By Launchpad – Business Closure Services in Metro Manila and Cebu

TL;DR (Summary Box)

Dissolving a company in the Philippines involves SEC, BIR, and LGU fees, as well as potential penalties and professional service charges. On average, costs range from ₱15,000 to ₱120,000, depending on your business type and compliance status. Launchpad helps businesses in Metro Manila and Cebu navigate every step efficiently, minimizing costs and avoiding delays.

Quick Answer

Company dissolution costs vary depending on your business structure, outstanding taxes, and professional fees. SEC filing fees are typically ₱1,000–₱4,000, BIR closure fees ₱1,000–₱3,000, and LGU business permit cancellation fees vary by locality. Penalties for unpaid taxes or late filings can increase the total cost. Launchpad provides full support for companies in Metro Manila and Cebu, ensuring a smooth and legally compliant dissolution process.

Understanding Company Dissolution in the Philippines

Company dissolution, also known as business closure, is the legal process of terminating a company’s operations and removing it from official records. It applies to corporations, partnerships, and sole proprietorships. While some business owners assume that closing a company is quick and inexpensive, the reality is that multiple government agencies are involved, and failing to comply with regulations can lead to additional fees or penalties.

Key agencies involved in company dissolution:

• Securities and Exchange Commission (SEC) – for corporations and partnerships

• Bureau of Internal Revenue (BIR) – for tax clearance and final tax filings

• Local Government Unit (LGU) – for business permits, real estate, and municipal taxes

Launchpad provides comprehensive support for Metro Manila and Cebu businesses, helping you manage each agency efficiently and reduce unnecessary expenses.

Breakdown of Company Dissolution Costs

Understanding the cost components is crucial for proper financial planning. Here’s a detailed breakdown:

1. SEC Filing Fees

For corporations and partnerships, the SEC handles the official dissolution process. Typical fees include:

• Filing the petition for dissolution: ₱1,000–₱2,500

• Publication fees (if required): ₱2,000–₱4,000

• Additional document processing fees, depending on the authorized capital

Note: Fees may vary depending on the SEC office and the size of your business.

2. BIR Closure Fees

The BIR ensures that your company has paid all taxes and has filed all returns. Costs may include:

• Documentary stamp taxes: ₱1,000–₱3,000

• Penalties for late tax filings (if any)

• Professional fees for preparing the required BIR forms (1601C, 1701/1702, etc.)

Companies must obtain a Certificate of Tax Clearance from the BIR before completing the dissolution process. Any unpaid taxes or discrepancies can significantly increase costs.

3. LGU Fees

Your local government unit requires clearance that all local business permits, real estate taxes, and other municipal fees are settled. Costs can include:

• Business permit cancellation fees

• Outstanding real property or business taxes

• Surcharges for late payments

Example: An SME in Metro Manila may pay a few thousand pesos in LGU fees, while larger businesses with multiple permits may incur higher costs.

4. Professional Service Fees

Many business owners hire professionals to manage company dissolution. Services include:

• Preparing SEC and BIR forms

• Coordinating with government agencies

• Tax and audit compliance

• Ensuring proper document filings

Professional fees can range from ₱10,000 to ₱50,000, depending on the complexity and size of your business.

5. Hidden or Additional Costs

Some unexpected costs may arise during dissolution:

• Penalties for delayed or incorrect filings

• Legal fees for resolving disputes or claims

• Accounting fees for audited financial statements

• Document publication costs (in newspapers or official gazettes)

By working with Launchpad, businesses in Metro Manila and Cebu can minimize these hidden costs and avoid delays that inflate expenses.

Factors That Affect Company Dissolution Costs

Several factors influence the total cost:

1. Business Structure: Corporations generally have higher costs than sole proprietorships due to SEC filings.

2. Outstanding Taxes: Unpaid or late taxes increase the total fees.

3. Pending Obligations: Loans, debts, or unsettled contracts can complicate dissolution.

4. Professional Help: Hiring lawyers, accountants, or business closure specialists adds upfront costs but can save money in the long run.

5. Complexity of Operations: Multiple branches, foreign ownership, or partnerships require more paperwork.

Step-by-Step Guide to Minimize Costs

Step 1: Prepare Your Financial Records

• Ensure all books, tax returns, and financial statements are updated.

• Identify any outstanding obligations to BIR, creditors, or partners.

Step 2: SEC Dissolution Filing

• Submit the dissolution petition, board resolutions, and supporting documents.

• Publish the notice if required to announce the closure.

Step 3: BIR Clearance

• Settle all taxes and penalties.

• Obtain a Certificate of Tax Clearance before moving forward.

Step 4: LGU Clearance

• Cancel your business permit and settle all local taxes.

• Ensure real estate or municipal obligations are cleared.

Step 5: Hire Professional Support (Optional but Recommended)

• Launchpad offers full-service dissolution in Metro Manila and Cebu, handling SEC, BIR, and LGU coordination to ensure accuracy and minimize fees.

Why Hire Launchpad for Company Dissolution

1. Save Time

We coordinate with all government agencies on your behalf, reducing the typical 3–12 month closure process.

2. Minimize Costs

Avoid penalties and hidden fees through proper planning, document preparation, and expert guidance.

3. Ensure Legal Compliance

All filings are completed accurately and comply with Philippine laws, including SEC regulations, BIR codes, and LGU requirements.

4. Full-Service Support

Launchpad handles:

• SEC petition filings

• BIR tax clearance and documentation

• LGU business permit cancellation

• Professional and legal advisory

Whether your company is a corporation, partnership, or sole proprietorship, our team ensures a smooth, compliant, and cost-efficient closure process.

FAQs

1. How much does company dissolution cost in the Philippines?
   Average costs range from ₱15,000 to ₱120,000, depending on your business type, outstanding taxes, and professional fees.
2. What fees are included in dissolving a corporation?
   SEC filing fees, BIR closure fees, LGU business permit cancellation, and professional service fees.
3. How much does SEC dissolution cost?
   Typically ₱1,000–₱4,000, depending on authorized capital and document requirements.
4. How much does BIR closure cost?
   Around ₱1,000–₱3,000 for documentary stamps, plus potential penalties for unpaid taxes.
5. Are there penalties for late dissolution?
   Yes. Late filings or unpaid taxes can increase costs significantly.
6. Can I dissolve a company without a service provider?
   Yes, but working with experts like Launchpad saves time, prevents mistakes, and reduces hidden fees.
7. How long does a company dissolution take?
   The process may take 3–12 months, depending on tax clearance, audits, and agency processing times.
8. Does dissolution clear unpaid taxes?
   No. Taxes must be fully settled with the BIR and LGU before closure.
9. What is the cheapest way to dissolve a company?
   Ensure all records are updated, taxes paid, and documents complete to avoid penalties.
10. Can Launchpad handle business dissolution in Cebu?
    Yes, we provide full-service company dissolution for Metro Manila and Cebu clients.

Final Thoughts

Company dissolution in the Philippines is more than just a formality—it involves multiple government agencies, fees, and potential penalties. Proper planning, accurate filings, and expert guidance can significantly reduce costs and avoid delays.

Launchpad offers comprehensive company dissolution services in Metro Manila and Cebu, guiding businesses through SEC, BIR, and LGU requirements. By relying on our expertise, business owners can close their companies efficiently, legally, and cost-effectively.

Secure a smooth and compliant company closure today. Contact Launchpad for professional assistance in Metro Manila and Cebu.

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