Accounting Laws Memo Essay
Accounting Laws Memo
Re: Process and Laws that apply in Puerto Rico to establish a business corporation.
It is a pleasure to help and guide you through the process of regulations and steps in establishing a community pharmacy in Puerto Rico. This type of business is very regulated and includes both state and federal laws.
-The first thing that must be done is to get incorporated in the Department of State in accordance with the corporations law 164 of 2009 with a company name that is not registered yet and offering a physical address into which municipality will be the headquarters. Then a business social security issued by the Department of Treasury Internal Revenue Services must be obtained. This number will identify the corporation when doing business among other business and when paying taxes to the state and municipality.
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-A merchant registry number (Registro de comerciante) must be obtained also by the department of treasury, here you will specify the exact mailing and physical address and what type of business will be conducted under that corporation. Additional documents are needed:
Use Permit (Obtained in the municipality if it is autonomous, if not in OGP offices) and is granted by ARPE Fire Department endorsement (Extinguishers and emergency exits) Health department endorsement. (Requires a minimum of two bathrooms and at least one with the dimensions for handicapped persons.) Structure blueprints
CRIM certification (Centro de Recaudaciones de Ingresos Municipales)
-With a provisional patent issued when completed the above steps, then you will need to get the permits for the pharmacy licenses at the Health Department of Puerto Rico and AMSCA (Administracion de Servicios de Salud y Contra la Adiccion) and DEA (Drug Enforcement Administration)
Requirements for Pharmacy permits:
Regent or Ruling certified Pharmacist endorsed by the College of Pharmacist $75 biological License fee
$100 Pharmacy License fee
Requirements for AMSCA:
Health and Pharmacy permit
Medicine cabinet for controlled drugs
Requirements for DEA permit:
Fill all documents at the DEA website
– Once completed you must go to the municipality where the business is going to be and request the final patent to operate. Under the commonwealth of Puerto Rico, accounting principles are established by FASB (Financial Accounting Standards board). It is very important to follow these standards and laws established by the government to avoid any penalties and fines.
Accounts and deposits must be made under the same name of the corporation. (Act 981m)
Funds, Accounting, and tests accounts must be specified and communicate how the funds should be managed. This is verified by the Controller of Puerto Rico (Act 671i)
With the Commercial Registry (Registro de comerciante) a sales tax must be paid by the 10th of every month.
Income tax and employee social security must be informed every three months and the contribution retained of the employees is paid every month to the department of treasury.
Employee social security contribution is paid monthly to the IRS.
Every three months unemployment insurance fee and incapacity is paid to the Department of Labor.
Every six months insurance to the State Insurance Fund (Fondo del Seguro del Estado) must be paid. This is in accordance with Act 45, approved on April 18, 1935, known as the Compensation System for Occupational Accidents. This protects employees and covers the monthly payment to them in case of an accident in the workplace.
Public responsibility insurance to protect the corporation against third party accidents is highly recommended.
If you follow these steps and suggestions, I can assure you that you can get your business running and be assured that the laws are being followed. The
process may take some time, but it is worth the time and money in the future. PYMES are needed in the country for the local economy to progress, and I am more than welcome to help you in the process. My ultimate advice is to get a certified CPA to work with you in the accounting functions of the business to help minimize errors and fines when is time to pay.