CLOSURE OF BUSINESS

Undergoing business closure can be a tedious task as compared to the business

registration process, but it must be done in order to legitimize the closure and to avoid
any penalties and possible further tax assessment. To begin the process of business
closure, owners must give notice to his/ her employees and different government
agencies such as:

I. Department of Labor and Employment (DOLE)

Business owners must inform his/ her employees and Department of Labor and
Employment (DOLE) one (1) month prior to the intended date of closure. Further, he/
she must give the separation pay of his/ her employees which is equivalent to at least
one month pay or at least 1/2 month pay for every year of service, whichever is higher,
except when closure is due to serious business losses. In case there is only partial
closure, separation pay shall be equivalent to at least ½ month pay for every year of
service.
If there is only temporary closure, the business owner must submit the Establishment
Report Form given by DOLE and do the following:
1. Accomplish DOLE Form in two copies when filing a notice of Temporary Closure.
The report is considered as duly filed when the complete list of workers affected
is made part of the submission.
2. The form should be submitted to the DOLE Regional/Provincial/Field Office at
least thirty (30) calendar days prior to the effectivity of temporary closure or at
least one (1) week prior to the implementation of FWA.
3. Page 1 of the form should contain general information about the establishment
and the number of workers affected.
4. Page 2 of the form should enumerate the names of workers affected, their
addresses and contact numbers, position title and salary.
5. Total number of workers listed should equal the total number of workers affected
as reported in the page.

II. Barangay Level

Owners who intend to close their businesses must also request the cancellation of the
Barangay business permit issued to them. To do so, the following documents must be
submitted to the Barangay that issued the business clearance:
1. Barangay Clearance, latest (original and copy)
2. Letter of Request for Retirement
III. Local Government Unit (LGU)
Business owners must apprise the Local Government Unit (LGU), where the business is
located, for its closure. Different LGUs require different documents. Below are some of
the documents required by different LGUs for the application of business’s retirement:

For Quezon City:

Business owners are required to apply at the City Treasury Department – Examination
Division for the declaration of closure of business.
Requirements in Getting a Business Retirement
1. Duly accomplished retirement application form with Location Map (3 pages/set;
originally signed by the Owner/President or Vice President)
2. Tax Bill & Official Receipts (3 years) (original)
3. Latest Business Permit (original)
a. If single proprietorship, original Affidavit of closure with exact date of closure
b. If partnership, original partnership dissolution with exact effectivity date of closure
signed by all partners
c. If corporation, Original Secretary’s certificate or Board Resolution on closure or
transfer of business with exact date of closure
4. Valid ID
a. If single proprietorship, ID of the owner
b. If partnership, all IDs of partners are required
c. If corporation, ID of President (original must be presented & photocopy to be
submitted) and authorization letter from the owner and valid ID of the authorized
representative
5. Barangay Certificate with Exact Effectivity Date of Closure
6. BIR Certificate of Registration (original must be presented & photocopy to be
submitted)
7. Certified Breakdown of Sales, if there are two or more line of business/branches
& if AFS is consolidated (original)
8. Proof of business tax payment/tax bill/permit issued by the other LGU where
other operations are situated (original must be presented & photocopy to be
submitted)
9. Latest ITR with AFS on or before closure from the last payment of business
operation for years 20___ to 20___ (original must be presented & photocopy to
be submitted)
10. VAT Returns or Percentage Tax Returns 201___ (original must be presented &
photocopy to be submitted)
 11. Book of Accounts (to be presented upon evaluation/actual inspection and
examination)

Process in Securing Business Retirement

1. Submit and duly fill-up the application forms and all the required documents. You
will be given a claim stub
2. After 5-7 days, you can claim your Assessment forms at the Treasurer’s Office
3. Pay your final billing and certification at the Treasurer’s Office cashier
4. Claim your Business Retirement Certification

CONTACT NUMBER OF TREASURY OFFICE

Ms. Ruby Rosa Guevarra
City Treasurer
Annex Building, Quezon City Hall Compound,
988-4242 loc. 8157
Business Retirement Section
Mr. Danilo Santiago
Acting Section Chief, Business Retirement
988-4242 loc. 8264/8266

For Taguig City:

Apply for Businesses Closure/ Retirement of Business at the Treasury Department.
REQUIREMENTS FOR SINGLE PROPRIETORSHIP
1. Affidavit of business closure
2. Previous Mayor’s Permit
3. Latest payment/Official Receipt
4. Barangay Certificate of Closure
5. Sketch of place of Business
REQUIRMENTS FOR CORPORATION
1. Secretary’s Certificate or Board resolution
2. Previous Mayor’s Permit
3. Latest payments/official Receipt
4. Barangay Certificate of Closure
5. Vat returns/Gross Sales
6. Audited Financial Statement from 5 years backward

For Pasay City:

Requirements For Closure Of Business:
1. Affidavit of Gross
a. Reason for Closure
b. Date of Closure
2. Mayor’s Permit
3. Financial Statement/ ITR
4. Sketch
5. Latest Payment
Province of Bulacan
Requirements For Closure Of Business:
1. Barangay Certificate for Business Closure
2. Latest Business Permit (Original)
3. Latest Business Plate
4. BIR Returns (monthly, Quarterly, Income Tax Returns)
5. Notarized Gross Sales
6. Location Sketch

IV. Bureau of Internal Revenue (BIR)

To avoid being assessed of any further taxes while the business is already closed,
business owners must apply for Closure of Business and Cancellation of TIN before the
Bureau of Internal Revenue (BIR). The application must be filed at the RDO where TIN
was registered and BIR Form 1905 must be submitted with the following documents:
1. Notice of closure or cessation of business;
2. List of ending inventory of goods, supplies, including capital goods;
3. Inventory of unused sales invoices/official receipts (SI/OR);
4. Unused sales invoices/official receipts and all other unutilized accounting forms
(e.g., vouchers, debit/credit memos, delivery receipts, purchase orders, etc.)
shall be physically submitted to the RDO where the Head Office is registered or
where the Authority to Print (ATP) was secured;
5. All business notices and permits as well as the COR shall be surrendered for
cancellation;
6. Other documents necessary to support the changes applied for.
The procedure at BIR is as follows:
1. All taxpayers who filed for cancellation of registration due to closure/cessation or
termination of business, except for branches, shall be subjected to immediate
investigation by the BIR office concerned to determine the taxpayer’s tax
liabilities.
2. For juridical persons, the TIN shall be cancelled at the time of the dissolution.
 3. The BIR district office of the head office of the dissolved entity shall inform all the
other BIR district office, where the branches are registered, of the
closure/cessation of the business.
4. To avoid generation of stop filer cases, the BIR district office, upon complete
submission by the taxpayer of the requirements shall:
a. “End date” the tax types of the taxpayer;
b. Destroy/shred in the presence of the taxpayer or his authorized representative,
the unutilized SI/ORs and other accounting forms by cutting them crosswise and
lengthwise at the middle thereof so that the same shall be divided into four (4),
ensuring that the same will no longer be used as originally intended; and
c. Return to the taxpayer the destroyed/shredded SI/ORs and other accounting
forms for burning and/or proper disposition.
d. The BIR distinct office shall issue a Tax Clearance to the taxpayer applying for
cancellation of TIN within ten (10) days from termination of its investigations
and/or full settlement of the taxpayer’s liabilities, if applicable

V. The Philippine Health Insurance Corporation (PhilHealth)

Further, business owners must inform The Philippine Health Insurance Corporation
(PhilHealth) of the Temporary Suspension of Operation or Termination/ Dissolution of
business.
If there was Temporary Suspension of Operation, the following must be submitted to the
PhilHealth:
1. Due to Bankruptcy,
a. Financial Statement or
b. Income Tax Return (ITR) for the year showing non-operation/no earnings or
c. Board Resolution must be submitted;
2. Separation of employee/s
a. Report on the Separation of the last employee/s and
b. Separation paper of last employee
3. Due to Fire / Demolition / Flood
a. Certification from the Fire Department of the municipality, or
b. Certification from City Hall
4. Due to Strike
a. Notice of Strike duly license by DOLE
If there was Termination / dissolution, the following must be submitted to Philhealth :
For single proprietorship
1. Approved Application of Business Retirement by the Municipal Treasurer’s
Office.
 2. Certification of Non-Operational of Business from the Municipal Treasurer’s
Office / BIR
For Partnership or Corporation
1. Deed of Dissolution approved by the Securities and Exchange Commission
(SEC) or
2. Certification of Non-Operational of Business from SEC/BIR or
3. Minutes of Meeting certified by the Corporate Secretary.
Cooperative
1. Dissolution of Cooperative duly received by Cooperative Development Authority
(CDA) or ƒ Minutes of the meeting duly certified by the Secretary; or ƒ
2. Certification of Non-Operational of Business from CDA/BIR

VI .Philippine Social Security System (SSS)

To get a clearance for the closure of the business from Philippine Social Security
System (SSS), business owners must submit the following:
For Single Proprietorship
– Approved Application for Business Retirement from the Municipal/City Treasurer’s
Office
In the absence of the above, any two (2) of the following:
1. Certification of Non-operation of Business from the Municipality/City Treasurer’s
Office or Bureau of Internal Revenue (BIR)
2. Lease Contract/Joint Affidavit of Termination of Lease Contract
3. Contribution Collection List (SS Form R-3) showing the separation of its
employee/s, duly received by the SSS within the first ten (10) days of the month
after the applicable quarter
4. Certification of Cancellation of Registration from the Department of Trade &
Industry (DTI)
5. Certification of Cancellation of Franchise from the Land Transportation &
Franchising Regulatory Board (LTFRB)
6. Certification from the Philippine Contractors Accreditation Board (PCAB)
7. Death Certificate registered with the Local Civil Registrar or issued by the
Philippine Consul, in case of death of the Owner
8. For Partnership/Corporation/Cooperative
– Certificate of Filing of Articles of Dissolution/Cancellation of Registration issued by the
Securities & Exchange Commission (SEC)/Cooperative Development Authority (CDA)
In the absence of the above, any two (2) of the following:
 1. Audited Financial Statements and Income Tax Return (ITR) showing
nonoperation/no earnings for the applicable period/s filed with the SEC or the
BIR within the prescribed period
2. Board Resolution approving the termination of business operation adopted within
the prescribed period and duly acknowledged received by regulatory agencies
(e.g. BIR, SEC, etc.)
3. SS Form R-3 showing the separation of its employee/s, duly received by the SSS
within the first ten (10) days of the month after the applicable quarter
4. Notification of business termination duly received by the SEC or the BIR within
the prescribed period
However, if there is only temporary suspension of business, any two (2) of the
following, whichever are applicable may be submitted:
1. Notification of suspension of operation duly received by the BIR within the
prescribed period
2. Audited Financial Statements and ITR showing non-operation/no earnings for the
applicable period/s filed with the SEC or the BIR within the prescribed period
3. Board Resolution approving the suspension of business operation adopted within
the prescribed period and duly acknowledged received by regulatory agencies
(e.g. BIR, SEC, etc.)
4. SS Form R-3 showing the separation of its employee/s duly received by the SSS
within the first ten (10) days of the month after the applicable quarter
5. Certification from the Fire Department/concerned unit of the municipality/city, in
case of destruction of corporate facilities due to fire/fortuitous event
6. Notice of Strike duly received by the Department of Labor & Employment (DOLE)
with a Certification that there was no operation/employees during the strike
7. Lease Contract/Joint Affidavit of Termination of Lease Contract
8. Certificate of Non-Renewal of Business License from the Municipal /City
Treasurer’s Office

VII. Home Development Mutual Fund (Pag-ibig)

Home Development Mutual Fund (Pag-ibig) must also be given notice of employer’s
change of legal personality. The following documents must be submitted:
Single Proprietorship to Corporation
1. SEC Certificate
2. Articles of Incorporation
3. Certificate of Cancellation as Single Proprietorship
Partnership to Corporation
1. Articles of Incorporation
 2. Deed of Dissolution of Partnership

VIII. Department of Trade or Industry (DTI)/ Securities And Exchange Commission

(SEC)
Finally, business owners must inform Department of Trade or Industry (DTI), if the
retiring business is a sole proprietorship or Securities And Exchange Commission
(SEC) if retiring business is a partnership or corporation.

For sole proprietorship, the following documents must be submitted to DTI for the
cancellation of the business name and registration:
1. Letter Request stating reason for termination
2. Affidavit of cancellation of the registered Business Name, stating the reason/s for
the cancellation and that the registered owner has no outstanding financial
obligation at the time of closure of establishment
3. Original copy of the BN certificate and the duplicate copy of the application form
(affidavit of loss if either the business name certificate and/or the duplicate copy
of the application form was lost)
For Partnership or Corporation, notice of dissolution must be given to SEC together
with the following:
1. Director’s Certificate – notarized and signed by majority of the directors certifying
the (i) amendment of the Articles of Incorporation reclassifying/ declassifying/
converting the shares of stock (ii) votes of the directors and stockholders, (iii)
date and place of stockholders’ meeting and (iv) the tax identification number of
the signatories which shall be placed below their names.
2. Amended Articles of Incorporation
3. Audited financial statements as of the last fiscal year except:
a. Where the applicant has ceased operations for at least one (1) year, submit:
i. AFS as of the last fiscal year of operation;
ii. Affidavit of non-operation certified under oath by the President and
Treasurer
b. Where the applicant has no operation since incorporation, submit:
i. Balance Sheet certified under oath by the Treasurer and President
ii. Affidavit of non-operation certified under oath by the President and
Treasurer
iii. Certificate of non-registration by the BIR
c. Where the applicant is a stock corporation with paid- up of less than P50,000,
submit its Balance Sheet as of last preceding fiscal year certified under oath by
the President and Treasurer
d. Where the applicant is a non-stock corporation with gross receipts of less than
P100,000 or a total assets of Less than P500,000, submit its Balance Sheet as of
last preceding fiscal year certified under oath by the President and Treasurer
4. Certification under oath executed by the President and Treasurer of the
corporation certifying that the dissolution is not prejudicial to the interests of
creditors and that there is no opposition from creditors.
5. BIR Tax clearance certificate
6. Publisher’s Affidavit of Publication
7. Clearances from other government agencies