WHY IS IT CRUCIAL TO OFFICIALLY RETIRE YOUR BUSINESS WHEN NO LONGER OPERATING?

Failing to formally retire a business in the Philippines would bring future disadvantages as the business entity continues to incur penalties, interest, and charges. Local and national agencies assume that the entity has been running and arguing that it is not operating is remotely valid.

Hence, to avoid build-up of liabilities from agencies such as BIR, SSS, PH, HDMF, and the LGU, the business name should be retired. The closure will also release the business and its owner from any future fraud representation by any person formerly connected to it. It also avoids liability to employees up to the date of formal closure and lessens probability of labor lawsuit compared to not having it retired.

What are the requirements to retire a business?

• For LGU's here are more or less what its business retirement section requires: 1. Notarized Application Form; 2. Latest Original Copy of Business Permit and Business Tax Receipt; 3. Barangay Certification for Closure; 4. SPA Authorization if Filed by Representative; ID Photocopy of Representative and Owner; 5. Board Resolution for Business Closure (if corporation or partnership); 6. BIR Certification; SSS, PH, HDMF Certifications; 7. Contract of Lease of Rented Place of Business; 8. And other which may be required.
• For BIR prepare the following documents: 1. BIR Form for Cessation of Business; 2. Detailed Closure Request Letter; 3. Original Copy of Certificate of Registration (COR); 4. Books of Accounts; 5. Unused and Used Official Receipts or Sales Invoices; 6. Asked For Receipt Poster; 7. Board Resolution for Closure (if partnership or corporation); 8. Authority to Print; 9. And others which may be required.
• For DOLE and employees both should be well informed in advance thru formal letters on the impending business closure. Equally important, also submit letters to SSS, PH, HDMF informing them of business closure to avoid incurring monthly contribution dues for employees. Always bring contribution payment receipts when filing closure with these agencies for validation purposes.
• DTI or SEC for cancellation of business name registration bring the original copies of DTI Certificate or SEC Certificate, By-Laws, Articles of Incorporation, Board Resolution, Audited Financial Statements and other which may be required.

The information above is a general guideline only. For specifics, visit the webpages of the agencies to get updated and complete information regarding business closure's steps and requirements. Properly retiring a business (especially if personal TIN is directly on it) avoids future headache plus it saves much time and money in the future.

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