There Are Proper Procedures to Follow on How to Close Your Business
Businesses sometimes need to come to an end. Whether you are ready to retire, want to move on, or your business has failed, you need to know how to close your business with the least amount of problems possible. There are differences in the requirements necessary to close a business based on the type of entity. If the business is owned by you alone you will be able to make all the decisions whereas if the business is a partnership, limited liability company, or corporation, all owners must make decisions together.
Dissolving Your Business
One of the most important steps you must take to dissolve your business is to file the appropriate documents. If you fail to file your business may still be liable for taxes and other obligations. You must also cancel any permits, registrations, and licenses you have, such as your business name registration.
Announcing Your Business Closure
The first thing you should probably do is to notify employees of the coming end of the company. Give them enough notice so that they will have time to begin looking for new employment. Typically, companies with more than 100 employees are required to provide at least a 60 day notice. Allow employees to use or be paid for their accumulated vacation or leave time. Consult with your attorney to ensure that you comply with all state, local, and federal laws.
Dealing with Clients and Creditors
It is also necessary to announce your closure to your clients and creditors. If you owe outstanding debts, you will need to settle them. Discuss the business closure with your accountant to determine how to resolve loose ends. Some companies may need to file bankruptcy if they are insolvent. Before doing so, make certain that this is the best option for your business.
Once your business has ended, you must close your business accounts. You must also close your IRS tax identification number after paying your tax obligations. Even after you dissolve your business, you must keep records for a period of time, usually 3 to 7 years depending on the field. The process to close your business can be complex and it is necessary to follow the law. It is advisable to meet with a qualified business attorney before moving forward. If you are planning on closing your business, contact the experienced commercial attorneys at Udall Shumway PLC to discuss your situation. Experts at Xero Castle Hill bookkeeping services are constantly keeping our knowledge up to date with business closure specific by-laws.
This blog should be used for informational purposes only. It does not create an attorney-client relationship with any reader and should not be construed as legal advice. If you need legal advice regarding How to Close Your Business, or any other litigation issues, please feel free to contact us at 480.461.5300, log on to udallshumway.com, or contact an attorney in your area. Udall Shumway PLC is located in Mesa, Arizona and is a full service law firm. We assist Individuals, families, businesses, schools and municipalities in Mesa and the Phoenix/East Valley.