When it’s Time to Close Your Business
Many business owners decide to shut their doors for many reasons. Sometimes, the decision is made at the end of a lengthy run or after a significant loss in revenue. It could also be because the business no longer has viable financial prospects the contracts have ended or the market is changing too rapidly to be able to compete.
It’s important that you make a plan, and then adhere to it. A lawyer or accountant will assist you in determining the best method to end the process and eliminate assets and ensure that all legal obligations are fulfilled. This involves filing dissolution documents and rescinding all permits and registrations, paying outstanding taxes, and closing business accounts. Notifying creditors, paying off debts, and settlement of financial obligations are included.
Notifying customers and refunded deposits for an unfulfilled order are also important considerations. Likewise, it’s important to notify employees and provide them with the most notice possible so that they can come up with their exit plans. This will help maintain your relationships and prevent unnecessary frustration. It’s a good idea also to collect and analyze business records in order to effectively close your company’s finances. This includes settling any financial obligations, issuing the final payroll and closing credit card accounts at the company (which can affect personal credit ratings).
After everything is settled, it’s now time to close the company. This involves a range of tasks, and ignoring even one could result in penalties and additional fees. The IRS has a checklist of the things you have to do, and we recommend that you contact any other government agencies, such as professional licensing boards as well as local, state or federal tax agencies.