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Closing a sole proprietor business

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1 Closing a sole proprietor business on Thu Mar 10, 2011 9:07 pm

netzon23


Arresto Menor
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.

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2 Re: Closing a sole proprietor business on Wed Mar 16, 2011 1:55 pm

attyLLL


moderator
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


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3 Re: Closing a sole proprietor business on Wed Mar 16, 2011 11:15 pm

netzon23


Arresto Menor
thanks for the reply,,

dont have current busines debts

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4 Re: Closing a sole proprietor business on Fri Apr 15, 2011 2:43 pm

plshelpmegod


Arresto Menor
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.

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5 Re: Closing a sole proprietor business on Sat Apr 16, 2011 11:19 am

attyLLL


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


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6 Re: Closing a sole proprietor business on Sat Apr 16, 2011 1:30 pm

plshelpmegod


Arresto Menor
AttyLLL,

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

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7 Re: Closing a sole proprietor business on Wed Apr 20, 2011 9:39 am

attyLLL


moderator
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.


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8 Re: Closing a sole proprietor business on Sun Jun 19, 2011 6:21 pm

kerwin king


Arresto Menor
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

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9 Re: Closing a sole proprietor business on Wed Jun 22, 2011 3:51 pm

SpiralKnights


Arresto Menor
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

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10 Re: Closing a sole proprietor business on Sat Jun 25, 2011 4:57 pm

attyLLL


moderator
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.


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11 Re: Closing a sole proprietor business on Tue Mar 22, 2016 11:23 am

unregistered00


Arresto Menor
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"?

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florbv


Arresto Menor
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.

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13 Re: Closing a sole proprietor business on Wed Apr 13, 2016 5:26 am

Lunkan


Reclusion Perpetua
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.)

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14 Re: Closing a sole proprietor business on Wed Apr 27, 2016 5:54 pm

pinktigerlily


Arresto Menor
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.

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