4 Steps To Close Up Shop When It's Time To Call It Quits
Face it... The topic of shutting down your business isn't something most entrepreneurs want to contemplate, but something most will have to deal with inevitably.
There's just no skating around the issue that for whatever reasons, sometimes companies
must close up shop. It could be a lack of funding, bad business decisions, an economic crisis, or a combination of all of the above.
Adding to financial worries, many doomed businesses fail to properly terminate their corporation or LLC, leading to a slew of unexpected charges associated with the dissolution of the company. Check out these 4 tips on how to end your business the right way:
1) File your final tax return.
When closing a business, you must file an annual tax return for the last year in business, even if you were in business for only a portion of that year. All corporation and LLC tax return documents have a denotation that this is the Final Tax Return. Check that box, and then contact the IRS to close your employer identification number (EIN) account.
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2) File your final employment tax return.
Tax related matters also include filing a final employment tax return if you have employees. And don't forget to make the final federal tax deposits for your employment tax return as well.
3) Deal with dissolution documents.
Unless you formally dissolve your business, the government will have it listed as an ongoing entity, accruing taxes and fees. Filing dissolution papers is especially important if you have partners or other owners in the business, as it prevents future confusion about ownership and liability.
4) Cancel licenses, permits and insurance policies.
If you have city, town, county, state, or federal licenses for your business, contact the issuing authorities to cancel them. Also, be sure to contact your insurance broker to cancel business liability and worker's compensation insurance, and notify your employee-based health care provider too.
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