Close Your Small Business in 8 Simple Steps
There might be various reasons to close a small business like financial problems, retirement or starting a completely new business. It is not a very easy task to close a business. There are various procedures involved like financial ramifications, tax issues, and alternative employment arrangements for your employees and relationship with customers and suppliers. You should be well informed about the steps involved in closing a business to make the process smoother and less cumbersome.
8 Simple Steps for Closing a Small Business
Closing a small business involves various steps and it is important to keep in mind that when you start a new business, you are responsible and liable to your creditors, customers as well as the government. Some steps involves in closing a small business are:
- Communicate to all concerned with your business about your plans of closing the business, especially your employees. It is important that they are informed about the reason and the circumstances so that they can start making alternative arrangements and look for new jobs. It becomes even more important if they have been with you since the time of inception of your business.
- After the employees, you should inform your creditors and give them proper timeframe. If surplus stocks are there, then you should make arrangements to sell them.
- Develop a detailed inventory of the equipment that you have invested in for the running of the business and start selling it to avoid last minute delay.
- You should check your financial statements and settle unpaid bills. You should also pay off the outstanding amounts to your suppliers and close your accounts at the earliest. You should give salary to all your employees and close your accounting books.
- You can refer your employees to other companies so that they are all suitably placed before you close your business.
- File the necessary closure forms and collect information required to handle your annual tax payment for the period when your business was functional. You do not want the government to be after you for non-payment of taxes after closing your business and venturing into something new.
- After closing your business, you should file the necessary forms to inform your state. Filing a Certificate of Dissolution (also known as Articles of Dissolution) varies from state to state. You should also file the necessary forms in various departments of the government so that they are informed about the closure. Your closing a small business is incomplete without going through this step.
- The final step is to pay all your outstanding taxes and any fees needed to close the business. You should ensure that you have officially and formally dissolved the company.
You should be well informed about the steps involved in closing a business to make the process smoother and less cumbersome.
