Many business owners decide that it’s the right time close up shop for a variety reasons. Sometimes, it’s at the end of a long period or after a substantial loss in revenue. Sometimes it’s because the business isn’t financially viable. Contracts have been terminated or the market has shifted too quickly to be able to compete.
Whatever the reason, it’s important to create a plan and follow it through. A qualified accountant or lawyer can help you figure out the best method to end the process and get rid of assets and make sure that all legal obligations are fulfilled. This involves filing dissolution documents, canceling all registrations and permits as well as paying taxes due, and closing business accounts. It also includes notifying creditors about financial obligations, settling debts obligations and liquidating inventory. It also includes organizing an auction.
Other important considerations include the need to inform customers to return deposits for unfulfilled orders. It is also important to notify employees and provide them with as much notice as possible so they can develop their exit strategies. This will keep relationships intact and prevent unnecessary stress. It’s important to review and study the business records so that you can efficiently close out the company’s finances, including resolving financial obligations, issuing the final payroll, and closing company credit cards (which may impact personal credit ratings).
It’s time to end your company. This involves a number of tasks, and missing even one can lead to penalties and fees. The IRS offers a checklist of the things you must do, and we suggest that you consult any other government agencies such as professional licensing boards as well as local and federal tax agencies.