Closing a sole proprietor business

im planning to sell my laundry shop, and i want to know the procedures in closing the said business, from dti, cityhall and bir ..dont know what to do.

also, is deed of sale enough to sell my shop? what will be the details on the deed of sale?

kindly help.

thanks in advance.

there is a process of merely transferring, but i recommend you file for closure to be sure. otherwise, if not properly transferred, screw ups may be made by the new owner where you will be liable.

each of these agencies, dti, mayor's permit division, and bir will have their own processes and forms to fill up.

do you have business debts? you will also have to comply with the bulk sales law: http://www.chanrobles.com/actno3952.htm

thanks for the reply,,

dont have current busines debts

AttyLLL,

I have a sole proprietary business only registered with the DTI and Baranggay Business clearance. Unfortunately, It has been non-profitable since the beginning. I really don't get why I need to file on closing the said business. What is it for and purpose? What If I just finish my contract at the leased space do I still need to close the said business?

Please advice. Thank you.

your tax reportorial requirements continue, along with with mayor's permit presumption that you are continuing if you don't report it to them.

AttyLLL,

It is only registered with the DTI and a baranggay clearance. No Mayor's Permit or BIR registration yet.

in that case, there's nothing to report to the bir and mayor's office, but that does not mean you were not obligated to register there in the first place.

Good day! I have a business that's been dormant for at least 10 years. I tried to close it then(1999 i think) because i've incurred losses but the lady staff at the BIR i talked to wants "a fee" to help me.
That discouraged me to fully close my business. I left it just like that and havent filed the necessary forms required by BIR(monthly, yearly etc) ever since.
Am i still liable after all these years and how can i fix it if i still am? Many thanks

I need help too. I want to close down a sole prop. business for my freelance work.

my problems are
1. di ko na renew ang registrations ko for BIR and City Hall for 2010 and 2011
2. ive lost most of my forms sa bir na i-file

yung penalty ba na babayaran is based sa income or may fixed priced doon?
my annual income from the business is only around 10-20k

kerwin, normally, their computer system will retain open matters. you will have to check.

spiral, there may be penalties. they may be based on your previous payments.

I have secured the closure certificates for the Baranggay, DTI, and City Hall. I also have the "Verification Slip For Transfer/Cancellation/Dissolution/Retirement of Business Registration/Change in Accounting Period" Form with the completed signatures and stamp from BIR officers:

Verification [tss],
Document Processing Section (DPS),
Collection Section
Assessment section
Revenue Officer of the Day
TSS Received Stamp

After the form has been completed they told us that they were going to call us but they never called.

Now I'm checking the closure steps in the Internet and it indicated that we should receive a "Certificate of No Outstanding Liabilities" at the last step which we didn't receive.

I'm concerned that we are still incurring penalties for unfiled forms (e.g. income tax, percentage tax) since I filed for closure.

Is the BIR system still generating open cases for those forms for all those years since I formally filed for closure? Will the BIR stop generating open cases only if I have received the "Certificate of No Tax Liabilities"?

Hello! I would like to know what are the consequences for not closing formally my business? It was in 2014 and it lasted only for almost six months as it was not successful. I didn't register it to BIR. Only DTI, Mayor's Permit/Business Permit. I didn't have an idea that time that it needs to be closed formally. Now I am planning to put up another business. During one of my internet research few days ago, I chanced upon a topic on a website about closing a business. So I got alarmed. Now, I want to know if it will affect my new application? Will I be penalized for not closing my previous business formally? Hope you can give me an advice. Thank you in advance.

florbv wrote:Hello! I would like to know what are the consequences for not closing formally my business? It was in 2014 and it lasted only for almost six months as it was not successful. I didn't register it to BIR. Only DTI, Mayor's Permit/Business Permit. I didn't have an idea that time that it needs to be closed formally. Now I am planning to put up another business. During one of my internet research few days ago, I chanced upon a topic on a website about closing a business. So I got alarmed. Now, I want to know if it will affect my new application? Will I be penalized for not closing my previous business formally? Hope you can give me an advice. Thank you in advance.

For EACH tax form you don't leave in time to BIR you risk penalty.

I don't know if any other officials bother or even check.

If you get your business approved as BMBE (=Barangay Micro Business Enterprice) then you get interesting benefits as for instance no income tax for the owner. But I believe you have to send the tax forms anyway. (Some demands are needed to be fullfiled to be BMBE apprived. For instance NOT being Franchise.)

I am not familiar with the process of closing out a business.

But from what I gather from the feedback here in your thread, you need to formally close your business - otherwise you will be subject to penalties.

Penalties, this I am familiar with. BIR is very good at collecting penalties. Sooner or later, you may have to get tax clearance or certificates, and you will find the penalties will have compounded interest.