There are countless reasons why businesses close, it can either be bankruptcy, shift to different industries, migration to another country, or failure to comply with the law, but whatever reason is if you close a business it will undergo several legal processes because failure to do so may lead to penalties.
If you wanted to know how to legally close the business to avoid a penalty, this might help you.
Do note that closing a business isn’t easy. It’s the same as opening a business because you will be required to report it to different government agencies. But unlike opening a business with excitement, closing a business is a bit frustrating, heartbreaking, and time-consuming.
List of Government Agencies That You Need to Inform:
- Barangay Hall
- City Hall
- Bureau of Internal Revenue
- Securities and Exchange Commission (SEC)
Requirements Needed to Close a Business:
1. Barangay Hall
a. Barangay Clearance
b. Letter of Request for Retirement
c. Affidavit of Business Closure (must be notarized)
2. City Hall
a. Original Mayor’s Permit
b. Letter of Request for Retirement
c. Income Tax Return (3 years)
d. Board Resolution
e. Articles of Incorporation
f. Monthly / Quarterly BIR Returns
g. Official Receipts
h. Cedula
i. Certification of Business Closure (Barangay)
j. Affidavit of No Operation (If applicable)
k. Certification of Gross Sales
3. Bureau of Internal Revenue
a. BIR Registration Certificate
b. Request Letter for Termination
c. Books of Account
d. Invoices
e. Notice of Dissolution
f. Income Tax Return (3 years)
g. Verification Slip (CMS)
h. Form 1905 and 0605
i. Business Retirement Certificate
j. Authority to Print
k. Delinquency Verification Certificate
4. Securities and Exchange Commission
a. Audited Financial Statements
b. BIR Tax Clearance Certificate
c. Director’s Certificate
d. Articles of Incorporation
e. Certification by the President and Treasurer
f. Notarized Secretary’s Certificate
i. Publisher’s Affidavit of Publication
Here’s the Process:
Barangay Hall
1. Complete all the requirements needed beforehand
2. Visit your Barangay Hall
3. Submit your requirements
4. Your documents will then be checked
5. Once verified, you will be asked to pay the fee
6. Afterward, they will inform you of where you will get the Certificate of Closure.
City Hall
1. If you already have the Certificate of Closure from barangay, you may now proceed to the City Hall where you are registered
2. Get a Retirement form and fill it up
3. Once done, put a signature and notarize it
4. Submit the notarized form, associated with other documents
5. They will then check all the documents that you submitted, once checked. they will give you a claim stub with a follow-up date indicated
6. Go back to the City Hall on the follow-up date
7. Pay for the fees
8. Wait for your certificate to be released
Bureau of Internal Revenue
1. Visit the Revenue District Office (RDO)
2. Get a BIR form 1905
3. Fill it out and submit it associated with other documents
4. Proceed to the TIN issuance section and have your form 1905 stamped
5. Once done, they will give a date for follow-up, usually about a week
6. Come back to the date of your follow-up and wait for your Certificate of No Liability to be released
Securities and Exchange Commission
1. Proceed to SEC and submit all the requirements needed
2. Once verified, they will inform you to wait 3-4 weeks for your certificate to be released.
Closing a business process will definitely consume a lot of time, but it is a must if you don’t want bigger problems to occur in the future.
Helpful Articles:
Guide on How to Renew Your Business Permit
Guide on How to Apply for the Small Business Wage Subsidy Program (SBWS)
Low Cost But Profitable Business Ideas
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