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Business Retirement Services
Looking to close shop? Do it the right way to avoid hassle and penalty in the future. We’ll get everything signed, sealed, delivered.
We liaise with these government agencies so you don’t have to.
Service provider professional fees may not include: government filing fees, taxes, and out-of-pocket expenses. Those expenses will be paid directly to the concerned government office or organizations and will be supported by receipts.
3 Reasons to Properly Close your Business
Businesses close for any number of reasons. What probably comes to mind first is an owner is already losing too much money and thus decides to cut their losses. While this certainly is a sad reality, it is not all doom and gloom. Other times, businesses need to close to transform and expand.
Undergoing the retirement process for your business can be a tedious task compared to the business registration process. The exact process differs across different company types. For example, partnerships and corporations need to close their business with the Securities and Exchange Commission (SEC) as well as with local government offices and the Bureau of Internal Revenue (BIR). If the business is a pawnshop or any financial institution, you must coordinate with the Bangko Sentral ng Pilipinas (BSP).
How quick or long the process takes will depend on tax examiners as well as the completeness of needed documents. All told, business closure may take as little as six months but may drag on for more than a year.
All that was stated previously makes the process seem at best a chore and at worst too intimidating and you may ask if it is even worth going through. The answer is yes and here are three reasons why you must go through this tedious endeavor.
1. Compliance with the Law
Formally closing your company will legitimize the end of your business in the eyes of the local government where you are registered in as well as the national government. This ends the obligation of the owner to pay further taxes, any lingering debts, and any other commitments. Which brings us to the next reason.
2. Save Money
As long as a business is still operational under the eyes of the law, it is still obligated to pay all the necessary taxes. This means that a business could be non operational in its day to day operations but as long as it is not formally retired with the proper agencies it will still be taxed.
It is better to go through the whole process than to still be paying taxes for a business that is no longer generating any income.
3. Move Forward
If you are closing your business because of the lack of income then closing the business will free you from paying another centavo in taxes to the government letting you move forward with new ventures in life. On the other hand, if you plan on opening a new business you must still close your existing company. While not formally retiring a company will not be a setback in registering a different business, you will still be taxed for the previous business if you do not legally close it.
Regardless of the circumstances and reasoning behind closing a business, it is advisable to formally end its operations to move forward to new projects.
The reasons to close your business far outweigh the obligation of paying taxes for an existing enterprise that does not generate any income. If the process still seems daunting do not fret. You can entrust your business retirement to us here in FullSuite. Our expert team will handle the whole procedure with care and your business with respect. We pride ourselves in efficiency and we will make sure you do not spend more money than you have to.
Frequently Asked Questions
My business did not yield revenue so we stopped operations, do I still need to close it?
Official closure of the business will only be achieved through retirement. Failure to retire your business will result in taxes and penalties to continue accumulating both from the local government and the BIR.
What are the requirements for retirement?
Basic requirements are the previous year’s BIR income tax returns and/or VAT or Non-VAT filings from one to three years back. Unused O.R and invoices plus the books of the business are also required to be shown. Apart from these, additional requirements may also be necessary depending on the city.
How much do I need to pay?
Depending on whether tax filing is complete at the time of retirement application and if the business permit is up to date, the fee may be as little as a few hundred pesos and be as high as hundreds of thousands of pesos.
How long does the process take?
The availability of tax examiners in your city plus completeness of the documents is crucial for the process. Depending on these factors, the whole retirement process takes between six months to over a year.
No more headaches. Let FullSuite handle the tedious stuff so you can focus on running your business.
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