Here’s a practitioner-oriented explainer on Business Closure: Legal Requirements in the Philippines—what to do, in what order, and what to watch out for. This is an educational overview, not legal advice.

1) Map your entity and scope of closure

Entity type

Sole proprietorship → DTI (business name), BIR, LGUs, and relevant agencies.
Partnership/Corporation/One Person Corporation (OPC) → SEC dissolution + liquidation, then BIR, LGUs, and relevant agencies.
Cooperative → CDA dissolution rules (similar liquidation logic), then BIR/LGUs.
Branch/Facility closure (not the whole company) → de-register the branch with BIR/LGU; no SEC dissolution if head office continues.

Scope

Full cessation (entire business) vs. partial (branch, line of business).
With employees vs. no employees (changes DOLE obligations).
Regulated industries (PEZA/BOI, FDA, BSP/MSB, Insurance Commission, BOC, DOE, NTC, NPC, etc.)—close permits with those regulators too.

2) The master sequence (high-level)

Internal decision & plan Board/Owner resolution; proposed closure date; liquidation plan (who winds up, where records stored, who signs).
Employees & labor (DOLE + workforce) 30-day notices, separation pay (if applicable), final pay, statutory reports.
Creditors, contracts, landlords, utilities Give notices, settle balances, negotiate exits.
SEC or DTI action
- SEC: dissolution & liquidation (corps/partnerships).
- DTI: cancel business name (sole prop).
BIR de-registration (and final/short-period returns) Surrender COR, books, unused ORs; secure tax clearance.
LGU retirement Barangay clearance → Mayor’s Office business “retirement” and closure of local permits.
SSS/PhilHealth/Pag-IBIG employer account closure and last remittances.
Other regulators (if any) and data/privacy wrap-up.
Post-closure archiving (books & e-records retention).

3) Employees and DOLE: authorized closure/cessation

When shutting down all or part of a business (or undertaking retrenchment):

Notices: Serve written notice to (a) DOLE Regional Office and (b) affected employees at least 30 days before effectivity.
Separation pay:
- Closure not due to serious losses → at least ½ month pay per year of service (or 1 month, if that’s higher under some grounds); fraction ≥ 6 months counts as one year.
- Closure due to serious business losses → no separation pay, but you must prove losses (audited FS, bank records, etc.).
Final pay & documents: Release final wages, 13th month, encashed leaves (if policy/CBA), and issue Certificate of Employment.
Government contributions: remit last SSS/PhilHealth/Pag-IBIG premiums and submit termination reports.

Tip: Even if there are zero employees, file a nil report with DOLE if the establishment previously had an employer account, to avoid future compliance flags.

4) SEC dissolution & liquidation (corporations/partnerships)

Paths to dissolution (Revised Corporation Code concepts):

Voluntary dissolution where no creditors are affected → board approval + ⅔ stockholders/partners vote; file Articles of Dissolution with SEC.
Voluntary dissolution with creditors → petition; notice/publication; SEC may require a hearing to protect creditors.
Shortening corporate term → amend Articles to end the term on a specific date (dissolves by expiry).
Non-use/inoperation → SEC may initiate or you may voluntarily petition.

Liquidation essentials

Appoint a liquidator (board or court/SEC supervised if needed).
Collect receivables; dispose assets; settle liabilities in order of priority (secured, taxes, employees, other creditors).
Distribute residue to shareholders (as liquidating dividends).
Prepare liquidation FS and a schedule of distributions; keep proof of creditor notices and settlements.

Deliverables to SEC (typical)

Board/stockholders’ resolutions; verified Articles of Dissolution; list of creditors; published notice proofs; affidavit of non-operation (if applicable) or liquidation report; latest audited FS.
Once approved, SEC issues an order/certificate of dissolution (keep it—it’s needed by BIR/LGUs/banks).

Note: Partnerships file comparable dissolution papers with SEC; OPCs follow corporate steps (single stockholder acts as both board and stockholder).

5) DTI (sole proprietorship)

File for cancellation of business name registration (DTI BN).
This does not cancel the owner’s TIN; it only ends the use of the business name.
Do this in parallel with BIR and LGU retirement to stop annual fees and penalties.

6) BIR de-registration (all entities)

Your tax exit is what stops penalties. Do not skip this.

Key actions

File short-period/final tax returns up to the effectivity date (e.g., Income Tax, VAT/PT, Percentage Tax, Withholding).
Apply for cancellation of business registration (update registration details) and surrender:
- BIR Certificate of Registration (2303),
- Books of accounts (manual/loose-leaf/electronic),
- Unused invoices/official receipts (for inventory and destruction/cancellation).
Tax clearance & audit: Expect a closure audit; keep reconciliations ready (trial balance, inventory count, asset disposal schedules, OR/SI inventory, reconciled tax ledgers).
Cancel e-channels (eFPS/eBIR/eInvoice) after clearance.

Tax on liquidation / deemed sales (watch-outs)

VAT/Percentage tax on deemed sale of remaining inventories/assets transferred to owners.
Income tax on gains from asset disposals.
Withholding on final wages and on certain payouts.
DST/CGT where applicable on property transfers.
Sole prop: the TIN remains (for life). You’re cancelling the business registration, not your TIN.

7) LGU retirement (Barangay → City/Municipality)

Barangay

Apply for cancellation of Barangay Business Clearance.

Mayor’s/City Hall

File for business retirement/closure; attach: barangay clearance, latest Mayor’s permit, BIR tax clearance (or proof of filing), settled local taxes/fees, inventory of assets within the locality (some LGUs check for business tax on last gross up to closure date).
Settle delinquent real property taxes if the LGU ties them to your business occupancy.
Obtain Certificate of Business Retirement/Closure.

Tip: Many LGUs compute pro-rated local business taxes through the closure month; penalties run until you’re officially retired in their system.

8) Statutory bodies & payroll wrap-up

SSS: submit R-1A updates, employment termination reports, settle any ER-EE contribution arrears, and request employer account closure.
PhilHealth: file updated ER2/reporting; clear arrears; close employer account.
Pag-IBIG (HDMF): file employer change/closure, submit MCRF final remittances.
BIR withholding: file final 1601/0619 series and Alphalists; issue BIR 2316 to employees.
Issue COEs and release final pay within reasonable time; document receipts.

9) Contracts, creditors, and assets

Lease: follow notice periods; restore premises; settle fit-out removal or forfeiture of deposit clauses.
Vendors: send formal termination letters; request final SOAs; secure quitclaims/releases where appropriate.
Bank accounts: after last checks clear and tax clearance is in hand, close bank accounts and revoke AOs/signatory powers; keep bank closure certificates.
Insurance: cancel policies (observe minimum earning premium rules) and request refunds if any.
IT & subscriptions: terminate SaaS, domains, phone lines; back up records before shutoff.
Title/asset transfers: if distributing to owners, account for taxes (VAT/deemed sale/DST/CGT) and update registries (LTO, LRA, IPOPHL for IP assignments).

10) Sectoral/Regulatory permits (as applicable)

PEZA/BOI: file exit/cessation and settle incentive reporting; reconcile importations and equipment.
FDA (manufacture/distribution/food/cosmetics/medical devices): surrender/cancel LTO/CPRs; manage product recalls if needed.
BSP/MSB/EMI, Insurance Commission, SEC Market Intermediary, NTC, DOE, DENR, DOTR/LTO (fleets), DA/BFAR, DTI PS/ICC: each has closure/cancellation protocols—file to avoid future penalties.
Customs (BOC): close accreditation, clear warehouses/bonded facilities.
NPC (Data Privacy): if registered, update/cancel DPO registration/notification; ensure lawful data disposal.

11) Data, records & privacy

Tax & accounting records: keep books and source documents for at least 10 years (longer if there are open audits or assessments). Ensure secure storage and access by the designated custodian named in resolutions.
HR files: retain per statutory minimums; issue final certificates; secure 201 files.
Personal data: implement a data retention and disposal plan; redact/secure data you must keep (payroll, health, IDs).
Electronic records: preserve e-invoices, ledgers, and backups in readable form.

12) Common pitfalls (and how to avoid them)

Stopping tax filings before de-registration → penalties snowball; file zero returns until BIR cancels your registration.
Forgetting the LGU “retirement” → Mayor’s/business taxes continue to accrue.
No 30-day DOLE/employee notice → exposure to claims even if you paid separation.
Unreturned/unused BIR OR/SI → penalties and audit flags.
Liquidation distributions without tax analysis → unexpected VAT/deemed sale, income, DST/CGT.
Not closing SSS/PhilHealth/Pag-IBIG employer accounts** → letters/penalties years later.
Skipping sectoral permits → blacklisting on future applications.

13) Timelines & sequencing tips

T-60 to T-30 (target closure date): internal approvals; notify employees & DOLE; start SEC/DTI draft papers; begin creditor/landlord talks.
T-30: file DTI cancellation (sole prop) or SEC dissolution (if corp/partnership); finalize payroll cutoffs and separation pay funding; prepare BIR inventory lists.
T-0: last day of operations; physical inventory; meter readings; disconnect requests.
T+1 to T+60: file short-period/final returns; BIR de-registration; LGU retirement; close SSS/PhilHealth/Pag-IBIG; terminate utilities/SaaS; bank account closures after clearances.
T+60 onward: respond to BIR closure audit; SEC issues dissolution order (corps); archive records; store compliance proofs.

14) Practical closure checklists

Corporate/Partnership

Board & stockholder/partner resolutions
SEC dissolution package filed; liquidation plan and notices
Employee & DOLE 30-day notices; separation pay computation; final pay/COEs
Creditor and landlord notices; settlement agreements/quitclaims
BIR: final/short-period returns; surrender COR/books/unused OR/SI; tax clearance
LGU: barangay cancellation; Mayor’s business retirement certificate
SSS/PhilHealth/Pag-IBIG employer account closure
Sectoral permits cancelled (PEZA/BOI/FDA/etc.)
Bank account closures; signatory revocations
Data/privacy wrap-up; archive plan (10-year retention)

Sole proprietorship

DTI BN cancellation
DOLE (if employees) notices & separation pay
BIR de-registration; final/short-period returns; surrender OR/SI & books
LGU retirement (barangay → city/municipality)
SSS/PhilHealth/Pag-IBIG employer closure (if any)
Contract and utility terminations; bank closures
Records retention (10 years)

15) FAQs

Q: Can I dissolve with unpaid creditors? A: Yes, but follow the creditor-protection route (notice/publication/hearing) and settle in liquidation; distributions to owners come after liabilities.

Q: Do I need to finish SEC dissolution before BIR/LGU? A: You can run them in parallel, but LGUs and banks often ask for BIR clearance, and BIR sometimes asks for SEC action (or at least board/stockholder approvals). Sequence documents to satisfy each office’s checklist.

Q: What if we only close a branch? A: File BIR de-registration for that branch code, retire the LGU branch permit, and update SEC GIS/primary license if address/secondary offices change.

Q: How long do penalties run if I stopped operating years ago but never retired the business? A: Until you officially de-register/retire. File late returns and process closure to stop the clock; expect surcharges, interest, and LGU penalties.

Q: Are owners taxed on liquidating distributions? A: Potentially—depends on asset type and gains. Analyze VAT deemed sales, income tax on gains, DST/CGT for property/shares, and withholding where applicable.

Key takeaways

Treat closure as a project with labor, tax, SEC/DTI, LGU, and regulator workstreams in parallel.
DOLE 30-day notices and BIR de-registration are the two most time-sensitive moves that stop later liabilities.
Corporations/partnerships must dissolve and liquidate properly with SEC before final distributions.
Keep proofs: clearances, receipts, and certificates—then archive books for 10 years.

If you want, tell me your entity type, headcount, location(s), and target closure date and I’ll draft a tailored step-by-step timeline and document checklist you can use immediately.