Here are the steps and requirements for business permit renewal in the Philippines.
In the Philippines, business permit renewal is a requirement if a business owner or proprietor wants to continue to operate his or her business legally.
To facilitate a smooth process of business permit renewal, it is advisable to prepare the necessary documents in advance.
This article will provide the necessary information, documents, and other requirements you will need to prepare prior to renewing your business permit.
What is a business permit, and why do you need one?
A business permit is a legal authorization granted by the Philippine government that allows an individual or entity to operate a business within the specific jurisdiction of a local government unit.
Business registrations serve as an official acknowledgment that the registered businesses have met the necessary requirements and comply with local regulations.
The issuance of a business permit involves a thorough review of the business’s activities, location, and adherence to zoning laws, health and safety standards, and other applicable regulations, such as promptness in payment of business taxes, local business tax, etc.
Are business permits renewed annually?
This is one of the most important pieces of information that a business owner needs to know.
A business registration or a mayor’s permit needs to be renewed on a yearly or annual basis in order for you to continue to operate legally.
The mayor’s permit renewal done annually augments business legitimacy and the capacity to operate for the following year without hassle.
Business Permit Renewal Deadline
In the Philippines, you need to renew your business permits at any time between January 1 and January 20 each year.
All types of businesses within the specific jurisdiction should comply with this deadline, regardless of the actual date of the business permit application with the Department of Trade and Industry (DTI), Securities and Exchange Commission (SEC), or Cooperative Development Authority (CDA).
Requirements for the renewal of business permits
Since you need to renew your business permit on a yearly basis, the actual requirements can vary depending on your local government units.
However, these are the common requirements that you should prepare in advance:
This is the Barangay Business Permit, Barangay Clearance, or Barangay Clearance Certificate.
The barangay business permit is an authorization document from the local barangay that allows a business to operate legally within its district. This document needs renewal on or before January 20 annually.
To apply for a barangay business permit renewal from your local barangay hall, you will need to provide the following requirements:
- A copy of the previous year’s barangay business permit
- An official receipt for payment for the previous year’s barangay business permit
- Two copies of the Renewal Application Form
Other Documents and Legal Permits Needed for Business Permit Renewal:
- original copy of the business permit from the previous year
- Current Community Tax Certificate or its receipt of payment
- Copy of the Lease Contract
- CENRO (Community Environment and Natural Resources Office) Certificate
- authorized sanitary permit
- Fire safety inspection certificate
- Comprehensive general liability insurance
- Occupation and zoning clearance certificate
- An audited financial statement of your business from the previous fiscal year
You may also need to submit the following additional business registration requirements based on your local government unit. Here are the common requirements:
- Copy of a notarized lease agreement
- DTI, SEC, or CDA registration
- Quarterly reports of value-added tax (VAT) returns from the previous fiscal year
- Declaration of Gross Receipts
- The number of employees at the time the business permits are being renewed
- SSS, Pag-IBIG, and PhilHealth registrations of your employees at the time of the permit renewal
- A copy of an affidavit of no operations (if your business was unable to operate or engage in any form of financial transactions during the previous fiscal year)
Payment of Fees
In addition to the documentary requirements stated above, you will also need to pay for the following fees:
- Local business tax (LBT)
- Mayor’s permit fee
- Sanitary inspection fee
- Garbage fee
- Building inspection fee
- Zoning fees
How to Process Business Permit Renewals
Check with your LGU about the specific requirements to renew your business permit for the incoming fiscal year.
Remember that renewals should be processed at any time between January 1 and January 20.
Obtain all pre-requisite documents. You may need to visit other government offices, such as CENRO, BIR, and local health and sanitation offices, to complete the requisites.
Barangay Permit Renewal
Obtain a copy of the barangay clearance or barangay business permit renewal application form from your barangay hall.
Check with your local barangay regarding the specific requirements needed to obtain a copy for the barangay permit annual renewal.
Assessment of requirements.
Complete the requisite documents for your barangay permit renewal and submit them for assessment.
Pay the corresponding fees.
You will need to pay for any processing fee involved with your request to renew the barangay business permit. Make sure to keep your official receipts.
Claim your Barangay Permit.
Return to the barangay hall where you submitted your application on the date specified by your local government unit to claim your processed and approved business permit.
Mayor’s Permit Renewal
Go to your local city hall or municipal hall and request a mayor’s permit form for renewal.
Take note of any requisite documents that you need to complete in advance.
Submit the required documents.
Fulfill and complete all necessary documents before submitting them to your city hall or municipal hall. Documents that require notarization and authentication should be processed in advance.
Pay the necessary fees.
Pay the processing fees promptly to avoid any delays in your renewal application.
Claim your Mayor’s Permit.
Return to the city hall or municipal hall where you processed your permit renewal to claim it.
Penalties for late renewal or non-compliance
The Local Government Code of the Philippines states that a twenty-five percent (25%) surcharge will be applied to the business tax assessed. Moreover, there is an additional two percent (2%) monthly penalty for every month that the business proprietor or entity fails to renew its business permit.
Further delinquency can result in an order to cease operations as well as an order for the closure and/or seizure of all assets and properties of the involved business entity.
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