In running a business, you would like for it to continue, especially if the market conditions have been good and
you’ve been profiting handsomely from it. So, to keep it running smoothly and legally, make sure to renew your business
permit annually. Failing to renew your permit can result in penalties or even a suspension of your business
operations.
If you’re new to the concept of business permit renewals, here’s
a step-by-step guide on how to do it:
Preparing the necessary documents and requirements
There are three government offices involved in the renewal of
your business permit: the barangay hall, the mayor’s office, and the BIR (Bureau of Internal Revenue). Shown below
is the breakdown of documents each office issues/renews, as well as the sets of papers you need to submit:
Barangay Clearance
Your
Barangay Clearance certifies that your business has followed the requirements of the barangay where your business is
located. Here’s what you need:
-
Barangay Clearance from the previous year
-
Official receipt of Barangay Clearance payment from the previous year
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Duly accomplished application form
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Comprehensive General Liability Policy Insurance (CGLP) or local insurance
-
Official receipt of CGLP Insurance
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Renewal fee of P500
Once you have all the documents, head to the permit division of
your barangay. Renewing your barangay clearance usually takes a day.
Mayor’s Permit
Once your
Barangay Clearance is renewed, next to attend to is the Mayor’s Permit. This certifies that the Mayor’s Office has
allowed your business to operate in their locale. Here’s what you need:
-
Mayor’s Permit from the previous year
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Official receipt of Mayor’s Permit from the previous year
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New Barangay Permit
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Application for new Mayor’s Permit
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Financial statements of the previous year
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Community Tax Certificate
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Contract of Lease
-
BIR Clearance
-
SSS Clearance
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Comprehensive General Liability Policy Insurance (CGLP) or local insurance
After these requirements, along with the application form
obtained from the local Business Permits and Licensing Office of the concerned city hall or municipal hall, are
submitted and approved, head to the City Treasurer’s Office for payment of the Mayor’s Permit fees.
You can
also ask your local city hall for a complete list of requirements. When it comes to paying for the Mayor’s Permit,
you can opt to pay in full or in quarterly installments. Renewing your Mayor’s Permit takes around one to three
weeks.
Certificate of Registration
This is
also known as BIR Form 2303. Whether you are a freelancer, sole proprietor, partnership, corporation, or
cooperative, this document will give you the legal authority to operate your business in the Philippines. Just like
your Barangay Clearance and Mayor’s Permit, your business’ Certificate of Registration must be renewed annually, as
well.
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Accomplished BIR Form 0605
-
Registration fee of P500
The updated application form can be downloaded here. Once the
form has been filled out, pay the renewal fee in any Authorized Agent Bank (AAB) of the BIR.
There are
two ways to renew your Certificate of Registration: By going to your designated BIR Revenue District Office (RDO) or
by paying online. If you choose to renew online, download the eBIR Forms Package and fill out Form 0605. Renewal of
BIR Registration typically takes a day.
Be aware of the deadline
In the Philippines, business permits typically expire on
December 31, at the end of each year. All Barangay Permits and Mayor’s Permits must be renewed before January 22 of
the following year. However, the local government of your business’ location has the authority to change the
deadline for renewal. Renewing of your BIR Certificate of Registration, meanwhile, is until January 30.
Since the
renewal process takes several days and you’ll be going to a number of government agencies, knowing the deadline and
how long the process takes gives you enough time to prepare.
Penalties
Operating with expired licenses and permits results in a
penalty, which can cost around thousands or tens of thousands of pesos. While the penalty is different for each
city, the consequences are the same for businesses that don’t comply. The monthly surcharge and interest fees
include a 25% surcharge on all unpaid taxes, charges, and fees and a 2% additional interest for every month of
delay.
The
fine for failing to renew your permit ranges from around P5,000 to P20,000. In extreme cases, the local government
may confiscate assets or suspend business operations.
Need help in running a business? Let FilePino help you out. We offer a wealth of experience when
it comes to registering a corporation in the Philippines. Call
us today at +63.917.892.2337 or send us a message here.