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If It's Time to Close Your Business Check These Tactics Featured

If It's Time to Close Your Business Check These Tactics "Still Awesome | Instagram: @timmossholder"

Closing a business may seem like a drastic decision to make, but sometimes it ends up being the right one. This is often a good choice if you are not committed to it or are not making enough profits to sustain your business. You can also close your business if it has fulfilled its objectives and you feel there is nothing else you can do. While it may appear easy, closing a business after years of operation is not always simple as it looks. It isn't very easy, especially considering laws keep changing. Here are some tactics you need to check to help you do this correctly.

 

  1. Decide to close

As simple as it may appear, deciding to wind down operations can be difficult, especially if your business is a partnership. If this is the case, all partners or co-owners must first agree on this before anything else. You must follow all the articles of organization and document everything in a written form as a dissolution agreement. Things, however, may be easier if you are a sole proprietor.

  1. File dissolution documents

Even if your company is a sole proprietorship, you must follow the law in dissolving it. Failing to legally dissolve your LLC or corporation in an area you registered may expose you to lawsuits and problems associated with taxation. Before embarking on this, you must check the requirements from the Secretary of State, Business Bureau, or Business Agency websites.

  1. Cancel all registrations, licenses, permits and business names

During the registration of your business, you register your business name, obtain permits and licenses. Similarly, you should follow the same procedure and terminate all your licenses, permits, registrations, and business names when winding down operations. Doing this protects your reputation financially as these critical identifiers that you no longer need may be used illegally.

  1. Check if you have complied with employment and labor laws

Whether you are a sole proprietorship or a partnership, you must comply with the employment and labor laws before winding down your operations. This is the most sensitive part because failing to consider your employees may land you in trouble. The things you need to consider include loss of employment, giving notice to employees, and compensation. Before closing operations, ensure that your employees are notified according to the labor and employment regulations, and everyone has been compensated accordingly.  This will ensure you avoid penalties and potential lawsuits.

  1. Resolve all your financial obligations

In most cases, businesses have debts at any given time. Before closing your business, handle issues such as taxes and debts you owe others. If you have an obligation you have not cleared, clear them before ending your operations to avoid damaging your reputation. Cancel your employer ID number and notify tax agencies both at the federal and state level. You can check the IRS website for more instructions on how to close your business for more of these.

  1. Keep all the records

Even if you do not like it, you are legally required to keep tax and employment records for your company for some time. The law requires that you keep these records for between three to seven years. Apart from the legal requirements, it is good to do so because it can help in case a dispute arises.

In summing it up, if you feel that it is time to close your business, a good thing to do is consult an attorney well-versed in these issues. Ensure that you know the correct procedure and request help from the relevant authorities if you face an obstacle.

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Scott Koegler

Scott Koegler is Executive Editor for PMG360. He is a technology writer and editor with 20+ years experience delivering high value content to readers and publishers. 

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