Give it to business corporations or organizations that may fall into the state of being a bankrupt entity. But what is bankruptcy? Bankruptcy is the insolvency of an individual or an organization. Bankruptcy offers an individual or an organization the chance to start anew by forgiving debts that can’t be paid anymore, hence insolvency. This provides the creditors to gather some means of repayment based on their assets. But the real question is: what are the processes taken for a creditor to file for bankruptcy? Here’s how to have a smooth transition of operations in filing for bankruptcy in the Philippines:
1. Employee Termination
Being an employer and a creditor at the same time, the first thing you have to do is send a 30-day notice of termination and closure to the employees of your organization and a copy to the Department of Labor and Employment 30 days before the appointed date of the said termination
. In the termination of employees, you have to pay a termination fee based on the monthly payment for every year of service at least a half or the full one month pay and give it to all terminated employees. It’s to steer you clear of the labor obligations of each organization.
2. Filing Notice of Closure to the Different Agencies
Bureau of Internal Revenue, Philippine Health Insurance Corporation, Social Security System, and Home Development Mutual Fund– these are the agencies you need to file a notice of closure too. BIR’s work is to assess and do the auditing to clear the organization of the taxes that it should pay, so BIR has to be complied first out of the four agencies.
3. Filling Up Forms and Submitting Requirements
After filing the notices of closure to the agencies, they will give clearances, and some of the organizations offer you forms to apply for Registration Information and Update, letter requirements for requests and reason of filing for bankruptcy, and others.
4. Filing Notice of Closure to Government
The city that your organization is in or the government officials in your area should also be informed about the termination of the business. Processes for filing a notice of closure in Local Government Units differ from one another; It is recommended for the creditor to visit the city and municipality his/her business is situated and inquire about the necessary documents and requirements
for the completion of the notice.
5. BN Cancellation
- (1) the letter of explanation for the closure.
- (2) an affidavit of cancellation of one’s registered organization.
- (3) the original copy of the Business Name certificate as well as the application form.
Struggling amidst debts, closures, and the bankruptcy filing is a load of work and a very long, tiring process. A creditor needs a bankruptcy lawyer to gain advice and more knowledge during the crisis the business is facing. It is essential to follow these processes to save the business from getting into deeper trouble in the bureaucracy.
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