The difficult decision to close down your business is not one that is come to quickly. If you’ve done all you can, and things are still not proceeding the way they should be, it may be better to throw in the towel and move on to different opportunities. Before moving on, however, it’s important to make sure everything is properly concluded so that employees, customers and business owners are left with a positive outlook.
1. Make the Decision to Shut Down: Depending on the type of business and its corporate structure, there may be a specific process when shutting down shop. If you are the sole proprietor, then you are the only decision-maker. With a partnership or other type of corporate structure, you may need to consult with other individuals who have a stake in the organization. Once an agreement about closing is made, it should be put into writing, and then the process of winding down should begin.
2. Consult Professionals: It is important to maintain contact with professionals in various roles when shutting down your business. Tax professionals, lawyers, IRS personnel, brokers or accountants may be able to help guide you through this challenging process. Consulting with a professional could help limit your personal liability depending on the situation.
3. Prepare Legal Filings of Dissolution: A lawyer may be able to assist you with filing the proper paperwork when it comes to dissolution. Your company’s corporate status must be considered in regards to the type of dissolution filings that are needed in order to resolve the status of your organization.
4. Settle Any Financial Responsibilities: Before walking away from your company, you need to make sure that all financial accounts owed by your business are settled and paid. It is also important to check that any tax obligations are settled as well to avoid fines or interest penalties down the road.
5. Close Out All Regulatory Documents: Closing down means that your organization doesn’t need any licenses, registrations or permits anymore. Take the necessary steps to eliminate these documents during your course of shutting down.
6. Track Down All Money Due: As you close down your firm, you want to make sure that you can walk away without owing money. One thing that may help is tracking down any accounts receivable and working to get all payments submitted as soon as possible.
7. Fulfill All Outstanding Orders: Additionally, as you shut down, you want to make sure that your customers are taken care of and not left standing with empty hands and pockets. Do the right thing by completing any outstanding orders, and ensure proper closing procedures this way.
8. Unload Assets: Assets that are part of your corporation should be sold or unloaded at dissolution. This can help you manage the costs of settling up and may even give you positive cash flow as things wind down. Inventory and other supplies may be sold quickly to a liquidator so that you don’t have to worry about the hassle and time needed to sell off everything.
9. Inform Employees and Settle All Wages: At the end of this journey, it’s important to tell your employees what is going on. Once you’ve explained, be sure to settle all employment and wage obligations. Honor all final paychecks.
10. Keep All Documentation: At the end of this stressful and emotional time, it’s a good idea to keep copies of all documentation that you acquired. Once your business is officially gone, any loose ends that come up can be dealt with more easily if you retain all paperwork for at least three years.
Once your company has decided to shut down, make the process less difficult for all those involved by ensuring that the right steps have been taken. You want to give your employees, customers and stakeholders the proper closure that allows everyone to move on to the next step in their professional lives.
The content on our website is only meant to provide general information and is not legal advice. We make our best efforts to make sure the information is accurate, but we cannot guarantee it. Do not rely on the content as legal advice. For assistance with legal problems or for a legal inquiry please contact you attorney.