Many business owners decide that it’s time to close up shop due to a variety of reasons. Sometimes the decision is made at the end of a lengthy period of business, or after the company has suffered a substantial loss in revenue. Sometimes it’s because the business has no viable financial prospects. Contracts have expired or the market has changed too quickly to allow the business to compete.

Whatever the reason, it’s important to come up with a plan and follow it through. A lawyer or accountant will help you decide on the best way to end the process and eliminate assets and assure that all legal obligations are met. This includes filing dissolution documents and rescinding all registrations, permits, and licenses, paying taxes due and closing business bank accounts. Notifying creditors, paying debts and the settlement of financial obligations is also included.

Other important considerations include the need to notify customers to return deposits for unfulfilled orders. It’s also important to notify employees and give them as much notice as you can so that they can plan their departure. This will ensure that your relationships are maintained and prevent unnecessary frustration. It’s also a good idea to gather and analyze the business records so you can effectively close out the company’s finances, including resolving financial obligations, issuing a final payroll, and closing the company’s credit cards (which may impact personal credit ratings).

It’s now time to close your company. This requires a variety of tasks, and missing even one can lead to penalties and fees. The IRS offers a checklist of what you must do, and we suggest that you contact any other government agencies, such as professional licensing boards, as well as local tax, state or federal agencies.

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