Scribd
Upload
21 views4 pages

Step by Step Guide On How To Close A Business in The Philippines

Uploaded by

cheryl vallespin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
21 views4 pages

Step by Step Guide On How To Close A Business in The Philippines

Uploaded by

cheryl vallespin
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
You are on page 1/ 4

Step by Step Guide on How to Close a Business in the Philippines

Closing a business in the Philippines is just not plain stopping – like no


more selling or offering of services. You need to have proper closure
with BIR and other government agencies especially if your business is
registered and has been paying taxes.

Parang relationship lang yan, if-mag-break-up kayo, mag-usap kayo,


wag kayong mang-ghost. Wag nyong i-ghost si BIR. If you want to know
the proper procedures in closing a business, here’s a guide on How
to Close a Business in the Philippines.

Photo by lucas law on Unsplash

When you start a business, it’s also good knowledge to know how to
close it. We don’t want regrets, right? Baka may mga requirements sa
closure na tinapon nyo or di nyo pinahalagahan, may penalty yan if di
complete. Opening a business is easier than closing. You’ll need to
report to BIR plus give your books and receipts back. If you are not yet
processing, you will still need to report your quarterly income tax even
though it’s zero. Better do this ASAP.

P.S. This article is aimed for small businesses. In case you are a
corporation or partnership, it’s better to ask for assistance from your
accountant.

Requirements to Close a Business in the


Philippines
For all

 Valid ID of the business owner


 Letter of Request for Closure of Business – see sample below – you can have
your copy and signed or noted by the Barangay, Municipal, DTI, BIR
Dear Sir/Madam,

I am (your name), proprietor of (business name) that is located in


(address) since (start of business).

I would like to request the termination of my business. I am closing it due


to the following reasons:

 I have losses that are hard to recover due to the pandemic


 I can’t hire employees as it would give me the additional expense and I can’t
sustain the business myself
 Extra funds for my business has been used for personal necessities

The last day of my business has been on (day). I hope your good office
grants my request.

Sincerely,

Name of Owner

CC:

1. Brgy. Captain
2. Mayor’s Officer
3. DTI
4. BIR

For Mayor’s Office

 Barangay Clearance that states that the business located in said Barangay has
already been closed
 Business Permit – the one that was given to you by the Mayor’s office when you
started the business

For DTI

 Affidavit of Cancellation of Registered Business Name – same with the letter


of request; however, this is notarized by a lawyer
 Original copy of B.N. certificate
For BIR

 Certification of Closure from the Mayor’s Office – you can get this after
submitting the letter of request as well as the Barangay Clearance. Make sure
your Request letter has been signed his portion on your letter
 DTI Certificate of Cancellation – a letter of request is needed, you can do this
online through the DTI BNRS Website
 Form 1905
 List of ending inventory of goods, supplies, including capital goods
 Inventory of unused Sales Invoices or Official Receipts
 Unused Receipts and Invoices
 Certificate of Registration (Form 2303) – must be Original
 “Ask for Receipt Notice”
 Books of Accounts – your journals and ledgers
 Income Tax Returns for the last 3 years

Steps to Close your Business in the


Philippines
STEP 1: After stopping your operations, prepare your letter of request
and go to the Barangay to ask for a Barangay Clearance.

STEP 2: Proceed to the Municipal Hall to ask for a Certification of


Closure. You can present your documents.

STEP 3: Go to the DTI BRNS website and also proceed to the


cancellation of your business name. You may also go to the DTI Office
and present your documents and ask a DTI Certificate of Cancellation.

STEP 4: Before going to the BIR, fill-up the form 1905. Prepare also the
documents asked. You can put your documents in a box so that it’s
easier for you to bring to the RDO.

STEP 5: Off you go to the Regional District Office where you registered.
Ask the BIR officer on where you will submit your documents –
sometimes it at the TIN officer as they will cancel your business or the
Examiner to check your documents.
If you have missing documents, you’ll have a penalty of PHP 1,000; if
you skipped filing returns, it might be more. They might communicate to
you in case you need to submit something. Settle your dues. After
everything has been cleared; no more open cases, etc., and then you
will be contacted by the in-charge.

STEP 6: Go back to the RDO and get your Certificate of No Liability.


This means you have no more liability or utang to the BIR.

Additional note: In case you have employees and pay contributions for
them, you will also need to report to SSS, PhilHealth and HDMF.

And that’s how to close a business in the Philippines. If you are a


corporation or partnership, then you’ll have to pass through SEC rather
than DTI. It seems simple, but it could take a month to process
everything – much longer than opening a business. Its sad saying
goodbye, but I hope you find a better venture or a more profitable
business. Good luck!

STEP BY STEP

You might also like