What steps are required to close or dissolve a business?

What steps are required to close or dissolve a business?

| Mar 14, 2018 | Uncategorized |

Whatever the reason behind the closing of your business doors, it requires more than simply ‘closing up shop.’ Much in the way that one must organize financial, legal and other aspects of a business when starting out, one must come full circle on these aspects when closing or dissolving a business. The closing of a business could be a happy time, or it could be a more tumultuous time related to a business’ inability to make a profit over a prolonged period of time. Either way, there are requirements for any business closing its doors.

There may be different parties to consult when closing a business. This could include business partners, customers, vendors or employees. Some of these consultations are as straightforward as letting them know that the business will be closing, and, ideally, giving a reasonable time frame to the party who is being brought the news. However, some of these conversations can be more complicated, for instance, if one is engaged in a partnership. In a partnership, both partners must agree to the sale of a business or the closing before it can actually happen.

Beyond these conversations, a bit of paperwork should be filed in accordance with state, local and federal law. This includes notifying tax entities. Any business licenses should be canceled to prevent any false claims against the business. It’s possible a business can have outstanding bills to vendors or creditors. Notifying them of business closing will not remove a person from these financial obligations. Any remaining assets may be sold to help cover these debts or to leave the business owner with more profits.

In short, closing a business today looks like nearly as much work as starting a business. Do not overlook these steps in your haste to close your business. Failing to file the necessary paperwork and notify the appropriate parties can result in unwanted repercussions. Doing this work the first time may be the shortest and easiest way to dissolve a business.

Source: FindLaw, “Necessary Steps to Dissolve Your Company,” Accessed March 12, 2018