Closing a Business

Losing money on a not-so profitable business? This section provides information on the procedures of terminating your business.

If you are looking for a business idea to start a new business, just check out theBusiness Ideas section. 

What are the requirements for closure of business or cessation of operations?

Department of Trade and Industry (DTI)

Do we still need to inform DTI when we close our business?
Yes, you must apply for cancellation of your registered business name (BN).

What are the requirements for Voluntary Cancellation (by the Sole Proprietor)?

  1. Submission of Other BN-Related Application Form prescribed in Annex D signed by the registered BN owner;
  2. Presentation of one (1) valid ID of the BN owner as listed in Annex A;
  3. Submission of a declaration under oath that the cancellation is not intended to defraud creditors and that he/she has no outstanding and pending financial obligation in connection with his/her business or that he/she has notified all the creditors of such cancellation, as the case may be;
  4. Submission of Authorization Letter upon filing of the application if filed by a representative and presentation of the authorized representative’s valid ID as listed in Annex A; and
  5. Payment of fee prescribed in Annex E.

What are the requirements for Voluntary Cancellation (by the Corporation/Partners)?

If dissolved at the Securities and Exchange Commission (SEC),

  1. Letter request signed by the authorized signatory (Board Resolution for the authorized signatory)
  2. Certified photocopy of the SEC certificates of dissolution of the corporation/partnership
  3. Original copy of the business name certificate of registration 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)

If BN Registration Only,
Corporate Name:

  1. Letter request signed by the authorized signatory (Board Resolution for the authorized signatory)
  2. Board resolution/partnership agreement for the cancellation of the registered business name stating that the Corporation/Partnership is retiring from business; surrendering the business name certificate for cancellation and that at the time of closure of establishment the business has no outstanding financial obligation, or a certified copy of the Certificate of Dissolution (if applicable)
  3. Original copy of the business name 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)

Adopted Name:

  1. Letter request signed by the authorized signatory (Board Resolution for the authorized signatory)
  2. Board Resolution/Partnership agreement for the cancellation of the registered business name, stating the reason/s for the cancellation that the corporation/partnership has no outstanding financial obligation at the time of closure in connection with the operation of the said business and if there were creditors copy of notice to them
  3. Original copy of the business name 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)

You may refer to the BNRS portal for information materials on business name registration and other related transactions. 


Local Government Units (LGUs)
Procedures on closing a business may vary between LGUs. But to give an idea, click here for Pasay City LGUs’ requirements. 

  • Affidavit of Gross (reason for and date of closure)
  • Mayor’s Permit
  • Financial Statement/ ITRllll
  • Sketch
  • Latest Payment

Bureau of Internal Revenue (BIR)
Application for Closure of Business/Cancellation of Tax Identification Number (TIN)
Tax Form 
BIR Form 1905 – Application for Registration Information Update

Documentary Requirements:

  • Letter of request stating reason for termination of business
  • Original Certificate of Registration
  • Books of Accounts
  • Inventory List of Unused Receipts and Invoices
  • Unused Receipts and Invoices for cancellation
  • Board Resolution/Notice of Dissolution (if Corporation/Partnership)

Additional Requirements in Case of Death of Individual Taxpayer:

  • Death Certificate
  • Payment of Estate Tax, if any

Procedures:

  1. Taxpayer applicant files BIR Form 1905, together with the attachments at the Revenue District Office (RDO) where they are registered within ten (10) days from retirement of business.
  2. Taxpayer files short period return for income tax purposes.
  3. RDO verifies if taxpayer has open cases reflected in the Integrated Tax System (ITS). If YES, ask taxpayer to submit required returns and pay the corresponding tax due/s and penalties if any.
  4. RDO verifies if taxpayer has delinquent cases at the Assessment, Collection, and Legal Divisions of the Region.
  5. RDO verifies if taxpayer has delinquent cases at the Collection Enforcement Division, BIR National Office.
  6. RDO requests for Letter of Authority to investigate internal revenue taxes for all un-audited taxable years prior to cancellation of business.
  7. Assigned Case officer conducts investigations for period/s covered in the issued Letter of Authority.
  8. Taxpayer complies with requirements of audit and pays corresponding deficiency taxes resulting from audit using Form 0605.
  9. RDO issues tax clearance for closure of business.
  10. RDO updates ITS and cancels TIN of taxpayer for non-individual taxpayer.


Department of Labor and Employment (DOLE)

  • Service of a written notice to the employees and the DOLE at least one (1) month before the intended date of closure/cessation
  • The closure or cessation of business operations is bona fide in character.
  • Payment to the employees of termination pay amounting to at least one-half (1/2) month pay for every year of service, or one (1) month pay whichever is higher, perPhilippine Labor Code mandate.

Bangko Sentral ng Pilipinas (BSP)
Requirements on Pawnshop Closure:

  1. Closure shall be after three (3) months following the maturity of the last loan or pledge, or after last pawn shall have been sold or disposed of in accordance with Section 4182P of the Manual of Regulations for Non-Bank Financial Institutions (Pawnshops).
  2. Submission of the following documentary requirements –

a. Notarized statement stating that:
The pawnshop’s books of accounts, reports, and documents shall be preserved for at least three (3) years from date of last entries;

  • All unused accountable forms have been destroyed to prevent their unauthorized use;
  • Owner/Partners/President of the pawnshop shall be held liable for present or future claims arising from its pawnbroking transactions; and
  • All outstanding pawns have been redeemed/sold at public auctions, or otherwise disposed of in accordance with law

b. Copy of the pawnshop’s application for retirement of business approved by the licensing authority of the locality of operation
c. Original BSP Certificate of Acknowledgment/Registration issued to the pawnshop
d. Remittance of penalties or BSP assessments on the pawnshop such as non-submission/delayed submission of required reports, if any.