Business Closure and Permit Retirement Guide (Philippines)
How to close your barangay clearance, Mayor's/business permit, BIR registration, and DTI or SEC registration in the Philippines, including typical fees and sequence to avoid penalties.
What you’ll learn in this business closure and permit retirement guide
This business closure guide for the Philippines explains how to properly retire your barangay clearance, Mayor's/business permit, BIR registration, and DTI or SEC registration so you stop future fees and penalties.
For more detail on specific agencies, you may also want to read our DTI Close Business Name Guide, BIR Close Business Step-by-Step Guide, and Barangay Business Permit Guide.
To prepare financially and administratively, you can use our Budget Calculator to plan the total cost of LGU, BIR, and DTI/SEC closure, and our BIR Book of Accounts Tool to organize your records before you request clearances.
To fully close a business in the Philippines, you must retire registrations with your Barangay, City/Municipality (Mayor's/business permit), BIR, and DTI or SEC. Doing this properly stops recurring fees, avoids future penalties, and clears your name from open obligations.
The sections below summarize the main steps, typical fees, and the usual sequence for closing your permits and registrations.
Barangay Clearance Closure
Where: Barangay Hall where your business is registered.
- Submit a Letter of Request for Closure to the Barangay Hall. Include business details (business name, address, owner) and your reason for closure.
- Present valid IDs and your Barangay Clearance Certificate if it is still available.
- Pay the Barangay closure fee, which usually ranges from ₱20 to ₱300 depending on the Barangay.
- Receive a Barangay Certificate of Closure as proof that your barangay registration has been retired.
Mayor’s Permit / Business Permit Cancellation
Where: Local Business Permits and Licensing Office (BPLO) at your City or Municipality.
- Notify the BPLO through a formal letter requesting cancellation or retirement of your Mayor’s/business permit.
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Prepare and submit the usual requirements:
- Original Mayor’s / Business Permit.
- Affidavit of closure explaining that the business has stopped operations.
- Barangay Certificate of Closure (if required by your LGU) and other barangay documents.
- Certificate of no tax liability or similar clearance from the City/Municipal Treasurer, if the LGU requires it.
- Settle any outstanding local business taxes, regulatory fees, surcharges, and penalties. Typical retirement processing fees are about ₱500 to ₱1,000, on top of any unpaid local taxes.
- The LGU may conduct a short on-site inspection before issuing your Certificate of Business Retirement, which formally cancels your Mayor’s/business permit.
Bureau of Internal Revenue (BIR) Closure
Where: BIR Revenue District Office (RDO) where your business is registered.
- File a Letter of Request for Closure with the RDO indicating your TIN, business name, address, and the desired effective date of closure.
- Submit the required final tax returns and other supporting documents as instructed by your RDO. This may include inventory lists, books of accounts, and copies of permits.
- Pay the ₱500 BIR annual registration fee forfeiture (if applicable) and any interest and penalties for late filing, if your account is not fully updated.
- Once all obligations are settled and reviewed, obtain a Tax Clearance Certificate or equivalent document confirming that your BIR obligations related to the closed business are fully paid.
DTI or SEC Business Registration Cancellation
DTI (Sole Proprietorship)
- File a request for cancellation of business name registration with DTI, usually at a DTI office or Negosyo Center.
- Submit an affidavit of cancellation and other supporting documents required by DTI.
- Pay the DTI cancellation fee, which is typically around ₱230.
SEC (Partnerships / Corporations)
- File a petition for dissolution or equivalent application with the SEC, following their latest guidelines.
- Comply with additional documentary requirements, which may include audited financial statements, board resolutions, and publication of the dissolution notice.
- Expect overall costs of about ₱3,000 to ₱5,000, including SEC processing fees and publication costs, depending on your case.
Suggested Sequence and Practical Reminders
Suggested closure sequence:
- Secure Barangay Certificate of Closure.
- Process Mayor’s/business permit retirement with the BPLO using the barangay and LGU requirements.
- Coordinate BIR closure (final returns, clearances, and tax clearance certificate) with your RDO.
- Finalize DTI or SEC cancellation once tax and LGU obligations are clearly addressed.
Doing these steps in order helps you avoid ongoing local taxes, penalties, and BIR issues linked to a business that is no longer operating.
💰 Typical Fees Summary (Business Closure)
| Item | Description | Typical Amount (₱) |
|---|---|---|
| Barangay clearance closure | Closure or retirement fee at the Barangay | 20–300 |
| Mayor’s permit retirement | Processing/retirement fee at the LGU (excluding unpaid business taxes and surcharges) | 500–1,000 + unpaid local taxes |
| BIR registration fee forfeiture | Forfeiture of annual registration fee plus possible penalties | 500 + penalties if late |
| DTI business name cancellation | Cancellation of business name for sole proprietorship | Around 230 |
| SEC dissolution | Dissolution and closure for partnerships/corporations including publication costs | 3,000–5,000 (approximate) |