If you are thinking about closing your business, you are far from alone. The vast majority of enterprises shut down within a year, and the situation is even more accelerated in today’s economic turmoil. A skilled attorney can help you through the difficult process of shuttering your business.
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Even in a good economy, many business owners have to face the difficult truth that their business just is not making ends meet, and they will need to close down. There are many reasons for this, including overwhelming debt, inadequate profit margins, lack of customers and aggressive competition.
No matter what the reason for closing a business, the process can get overwhelming and many entrepreneurs do not know where to begin. Consider hiring an experienced debt relief attorney to help you close properly and in accordance with state and federal laws.
The first thing you need to do is identify what type of business ownership you have. Are you a sole proprietor or do have business partners and investors to consider? If you are the sole proprietor, you can make all these decisions on your own, but if you have partners and investors, you will have to call a meeting and come to a mutual decision based on the contracts and legal agreements that you have established.
Fulfilling IRS Obligations
As you probably know, every legitimate business in America is on file with the IRS, and very little can be accomplished without properly filling out the forms and paperwork in accordance with state and federal tax laws. There are a number of requirements including the cancellation of licensing, permits and registration.
Notifying Parties of Interest
There are also a number of parties that you will need to notify of your intention to close. Everyone from your staff to your managers, partners and customers will need to receive some sort of notification. For people "inside" your business including employees, partners and investors, you will need to give an official announcement that lets them know not only that you are closing business, but how it will directly affect them. For customers and the community where your business lives, you should send personal notices via mail and even consider issuing press releases to local media.
Here is a thorough checklist that lays out the process of closing a business:
- Formalize an official agreement and authorization from all owners to close the business
- Seek out legal counsel and certified public accountants (CPAs) that specialize in the dissolving of corporations.
- Compile a complete list of assets, inventory and property that the business has in hand or in use at the time of closing.
- Satisfy or conclude all contracts that are currently under obligation.
- Officially close down operations and shut down all facilities and physical places of business.
- Liquidate and transfer all assets.
- File all financial statements, required tax forms and returns.
- File an article of dissolution for the closing business.
You will also need to close all business accounts and credit cards, and save all business records for future reference.
A savvy lawyer can help you through this arduous process, whether you decide to pursue small business bankruptcy protection or take another path. Getting good counsel is just good business.
Call now for debt relief at 817-737-5436
We offer free consultations
Alice Bower, Attorney at Law, is a personal and small business bankruptcy lawyer practicing in Fort Worth, Arlington, Irving, North Richland Hills, Grapevine, Colleyville, Mansfield, Burleson, Grand Prairie and Bedford.