SEC · LGU · BIR

Dissolving a partnership

Two stages that people conflate: dissolution ends the partnership relation, and winding up settles what it owes. Only after both, and after tax clearance, will the SEC record the partnership as closed.

At a glance

Agencies involved

SEC, barangay, city, BIR

Who must agree

All partners, per the articles

Who carries what is left

General partners, personally and solidarily

Typical duration

6–18 months

The order of payment

Creditors are paid before any partner sees a peso

Winding up follows a statutory ranking. Distributing to partners ahead of it exposes them personally to the creditors who were skipped.

First

Outside creditors, including the BIR and the city

Second

Partners, for advances made beyond their capital

Third

Return of each partner’s capital contribution

Last

Anything remaining, split as the articles provide

Prepare first

What to have ready

Notarised deed or articles of dissolution, signed by all partners The original Articles of Partnership and SEC certificate Audited financial statements as at the dissolution date List of creditors and their settlement, or an affidavit of no creditors Liquidation schedule showing the order of payment Latest business permit and receipts, per location BIR Certificate of Registration, books and unused invoices Filed returns and GIS for the open years Employee separation and final contribution records

Agency by agency, in order

Dissolve and wind up internally, retire the permits, clear the tax, then file with the SEC — which will not act without the clearance.

Step 1 · City hall

Retirement of business

Barangay clearance for closure at each address the partnership operated from.
Letter of request and the partners’ dissolution document filed with the city treasurer, together with the latest permit and receipts.
Gross receipts up to the dissolution date declared, supported by financial statements, so the final local tax can be computed.
Settle the final assessment, including unrenewed years with surcharge and interest, then surrender the permit and collect the certificate of retirement.

Step 2 · Bureau of Internal Revenue

Cancellation and tax clearance

Apply to cancel the registration at the RDO, with the dissolution document, the city’s certificate of retirement and the financial statements.
Bring every return current, including the period from dissolution up to the date clearance is issued. Open cases stop the application dead.
Surrender the Certificate of Registration, the unused invoices with their inventory, and all registered books for post-audit.
Expect the closure audit over the open years, and an assessment to settle before clearance is released.
Watch the liquidating distributions. Amounts returned to partners above their capital can be taxable — get the computation right before the money moves.
Obtain the tax clearance. This is the document the SEC requires. Without it the dissolution filing goes nowhere.

Step 3 · Securities and Exchange Commission

Recording the dissolution

File the dissolution documents — the notarised deed signed by all partners, the original articles and certificate, and the audited statements as at dissolution.
Attach the BIR tax clearance and the city’s certificate of retirement.
Show the creditor position. Either evidence that creditors have been paid, or an affidavit that none are affected. Where creditors are affected the route is longer and may require publication.
Keep the annual reports current until approval. The general information sheet and financial statements remain due while the application is pending — a lapse here delays your own dissolution.
Collect the certificate of dissolution. Only at this point is the partnership closed on the public record.

Step 4 · Employer agencies

People and contributions

Notice to employees and to DOLE ahead of the closure date.
Separation pay where due, with the basis documented, plus final pay and withholding certificates.
Termination reports and final remittances to SSS, PhilHealth and Pag-IBIG, so nothing keeps accruing per employee.

Dissolution does not release a general partner from what is unpaid

Liabilities that survive the winding up remain enforceable against general partners personally and solidarily. Meanwhile the returns keep falling due until clearance is issued — file them as nil rather than let them become open cases.

What is still due →

We will wind it up in the right order

Liquidation schedule, creditor settlement, permit retirement, tax clearance and the SEC filing — sequenced so no partner is left personally exposed.

Start the dissolution

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