I have a wb application containing HTML/Javascript/PHP. I, unfortunately do not trust my client from redistributing and reselling it to other companies so i need to somehow encode my code and then give them to him. I know there are many softwares out there that does the job for PHP. Any recommendation which one to be used for better security?
The only way to protect against this is to not give the client the code except for the html and javascript and only those two things interact with a api on your site. No amount of obfuscation will be enough to prevent them from getting the original code especially dynamic languages that you describe. There are a few for PHP yes, but they only protect for a short period of time. Your best bet is to just expose an API to your client and secure the API.
So far I used ioncube and ZendGuard. Both are good! Its a question of choice.
If you're handing him a complete package which he can just post on a server and run, then you've handed him the complete package. No amount of encoding will prevent this client from simply making a complete copy of what you've given him and redistributing it as he sees fit. Preventing your client from doing so is the job of copyright laws - you're better off talking to a lawyer about this.