How to Close a Small Business

Step-by-Step Guide

1. 1

   Step 1: Meet with your co-owners

   Remember to document the meeting with a proper written agreement.
2. 2

   Step 2: if your business is a corporation

   There may be a timeframe in which employees need to be informed.
   
   So make sure you are within your rights when you make this announcement. , Don't let them be the last to know.
   
   Try to give them as much notice as possible so that they have time to find another job.
   
   Be honest about the reasons why, without going into personal details, if possible.
   
   They deserve the courtesy of being informed, but they don't need to know confidential information.
   
   Thank them all for their service to you and your business in a personal card.
   
   Consider offering honest letters of recommendation for each of your employees.
   
   Cut final paychecks to employees on or soon after their final day of work.
   
   Check state laws regarding unused leave and payroll tax commitments. , If you can accommodate a few last orders, then let them know.
   
   Send out a personal note to each thanking them for their loyalty. , Basically, you want to make sure that you are meeting the state and federal requirements correctly.
   
   Therefore, having someone on your side to make sure you are crossing all your Ts is always a smart approach. , In some states this is not necessary if you are a sole proprietor.
   
   File the necessary paperwork to dissolve your business so that you are no longer accountable for taxes and filings associated to the business following its closing. ,, When filing for the last income tax return for the business, indicate that it is your last filing.
   
   Check state requirements regarding filing sales taxes.
   
   Keep copies of this filing for your records.
   
   You may want to review the IRS checklist for ending a business. , Just make sure you have what you need as far as materials to complete any current jobs you are working on.
   
   You may have to pay them all out in full, but this is a necessary step in maintaining a positive business reputation, especially if you plan on starting a new business in the near future.
   
   Close all your business bank accounts, credit cards, and other outstanding business debts.
3. 3

   Step 3: partnership

4. 4

   Step 4: or limited liability company (LLC)

5. 5

   Step 5: and formally agree on the decision to dissolve.

6. 6

   Step 6: Consult your attorney regarding workers' protection rights in relation to a business closing.

7. 7

   Step 7: Reveal your intentions to your employees when closing your business.

8. 8

   Step 8: Inform your customers that you will be closing your business.

9. 9

   Step 9: Seek professional assistance and advice on dissolving a business from a lawyer

10. 10

    Step 10: tax expert

11. 11

    Step 11: or accountant.

12. 12

    Step 12: Ask your attorney if you need to file dissolution forms.

13. 13

    Step 13: Make sure to cancel any permits

14. 14

    Step 14: registrations

15. 15

    Step 15: and licenses associated to the business.

16. 16

    Step 16: Fulfill all tax requirements by contacting the IRS and closing out your Employer Identification Number (EIN) account.

17. 17

    Step 17: Resolve all outstanding debts with business associates and close out vendor and supplier accounts.

Detailed Guide

About the Author