You may decide to shut down your company in order to retire, in response to financial hardship, or for other reasons. Regardless, closing a business is not as simple as just emptying the office and turning off the lights. In addition to certain state regulatory and taxation procedures, you may also have to meet the requirements of your business articles, notify creditors, collect money owed to the business, and take other important steps. This section includes information about succession planning, a chronology of shutting down, what to do if you're sued after your business closes, and other resources related to closing a business.
Dissolving a Business: Main Steps
Unless you are a sole proprietor, you will need to follow certain procedures when you dissolve your business. If it's a partnership and you don't have a written partnership agreement in place, you will need to notify the other partners (in writing, preferably) of your desire to leave the partnership. But if you have a partnership with a written partnership agreement, a limited liability company (LLC), or corporation, the process can be a little more complicated.
These are the main steps involved in closing down a small business:
Managing a Struggling Business Prior to Closing
When a business is struggling and nearing its end, managers should take extra care to avoid personal liability. Even officers in LLCs, LLPs, and corporations may face personal liability if they are careless. As with most things related to debts and financial obligations, it's important that you pay your taxes first. And before winding down the company, make sure you have a clear picture of your company's financial standing. Other tips for managing a business soon before closing it include the following:
Closing a business is usually not the ideal outcome, but it happens quite often. Click on a link below to learn more.