Starting a business is one thing, closing it up is another one. There are several legal and financial issues that should be resolved when closing down your business. Below are the steps of closing down a business in the right chronological order.
- Setting deadlines
Be punctual enough to set deadlines for each act you are going to perform. Calculate the steps you are going to take towards dissolving your business and the timeframe that will be needed to realize those steps.
- Voting to dissolve the company
Depending on the type of business entity that you have, you will have to vote to dissolve your company in a certain way. If the partnership agreement that you have signed when starting the business does not specify how the business should be dissolved, then some state statutes governing your form of business will act so that you can dissolve.
In certain cases, when people cannot manage the process of dissolution, an attorney should be hired to manage the process.
- Listing the assets
Listing the assets of your business is the next step in closing down your business. This step is necessary for filing the final tax returns of your business. Another step very closely connected with this one is getting a business valuation to avoid future problems that may arise between the owners of the business.
- Announce about the dissolution
Your creditors, employees and your customers have got the right to know about the dissolution of your business. Besides, making an early announcement about the dissolution will give your employees the chance to start finding another job, instead of hindering the dissolution process.
- Pay off the debts
Another crucial step towards closing down your business is paying off your business debts, if there are any. Besides, terminate the production of goods or the services that you offer.
- Arrange the dissolution paperwork
Prepare both state and federal tax forms. If you are a corporation, a limited liability company, a limited partnership or a limited liability partnership, you are required to notify the state about the dissolution of your business. Besides, manage the closing of your business’s bank account. After you arrange all the paperwork for closing down your business, make sure you save that paperwork for 7 years.
This is the chronological order of the steps to be taken when closing down a business. If you feel the need of an experienced business law attorney, then you should contact the Margarian Law Firm for legal help. The Margarian Law Firm is a California based full service law firm with experienced lawyers and aggressive customer protection methods. Call us today at (818)-553-1000.