitive business over

and done with human resource, financial capability and new technologies.

Management Aspect

Form of Ownership

The type of business is a partnership. It is to be registered with the

Securities and Exchange Commission (SEC) for the contract called Articles of

Co-partnership. By the contract of partnership, two or more persons bind

themselves to contribute money, property and industry with the intension of

dividing the profits among themselves.

Chicken Pecker as partnership will be registered with the different

government agencies as Securities and Exchange Commission (SEC),

Department of Trade and Industry (DTI), Business Permit and Licensing Office of

Manila City (BPLO), Bureau of Internal Revenue (BIR) and Social Security

System (SSS). The project will have its full blast after it has complied with all the
necessary documents and technical requirements needed to operate and engage

in this type of business. The pre-operating capital for this business will be

₱200,000 each capitalist partners and capitalist-industrial partner, with a total of

₱1,000,000.

Vision, Mission, and Core Values

A. Vision

To be the first to introduced Toknengo in the Philippines that offers

the best fusion and twist of Chicken and Mango Sauce that will surely

satisfy and bring new flavor and excitement on our customers.

B. Mission

We shall:

 Continually promote local and signature Filipino dish for the

younger generation.

 Commit ourselves in building customer loyalty and

confidence by innovating and emphasizing the highest level

of safety and quality in product management.

 Strictly implement the policy of observing the highest quality

of standard to ensure the hazard-free environment.

C. Core Values

P– ROMOTE: developing passion and patronize our own craft

E– NRICH: giving knowledge of what our country can offer.

C– ARE: genuine service offered to our customers.

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 K– EY: to build strategies in attracting people who have similar

taste or those who like to discover something new.

E– DGE: handling every scenario and people manageable

R-EAL: only best and fresh ingredients to be used and served for

our customer

Capitalization

Table 46
Capitalization
PARTNERS Types of partners Capital Sources of
Capital
Thea Cariaga Capitalist Ᵽ200,000 Personal
Savings
Lourdelaine De Jesus Capitalist- Ᵽ200,000 Personal
Industrialist Savings
Karen Ediza Capitalist Ᵽ200,000 Personal
Savings
Joanna Lyn Valeros Capitalist Ᵽ200,000 Personal
Savings
Fitz Gerald Aya-ay Capitalist Ᵽ200,000 Personal
Savings

Organizational Chart

The organizational structure provides a glimpse of the individuals

comprising the organization and their respective positions. It shows to whom a

certain employee should report and the employees working under the

supervision of a particular employee. This helps establish authority and respect

among members of the organization.

73
 Owners/
Managers

Chef (1) Crew (3)

Figure 42
Organizational Chart

The type of business ownership will be a partnership; in which partners

pool money, skills and other resources, and share profit and loss in accordance

with the terms of the partnership agreement. In the absence of such agreement,

a partnership is assumed to exit where the participants in an enterprise agree to

share the associated risk and rewards proportionately. Mutual support and

motivation are needed for the business to last longer.

Manpower Requirements

It is very vital in all business organization to know their manpower

requirements to operate systematically and effectively at all times. It will help also

to determine the capacity or capabilities of the employees to fit in the flow of

business as well as to have a clear duties and responsibilities. Having standard

qualifications in hiring and selecting, the employee will establish efficient

business operations.

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 Table 47
Manpower Requirements
Chef Bachelor's degree holder, Graduated on Culinary arts

 Male or female, from 23-35 years old

 With at least 3 years work experience
 Transcript of Records
 Certificate of Graduation or Diploma
 SSS ID Number
 TIN Number
 2 passport-size pictures (colored)
 NBI clearance
 Medical clearance Copy of Birth Certificate
 Certificate of Employment (CoE) from last employer

Cashier Graduated on any course.

 Female/male, from 21-26 years old, with at least 2
years work experience
 Transcript of Records
 Certificate of Graduation or Diploma
 SSS ID Number
Requirements  TIN Number
 2 passport-size pictures (colored)
 NBI clearance
 Medical clearance
 Copy of Birth Certificate
 Certificate of Employment (CoE) from last employer

Graduated on any course.

Waiter

 Female/male, from 21-26 years old, with at least 2

years work experience
 Transcript of Records
 Certificate of Graduation or Diploma
 SSS ID Number
 TIN Number
 2 passport-size pictures (colored)
 NBI clearance

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  Medical clearance
 Copy of Birth Certificate
 Certificate of Employment (CoE) from last employer

High school graduate / graduated on any course.

Dishwasher

 Male, from 21-26 years old, with at least 2 years work

experience.
 Transcript of Records
 Certificate of Graduation or Diploma
 SSS ID Number
 TIN Number
 2 passport-size pictures (colored)
 NBI clearance
 Medical clearance
 Copy of Birth Certificate –
 Certificate of Employment (CoE) from last employer

Table 48
Manpower Schedule
POSITION DAILY WEEKLY MONTHLY ANNUALLY

He is responsible He is responsible He is responsible He is responsible

for the cleanliness for the cleanliness for the sanitation for the sanitation
Dishwasher
and orderliness of and orderliness of of kitchenware of kitchenware
the kitchenware the kitchenware and utensils and and utensils .
and utensils from and utensils from should pass
time to time. day to day. cleaning business
permit.

Responsible for Responsible for Responsible for Responsible to

cash register and the records of monthly provide complete
recomputation of daily up to weekly bookkeeping at all and accurate
Cashier/
Waiter/ daily sales. transactions. sales and financial data to
waitress preparation disbursement be used in
operation. transactions yearend reports.
Primarily liable for
Primarily liable for Primarily liable for purchasing and Primarily liable to
the whole kitchen inventory and ordering report the whole
operation like supplies stocks ingredients based performance of
Chef

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 cooking, and keep safe the on the budgeted each individual
equipment ingredients in the amount and within the
maintenance and storage room. recording all business on year-
directly reports to relevant end evaluation.
the owners. transaction for the
monthly report to
the owners.
They are They are They are They are
responsible for responsible for responsible for responsible for
supervision and supervision and employees’ payroll performance
Managing
guidance of each guidance of each for the whole evaluation of
partner
employee and employee and month and to have each employee
checks whether checks whether meeting with them and rate their
day to day sales harmonious discussing the services whether
are achieve. working growth of the they met the
environment is business. criteria.
met.

Employment Process

 Applicants will be passing an application form or resume with 2x2

colored photo to the senior manager.

 The store manager will analyze the contents of the resume and will call

theapplicant for the initial examination if interpreted to be satisfactory.

 The manager will provide an exam that contains basic and

abstractquestions.

 If the applicant passed the exam, he will be immediately interviewed

forscreening.

 After the interview, if passed, will be given the list of requirements to

becomplied for a specific period of time.

 After compliance of all the requirements, the applicant will be

scheduled fororientation together with the other applicants.

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  After the applicants are oriented, they will be trained for one week

regarding the operations of the business applying the basic principles

of the company.

Organizational Policies and Procedures

Chicken pecker’s policy is to operate within the letter and spirit of all

applicable laws and regulations. Employees are expected to reflect the core

values and exercise the highest levels of integrity, ethics and objectivity in

actions and relationships which may affect Chicken Pecker, or where employee

represents or negotiate on behalf of the company. Employees must not misuse

the authority or influence of their position in these relationships. When there is

doubt as to whether an action is appropriate, or whether it will cause

embarrassment to Chicken Pecker or its reputation, it should be avoided.

Employees who violate this policy are subject to severe disciplinary action,

including termination of employment. Employees who know of violations must

immediately report to them to their appropriate supervisor and business unit

controller, or they are also subject to severe disciplinary action. Any employee

who reports a violation or a potential violation may, to the extent legally possible,

remain anonymous. This policy must be regularly communicated to all officers,

restaurant manager, and other employees as appropriate.

1. Classification of Employees

1.1. According to Rank

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 1.1.1. Managerial Employee – One who is vested with powers or

prerogatives to lay down and execute management policies and/or

hire, transfer, suspend, lay off, recall, discharge, assign or discipline

employees.

1.1.2. Rank-and-file Employee – All other employees not falling within

any of the above definitions.

1.2. According to Status

1.2.1. Regular – An employee is hired on a regular status upon

satisfactory completion of the probationary period and upon

satisfaction of the criteria necessary for appointment as regular

status.

1.2.2. Probationary – An employee is hired on a probationary basis for a

period not to exceed six (6) months.The company reserves the right

to amend the above classification or create sub - classifications as

the circumstances of the business may require.

2. Orientation

All newly hired employees regardless of classification of rank and

status must undergo an orientation and indoctrination as to the company’s

vision, mission, policies, rules and regulations, and duties and responsibilities.

3. Personnel Records

It is the responsibility of the company to update and maintain

personnel records. If there are changes in an employer’s personal data such

as residence, civil status, dependents, etc., a report should be made for

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 updating purposes. Withholding information and failure to report will result in

wilful breach of trust wherein continuance of service will be questioned. It

should contain the following document and records:

 Resume with 2x2 colored photo

 Test results

 Interview impressions

 Mayor’s permit and health certificate (to be renewed every calendar

year)

 Transcript of records

 TIN, SSS, PHIC, HDMF numbers

 Employment contracts

 Performance Evaluation forms

 Certificate of trainings attended

 Leave and violation records

 Others

4. Contracts of Employment

All employees shall duly sign, execute and deliver the corresponding

Contract of Employment. All employees shall thereafter be issued a company

identification card, which must be worn at all times during working hours.

4.1. Work Schedule

It is the policy of the company to provide appropriate work hours

without violating the mandated rest days. As such, the company requires

all employees to follow the eight (8) hours working shift, excluding one-

80
 hour break assigned to them. For Tuesdays-Thursday, the work shift will

be from 5pm-12mn, and for Fridays-Sundays, the work shift will be 5pm-

2am, with 2 hours of required overtime.

4.2. Attendance and Punctuality

Attendance and punctuality are important qualities that the

company expects from its employees. They are the factors that

determine an employee’s efficiency and reliability. His presence is

necessary for the smooth flow of work at the start of the business hours.

4.2.1. Attendance

Every employee shall ask written permission from the Store

Manage or Department Head, before taking the leave of absence.

4.2.1.1. Unscheduled Absences

Employees must file an application for absence for at

least one (1) week to Store Manager.

4.2.1.2. Sickness

If employee incurred sickness and cannot report for

work, he must call his supervisor or manager at least two (2)

hours before his duty. If no calls were received on the day of

his absence or his call came in late, this will be considered

as AWOL. Upon return to work, he must file an absence slip

with medical certificate attached for signature and approval

of Store Manager or Supervisor.

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 4.2.1.3. Emergency Leave

If employees must go on emergency leave, he must

file an absence slip immediately. Attached to the absence

slip must be documents justifying his reason for going on

emergency leave. An employee who is absent from work

without written approval is subject to penalties. An employee

who is absent without submitting official leave for five

consecutive days is considered to abandoned his work and

therefore subject to outright dismissal from the company.

4.2.2. Punctuality

It is the policy of the company to discourage tardiness as this

affects the morale of the punctual employees as well as the operations of

the business. Tardiness shall mean coming to work past the required

starting time. It also means failure to go back in the workplace immediately

after break periods. Heavy traffic, oversleeping, personal reasons, etc. do

not constitute justification for late arrivals. Only three (3) tardiness are

allowed within one month. In excess of this, an employee is subject to

disciplinary action.

4.3. Personnel Movement and Performance Evaluation

It is management’s prerogative to assign, transfer, reclassify,

promote or demote its employees accordingly based on merit and

performance. Thus, employees are continuously evaluated as to their

performance, work attitude, productivity, honesty and diligence and may

82
 be served as bases for management’s decisions on personnel movement.

Performance evaluation shall be done to every employee on his 3rd, 4th,

and 5th month.

4.4. Separation from Service

4.4.1. Voluntary Resignation

In case an employee intends to resign, he/she must give a

one-month prior notice to the management and must comply with

all the clearance requirements; otherwise the employee shall forfeit

whatever remaining compensation due to him.

4.4.2. Termination

In all cases involving a termination of an employee’s service

from the company, appropriate notice of termination shall be

furnished to the employee subject to clearances of all

accountabilities.

4.5 Compensation and Benefits

4.4.3. Salaries and Wages

All employees shall receive their respective salaries or

wages as provided in their Contracts of employment every 15th and

last day of the month. Cut-off for payroll computation is every 10th

and 25th of the month.

4.4.4. Cancelled Day-off/Holiday Pay

Every employee shall be provided with a rest period of

twenty-four (24) hours after every six (6) consecutive normal

working days. Work performed on a regular holiday shall be

83
compensated with an additional compensation equivalent to 100%

of his regular salary. Work performed on an employee’s rest days

or on a special holiday shall be paid an additional compensation of

30% of his regular salary.The following shall be considered regular

holidays:

 New Year’s Day - January 01

 Maundy Thursday - movable date

 Good Friday - movable date

 ArawngKagitingan - April 09

 Labor Day - May 01

 Independence Day - June 12

 National Heroes Day - last Sunday of August

 Ramadan - movable date

 Bonifacio Day - November 30

 Christmas Day - December 25

 Rizal Day - December 30

The following shall be considered special holidays:

 Eid'lFtr – movable date

 Eid'lAdha – movable date

 Quezon City Day – August 19

 All Saints Day - November 01

 Last day of the Year - December 31

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4.4.5. 13th Month Pay

The 13thmonth pay of an employee which shall be equivalent

to 1/12 of his basic salary earned within a calendar year shall be

given not later than December 24 of each year.

4.4.6. Paternity and Maternity Leave

Paternity and maternity leave benefits as provided by law

shall be given to every employee entitled thereto, upon complying

with all the requirements of the company and upon proper

verification by the Company’s duly authorized representatives.

4.4.7. SSS/PHIC/HDMF Benefits

Benefits under SSS/PHIC/HDMF law shall be granted in

accordance with applicable laws. Implementation of procedures

relative to entitlement of said benefits should be done in

accordance with the regulations to be promulgated by the

management.

4.4.8. Hospitalization Plan

Regular employees shall be provided with hospitalization

plan with a respectable Health Maintenance Organization under

terms and conditions to be solely decided by the company.

4.4.9. Accident Insurance

Regular employees are enrolled by the Company under a

reputable Insurance Organization. Any accident incurred whether

85
 work-related or not shall be compensated by this Insurance firm.

This plan shall be on employer-employee participating basis.

4.4.10. Retirement Benefits

Retirement pay benefits as provided by law shall be given to

all qualified employees upon their retirement from the company.

4.4.11. Bereavement Assistance

If an immediate family member of a regular employee

passed away, he shall be given a financial assistance of P5000.00

upon complying with all the requirements of the company and

verification by its authorized representative.

4.4.12. Other Incentives and Awards

Awards and certificates of recognition, such as Crew of the

Month, Best in Attendance, Most Punctual Employee, Model

Employee of the Year and the like shall be given the discretion of

management.

Code of Ethics

1. Hygiene and Sanitation

All employees must observe must observe the highest standard of

hygiene and sanitation. Employees must be well-groomed and continue with

their work, wearing clean and proper attire. For this purpose, the tem “well-

groomed” shall mean proper haircut, cut fingernails, use deodorant, and clean

86
 and regularly washed hands. For this purpose, the term “clean and proper

attire” shall likewise include newly-washed and properly-ironed attire, no

excessive dirt on clothes and shoes, and proper and complete company

uniform worn properly.

2. Arrival and Departure of Employees

All employees regardless of status and rank must submit all personal

belongings for inspection upon entering the company premises. Inspection

will include a tickler which shall list all contents of his bag, down to the

smallest detail. All personal belongings are restricted within the locker area

while the employees on-duty. It is strictly prohibited to bring in any personal

belongings based on the tickler as well as body frisking.

3. Procedure for Notices/Bulletin Boards

Management shall post all notices, announcements and memoranda of

general application on the bulletin board. Ignorance is not an excuse and it is

incumbent on each employee to regularly check the bulletin boards for new

notices, announcements or memoranda. No employee is allowed to post or

remove any document on the bulletin board without the prior permission from

the management

4. Notice of Disciplinary Action

In accordance with the due process requirements of the Labor Code,

as amended, all employees found or reported to have committed a violation of

the company rules and regulations shall be given a written notice to explain,

and shall be given the opportunity to explain why no disciplinary action should

87
 be imposed against him. Thereafter, any disciplinary action to be imposed by

the management shall again be indicated in writing and duly furnished to the

affected employee.

5. Code of Conduct

Without in any limiting the prerogative of the company to amend,

modify, revoke, or add to the following list of offenses, the following acts and

mere attempts to commit such acts, even if unsuccessful, shall warrant the

corresponding disciplinary actions.

5.1. Kinds of Penalties

Employees are subject to penalties according to their violations

made during their employment.

5.1.1. Written Report of Warning (WR)-It is the notice calling all the

attention to the offense and warning the offenses against repetition of

such violation in the future.

5.1.2. Suspension (3D/6D/9D)-If a worker has committed offense for the

second or third time, he is subject to suspension. He will be detached

from the organization with the designated period of time without

payment.

5.1.3. Termination (TR)-Termination will be given to employees who

have committed a major offense. The employee will be dishonourably

separated from the organization.

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 Table 49
Employee Offense List
Offenses WR 3D 6D 9D TR
st nd rd th th
1. Tardiness 1 2 3 4 5
st nd rd th th
2. Absence without leave 1 2 3 4 5
st nd rd th th
3. Loitering or unauthorized leaving of post 1 2 3 4 5
st nd rd th th
4. Extending break period 1 2 3 4 5
st nd rd th th
5. Unauthorized use of company time for 1 2 3 4 5
personal pursuit
st nd rd
6. Disobedience to superior 1 2 3
st nd rd th th
7. Negligence or carelessness 1 2 3 4 5
st nd rd th th
8. Unauthorized use or misuse of company 1 2 3 4 5
property
st nd
9. Willful destruction of company properties 1 2
st nd rd th
10. Discourtesy towards consumers, 1 2 3 4
suppliers, superiors and co-workers
st nd
11. Using profane language or obscene 1 2
language to superiors
st
12. Stealing or attempting to steal properties 1
of the company or of the co-workers
st nd rd th
13. Failure to comply with company rules and 1 2 3 4
standards on security & safety and Health
& Sanitation
st nd rd th
14. Failure to comply with health, security 1 2 3 4
andsafety requirements of the company
st
15. Immortality or scandalous acts 1

Internal Controls

1. Administrative Controls

1.1. Proper designation of each work to authorized employees.

1.2. Implementing average handling time in conducting services for the

customers not to wait too long.

1.3. Conducting regular inspection of equipment.

1.4. Display of signage for the area to be organized and safety precautions to

prevent accidents.

1.5. Providing disaster recovery plans to be used in case of emergency.

89
2. Accounting Controls

2.1. Allow only authorized employee to make cash deposits, and require this

employee to make deposits as soon and as frequently as possible.

2.2. Keep records of all deposits and compare them to your bank statement

each month.

2.3. Hold cash in a secure location when it is on hand.

2.4. Keep prepared deposits in a locked safe until the deposits are made, and

secure cash registers with individual authentication so that you know who

accessed which register at which times.

2.5. Make sure that cash reporting responsibilities are spread out enough to

prevent theft by collusion.

2.6. Store copies of all cash register tapes, receipts, invoices, cancelled

checks and any other documentation that records cash transactions. Use

these documents as a paper trail to investigate cash losses and

discrepancies between internal records and bank statements.

2.7. Implement physical and electronic security measures to ensure the safety

of financial information. Store sensitive documents in secure areas, such

as locked filing cabinets that are accessible only to select employees.

2.8. Protect financial data stored on your company network by hiring a

network administration team or contracting with a third-party network

security company. Anyone with physical or electronic access to financial

data can alter, replace, steal or destroy evidence of theft or other financial

mismanagement.

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 Legal and Taxation Aspects

The legal requirements for starting a business in the Philippines depend

on its type of business and industry. Partnerships and corporations are required

to be registered with the Securities and Exchange Commission (SEC). Usually,

the BIR and the City/Municipality Office require the certificates of registration with

the SEC or DTI before a business can be registered with them. Thus, you need

to register through those offices to start commencing your business. The

following are the basic requirements to start commencing your business in the

Philippines:

Legal Requirements

1. Manila City

 Business Permit

 Barangay Business Clearance

 Lease Contract

 Location Clearance

 Picture of Establishment

 Fire Clearance

2. BIR

 2316 Form

 1702 Form

 1903 Form

 1907 Form

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 3. SSS

 R-5

 R-1

 R-1A

4. DTI
 Application for Partnership

 Business Name Registration Form

5. SEC

 Articles of Partnership

 Registration Data Sheet

Labor Laws for Employees

Employers, including small businesses, may implement policies and

impose terms and conditions of employment as they deem fit given their

operating and profitability requirements. These policies and employment terms

and conditions however must be consistent with mandated labor policies set forth

in the Labor Code of the Philippines.

Under the Labor Code, your employees are entitled to compensation or

wages, overtime pay, holiday and premium pay, service charges and tips in

service businesses, SSS, EC and NHI remittances, service incentive leaves, and

retirement pay.

Art. 82. Coverage. The provisions of this Title shall apply to employees in

all establishments and undertakings whether for profit or not, but not to

government employees, managerial employees, field personnel, members of the

92
family of the employer who are dependent on him for support, domestic helpers,

persons in the personal service of another, and workers who are paid by results

as determined by the Secretary of Labor in appropriate regulations. As used

herein, "managerial employees" refer to those whose primary duty consists of the

management of the establishment in which they are employed or of a department

or subdivision thereof, and to other officers or members of the managerial staff.

Art. 83. Normal hours of work. The normal hours of work of any employee

shall not exceed eight (8) hours a day.

Art. 84. Hours worked. Hours worked shall include (a) all time during

which an employee is required to be on duty or to be at a prescribed workplace;

and (b) all time during which an employee is suffered or permitted to work. Rest

periods of short duration during working hours shall be counted as hours worked.

Art. 102. Forms of payment. No employer shall pay the wages of an

employee by means of promissory notes, vouchers, coupons, tokens, tickets,

chits, or any object other than legal tender, even when expressly requested by

the employee.

Art. 103. Time of payment. Wages shall be paid at least once every two

(2) weeks or twice a month at intervals not exceeding sixteen (16) days. If on

account of force majeure or circumstances beyond the employer’s control,

payment of wages on or within the time herein provided cannot be made, the

employer shall pay the wages immediately after such force majeure or

circumstances have ceased. No employer shall make payment with less

frequency than once a month.

93
The payment of wages of employees engaged to perform a task which cannot be

completed in two (2) weeks shall be subject to the following conditions, in the

absence of a collective bargaining agreement or arbitration award:

1. That payments are made at intervals not exceeding sixteen (16) days,

in proportion to the amount of work completed;

2. That final settlement is made upon completion of the work.

Art. 104. Place of payment. Payment of wages shall be made at or near the

place of undertaking, except as otherwise provided by such regulations as the

Secretary of Labor and Employment may prescribe under conditions to ensure

greater protection of wages.

Art. 105. Direct payment of wages. Wages shall be paid directly to the

workers to whom they are due, except:

1. In cases of force majeure rendering such payment impossible or under

other special circumstances to be determined by the Secretary of

Labor and Employment in appropriate regulations, in which case, the

worker may be paid through another person under written authority

given by the worker for the purpose; or

2. Where the worker has died, in which case, the employer may pay the

wages of the deceased worker to the heirs of the latter without the

necessity of intestate proceedings. The claimants, if they are all of age,

shall execute an affidavit attesting to their relationship to the deceased

and the fact that they are his heirs, to the exclusion of all other

persons. If any of the heirs is a minor, the affidavit shall be executed

94
 on his behalf by his natural guardian or next-of-kin. The affidavit shall

be presented to the employer who shall make payment through the

Secretary of Labor and Employment or his representative. The

representative of the Secretary of Labor and Employment shall act as

referee in dividing the amount paid among the heirs. The payment of

wages under this Article shall absolve the employer of any further

liability with respect to the amount paid.

Art. 114. Deposits for loss or damage. No employer shall require his

worker to make deposits from which deductions shall be made for the

reimbursement of loss of or damage to tools, materials, or equipment

supplied by the employer, except when the employer is engaged in such

trades, occupations or business where the practice of making deductions or

requiring deposits is a recognized one, or is necessary or desirable as

determined by the Secretary of Labor and Employment in appropriate rules

and regulations.

3. Employee benefits laws

Art. 85. Meal periods. Subject to such regulations as the Secretary of

Labor may prescribe, it shall be the duty of every employer to give his employees

not less than sixty (60) minutes time-off for their regular meals.

Art. 87. Overtime work. Work may be performed beyond eight (8) hours a

day provided that the employee is paid for the overtime work, an additional

compensation equivalent to his regular wage plus at least twenty-five percent

(25%) thereof. Work performed beyond eight hours on a holiday or rest day shall

95
be paid an additional compensation equivalent to the rate of the first eight hours

on a holiday or rest day plus at least thirty percent (30%) thereof.

Art. 90. Computation of additional compensation. For purposes of

computing overtime and other additional remuneration as required by this

Chapter, the "regular wage" of an employee shall include the cash wage only,

without deduction on account of facilities provided by the employer.

Art. 99. Regional minimum wages. The minimum wage rates for

agricultural and non-agricultural employees and workers in each and every

region of the country shall be those prescribed by the Regional Tripartite Wages

and Productivity Boards. (As amended by Section 3, Republic Act No. 6727,

June 9, 1989).

Income Taxes

Under the National Internal Revenue Code (NIRC), the business is

considered as a partnership, or in NIRC terms, as a corporation. From Section 27

of the NIRC, except as otherwise provided in this Code, an income tax of thirty

percent (30%), effective January 1, 2009, is hereby imposed upon the taxable

income derived during each taxable year from all sources within and without the

Philippines by every corporation. The business will use a calendar year for tax

purposes.

SEC. 145 Retirement of Business - A business subject to tax pursuant to

the preceding sections shall, upon termination thereof, submit a sworn statement

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of its gross sales or receipts for the current year. If the tax paid during the year

be less than the tax due on said gross sales or receipts of the current year, the

difference shall be paid before the business is considered officially retired.

SEC. 146 Payment of Business Taxes - The taxes imposed under Section

143 shall be payable for every separate or distinct establishment or place where

business subject to the tax is conducted and one line of business does not

become exempt by being conducted with some other business for which such tax

has been paid. The tax on a business must be paid by the person conducting the

same.

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