If you’re a freelancer who registered a business in the Philippines but are now working overseas, you might be wondering: Can my family close my business for me?
This question is more than a formality—it affects your taxes, records, and legal standing. Many freelancers and self-employed Filipinos face this exact scenario. Whether you’ve shifted to full-time freelance work or moved abroad for good, knowing how to close a business properly matters.
Let’s break down what to do if the business owner is abroad and a family member wants to handle the closure.
What Is a Business Closure?
A business closure is the formal process of ending all operations and informing government agencies like the BIR (Bureau of Internal Revenue), DTI, LGU, and Barangay that the business is no longer active.
It’s not just stopping operations—you need to settle taxes, cancel permits, and file the right forms. Otherwise, you may still get penalties and notices even if you’ve stopped working.
Why It’s Important for Freelancers
Many freelancers once operated as sole proprietors, often with BIR-registered receipts. If you don’t officially close your business:
- You’re still required to file tax returns—even if you earned nothing.
- Penalties pile up for late filing.
- You might get flagged in government systems.
Whether you’re now fully online or working abroad, neglecting closure could damage your clean tax record.
Can a Family Member Do the Closure?
Yes—but with proper authorization.
If the business owner is out of the country, a family member can process the closure, but only with a notarized Special Power of Attorney (SPA). This SPA must:
- Clearly state authority to close the business.
- Be notarized or consularized if signed abroad.
- Be accompanied by valid IDs of both the owner and representative.
The BIR and other agencies won’t allow someone else to process the closure unless this document is valid and clear.
Step-by-Step: How to Do It
Here’s how a family member can close the business on your behalf:
1. Prepare the Special Power of Attorney (SPA)
- Include business name, TIN, and authority to file and sign forms.
- Notarize locally or consularize abroad.
2. Settle Outstanding Obligations
- File pending tax returns (monthly, quarterly, annual).
- Pay any open balances or penalties.
3. Visit the Barangay and Municipal Hall
- Cancel your Barangay Clearance.
- Cancel your Mayor’s Permit.
4. File for Closure at the BIR
- Submit Form 1905 for cancellation of registration.
- Include SPA, ID copies, and old receipts/books of accounts.
- Request a Tax Clearance.
5. Cancel DTI Business Name (if applicable)
- File for voluntary cancellation through DTI online or in person.
Who Can Do It—and When?
Who:
- A legal family representative (spouse, parent, sibling, etc.) with SPA.
When:
- Ideally within 30 days after stopping operations.
- Sooner is better to avoid tax penalties and late filings.
Tips for a Smooth Closure Abroad
Get SPA done early before you leave the country.
Send digital scans of important papers so your family can print locally.
Keep communication open with your family and a trusted tax professional.
Track closure progress using BIR and LGU reference numbers.
Business closure may sound like paperwork—but it protects your freelancing journey. If you’re now working remotely abroad, make sure your old business doesn’t become a legal headache. With a valid SPA and proper guidance, your family can help you close it cleanly, legally, and on time.
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