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Many business owners decide that it’s time to shut down their business for many reasons. Sometimes, the decision comes at the end of a lengthy run or after a major loss in revenue. It could also be because the company no longer has financial options that are viable – contracts have ended, or the market is shifting too quickly to remain competitive.

It’s crucial to make plans, and then follow through with it. A qualified accountant or lawyer can help you figure out the best method to eliminate assets and ensure that all legal obligations are fulfilled. This includes filing dissolution documents and rescinding all registrations and permits in addition to paying outstanding taxes and closing business accounts. Notifying creditors, paying off debts, and settling financial obligations are also included.

Other important aspects to consider include the need to notify customers and return the money for orders that have not been fulfilled. Additionally, it is important to inform employees and provide them with as much notice as possible so that they can come up with their exit plans. This will preserve relationships and help avoid unnecessary frustration. It’s also a good idea to review and study the business records so that you can efficiently close out the company’s finances, including resolving financial obligations, issuing a final payroll, and closing company credit cards (which could impact your personal credit ratings).

It’s now time to close your company. In the event of a failure to complete any of these steps could cause penalties and additional costs. The IRS has a list of things that you need to complete. We also recommend that you consult other government agencies like professional licensing boards, local, state, or federal tax agencies.