An Affidavit of Closure of Business is used by the owner of a business or its authorized officer (called the "affiant"), to inform third parties that a business has closed or ceased its operations. It is usually required when canceling business permits or other documents and certificates issued by various government agencies, but it may also be used as a simple but formal notification.
This document can be used to report the closure of a business such as a sole proprietorship, a partnership, a corporation, or a cooperative, and is one of the common requirements of various government agencies to report such closure.
A Partnership Dissolution Agreement is a document used by the partners of a partnership when they mutually agree to dissolve such partnership. On the other hand, an Affidavit of Closure of Business is a document wherein a sworn statement is made establishing that a certain business is closed down.
A Partnership Dissolution Agreement should be used by the partners to close down or dissolve the partnership, after which, a person authorized by the dissolved partnership should sign an Affidavit of Closure of Business to make a sworn statement that the business of the partnership has closed down and submit the same to Bureau of Internal Revenue, Social Security System, Department of Trade and Industry, Department of Labor and Employment, and other relevant government agencies if so required by said government agencies.
If the purpose is to cancel a Certificate of Registration issued by the Bureau of Internal Revenue or to cancel a Business Permit or Mayor's Permit issued by a local government unit, then an Affidavit of Closure of Business is mandatory.
Other requirements by specific government agencies are laid down on the website of the Department of Trade and Industry.
An Affidavit of Closure of Business contains the following information:
The owner of the business or an authorized officer of the business organization is the affiant and must sign an Affidavit of Closure of Business to establish the business closure.
The affiant must be equipped with a Secretary's Certificate if the business is a corporation or cooperative, or a Partners' Certificate if the business is a partnership before they sign an Affidavit of Closure of Business.
Once the affidavit has been completed, the affiant must print at least 2 copies of the document, and then proceed with its notarization.
The affiant must personally appear before a notary public and present at least one current identification document (I.D.) issued by an official agency bearing the photograph and signature of the Affiant. The affiant must swear under oath the whole truth of the contents of the affidavit and then sign all copies of the affidavit. The affiant will be asked to leave one original copy for the files of the notary public.
Once notarized, the affiant may use the document as needed, i.e. to prove the closure of the business.
The following should be attached:
Yes. Since an Affidavit of Closure of Business is a sworn statement that will establish that a business has been closed, it should be executed or signed in the presence of a notary public.
This document may be submitted to the Social Security Commission or Department of Trade and Industry if required by the said government agencies to process the business closure. An Affidavit of Closure of Business is mandatory to be submitted to the Bureau of Internal Revenue to cancel a Certificate of Registration, and the local government unit concerned to cancel a Business Permit or Mayor's Permit.
Notarization fees for an Affidavit of Closure of Business with Undertaking are typically PHP100 to PHP500.
Affidavits are governed by the 2004 Rules on Notarial Practice. For closure of Corporations and Partnerships, the SEC Memorandum Circular No. 5, Series of 2022 may apply. Further, the closure of the business must also comply with the legal processes and requirements of the BIR, SSS, DTI, DOLE, and other relevant government agencies to avoid continued assessments for taxes and prevent penalties, charges, and other financial obligations to said relevant government agencies.
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Affidavit of Closure of Business - sample template