How To Close A Business Without Leaving Loose Ends

Paperwork is Necessary To Close A Business

If you, or the business you work, for find(s) itself in economic peril, closing the business doors is often on the agenda of considerations to remedy the problem.

Closing a business requires the filing of various documents; however, there are numerous other tasks that need to take place as well. Additionally worth noting is that small businesses normally do not have the amount of paperwork to file as their large counterparts.

Be respectful of others when closing your business. Don't allow your suppliers and employees to be the last to know that the business is closing. In today's economic times, vendors and employees should be allowed to have sufficient time to find other companies to do business with and work for.

Additionally, if you decide to go into business in the future, you must avoid burning bridges with the people who have provided you with great products and given you quality service.

In the initial stages of closing the business, it is wise to consult an attorney or consultant. To help you close your business without making mistakes that can haunt you in the future.

At this juncture, if the business is a partnership or corporation, all company member votes to close the business, would have been tallied and recorded, and the dissolution papers by the heads of the company or an appointed team written.

Any warranties offered by the business are usually handled by a third-party. Arrangements should be made with that entity to allow the continued honoring of warranties through another company or organization.

Gift cards are normally backed by a financial institution, such as a bank. Arrangements should be made to honor the gift cards either as cash back through the bank or honored at another business.             

In the case of debit credit cards issued by such companies as VISA, American Express, MasterCard, and Discover, the cards can be handled by their internal credit departments as cash-back to the consumer or issuance of another card applicable to a retailer of choice.

How to Close Business Guidelines Checklist

1. Business members must cast their votes to close the business.
2. Inform vendors and employees that the business is closing.
3. Notify the landlord of the property you rent (if any) that the business is closing. This must be done usually within 30 days.
4. Fulfill all obligations to business' customers before you close the business.
5. List any assets for the business valuation should be business be sold or its inventory used to fulfill any debts. This information is required to fulfill the obligations of the state of operation and/or a buyer of the business.
6. Compile all tax and financial records for the state of operation and/or a new buyer. Be sure to pay all state and government taxes before you close the business.
7. Compile all debts and make payment arrangements with creditors to pay them off. The payoff of all loans and commodities must be cleared before signing termination papers.
8. Refer to the business operating agreement and license from your state and government for compliance information regarding the closure of the business.
9. Contact your state's Secretary of State's office by phone or use their website and obtain necessary termination and dissolution forms, fill them out, sign and submit them. Processing normally takes 1-3 days.
10. Close the business insurance coverage.
11. Close the business commercial bank account.
12. Prepare and file final tax returns, quarterly or annual employment tax forms, and all employee income to report W-2's.
13. Cancel or transfer business names (if applicable), trademarks, and any other permits.

While the closing of any business is not a pleasant task, it can be an easier road to travel if you know ahead of time what the procedures are and how to execute them.

Resources For Closing A Business:

SBA - Closing A Business

Secretary of State Contact Info - You may have to scroll down the page to find your state

Small business Law

Closing A Business Check List

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