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sole-proprietorship

Closing down  ›  Sole proprietorship

DTI · LGU · BIR

Closing a sole proprietorship

The shortest closure of the three, because there is no SEC stage. It is also the one where anything left unpaid attaches directly to you — the owner and the business are the same person in law.

At a glance

Agencies involved

DTI, barangay, city, BIR

SEC stage

None

Who carries what is left

The owner, personally and without limit

Typical duration

3–12 months

Prepare first

What to have ready before you file anything

Assembling this first is what turns a twelve-month closure into a four-month one.

Affidavit of closure, stating the exact cessation date DTI certificate of business name registration Latest business permit and official receipts of payment BIR Certificate of Registration All registered books of accounts Unused invoices and receipts, with an inventory list Filed returns for the open years, with proof of payment Financial statements up to the cessation date Lease termination or proof the premises were vacated Employee final pay and separation records, if you had staff

Agency by agency, in order

The city before the BIR. The BIR is the stage that determines how long the whole thing takes.

Step 1 · DTI and city hall

Business name and permit retirement

  • Cancel the DTI business name. File the cancellation with your certificate and the affidavit of closure. Letting the five-year registration simply expire leaves the name and the record hanging.
  • Barangay clearance for closure. From the barangay of the business address, confirming operations have ceased.
  • Apply for retirement at the city treasurer. Letter of request, affidavit of closure, latest permit, receipts, and gross sales or financial statements up to the cessation date.
  • Expect a final assessment. The treasurer computes local business tax to the closure date, and will collect any unrenewed years with surcharge and interest before issuing the certificate.
  • Surrender the permit and plate. The physical permit, sticker or plate goes back. Keep the certificate of retirement — the BIR will ask for it.
  • Repeat for every location. A second stall or branch is retired separately, by its own city.
Step 2 · Bureau of Internal Revenue

Cancelling your registration

  • File the registration update at your RDO. Applying to cancel the business registration, with the affidavit of closure and the city’s certificate of retirement.
  • Bring the filings current first. Every outstanding return for every open period, filed with its penalties settled. Nothing moves until the open cases are cleared.
  • Surrender the Certificate of Registration. The original 2303, plus the notice you were required to display.
  • Inventory and surrender unused invoices. A list of unissued receipts and invoices by serial number, submitted for destruction.
  • Submit the books of accounts. All registered books for the open years, for post-audit examination.
  • Expect a closure audit. The district examines the open years and issues an assessment, which must be settled before clearance.
  • Collect the clearance. The certificate confirming no outstanding liability is the document that proves the business is closed. Keep it permanently.
  • Your personal TIN survives. Cancelling the business registration does not cancel your TIN — you keep it as an individual taxpayer.
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If you had employees

  • Notice to staff and to DOLE. Written notice ahead of the closure date, served on both.
  • Separation pay where due. Payable when the closure is not the result of serious business losses. Document the basis either way.
  • Final contributions and termination reports. SSS, PhilHealth and Pag-IBIG brought current and each employee formally separated, so nothing continues to accrue.
  • Certificates and final pay. Withholding tax certificates, last pay computations and certificates of employment issued before the records are archived.

Until the BIR clearance is issued, the returns keep falling due

Stopping trade does not stop the filing calendar. File nil returns for every period between your cessation date and the day the closure is granted — otherwise each one becomes an open case that blocks the clearance you are waiting for.

What is still due →

We will close it so nothing follows you

Backlog filed, permit retired, books submitted, clearance obtained — and the certificate in your hands at the end of it.

Start the closure

Documentary requirements differ between revenue districts and cities, and change over time. Confirm current requirements with us before you file.