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What should I do before closing my business?

On Behalf of | Jan 23, 2024 | Business Law

There are several reasons you may need to dissolve your business and there are steps to consider before closing your doors.

Business closing

Depending on the business type and your industry, the steps may vary slightly but it is important to first check any legal requirements, such as filing dissolution forms. If you have a board of directors and shareholders, you may also need to notify them and receive their approval before you can close.

If you owe money to any creditors or have outstanding payments, you will need to pay those. If you are low on funds, you may need to consider selling business assets. If there are any remaining assets, those will need to be distributed.

You will also need to file tax returns and pay any outstanding taxes, including local, state and federal taxes. If you have any licenses or permits, those will need to be cancelled.

If you have employees, it’s important to give them as much notice of the closing as possible and ensure that they receive their last paychecks. Also, if you have customers or vendors you will need to let them know about the closing.

Once all financial matters have been settled, you can close your business bank account, but you will want to retain all business records.

Business owner protection

In addition to the steps above, you can further protect yourself as a business owner by making sure that you maintain any necessary insurance policies until the business closes, ensure that you follow all legal and financial requirements, and meet any final compliance requirements with regulatory authorities.