3. Registration of Contractors

Substantial Capital

Historically, under D.O. No. 18-02, it refers to capital stocks and subscribed capitalization in the case of corporations, tools, equipment, implements, machineries, and work premises, actually and directly used by the contractor or subcontractor in the performance or completion of the job, work or service contracted out (D.O. No. 18-02, Sec. 5)

Under current D.O. No. 174-17, substantial capital refers to paid-up capital stocks/shares of at least Five Million Pesos (P5,000,000.00) in the case of corporations, partnerships and cooperatives; in the case of single proprietorship, a net worth of at least Five Million Pesos (P5,000,000.00). (D.O. No. 174-17, Sec. 3, ¶(i))

Historically, under D.O. No. 18-02: Capital stocks and subscribed capitalization in the case of corporations, tools, equipment, implements, machineries and work premises, actually and directly used by the contractor or subcontractor in the performance or completion of the job, work or service contracted out.

The law does not require both substantial capital and investment in the form of tools, equipment and machineries. This is clear from the use of the conjunction “or.” If the intention was to require the contractor to prove that he has both capital and the requisite investment, then the conjunction “and” should have been used. (New Golden Builders & Dev’t Corp v. CA, et al., G.R. No. 154715, 2003)

Procedure for registration

• The Regional Office or the Bureau shall act on the applications within 5 days from receipt of the application.
• The Regional Office or Bureau shall approve the application and issue the certificate of registration or deny the application for failure to comply with the requirements.

If the supporting documents are not complete, or are not verified under oath, the Regional Office or the Bureau shall notify the applicants in writing of the requirements needed to complete the registration.

NOTE: If the applicant fails to complete the requirements within 10 days from receipt of notice, application is denied without prejudice.