Corporate Closure
1. Introduction – People make the decision to close their businesses for a variety of reasons: market changes, financial problems, and lifestyle conflicts. Making the decision to close down your corporation is difficult enough, no matter what your reason is.
2. Vote To Close Your Corporation – Your business associates must agree to dissolve the entity by following either the procedures set out in your organizational documents or the rules set out in your state’s business statutes. Make sure that you have your Secretary available to officially record the decision.
3. Collect Monies Owed to the Corporation – If you have outstanding receivables, it’s a good idea to try and collect on them before you legitimize your closure. There is very little incentive for your debtors to pay when they know you’ll soon be out of business.
4. Make Sure Your Comply With Sales Laws – If your corporation was retail, wholesale, or manufacturing, you may need to comply with your state’s “bulk sales law.” Only ten states have these laws, so check with your corporation commission to find out if you need to do this.
5. Pay Any Outstanding Taxes and Debts – Before you notify anyone of anything, make sure that you have planned to pay your final payroll tax deposits and other outstanding debts to the government.
6. Notify the Government – You’ll need to go through the official channels to dissolve your corporation. Find out if you need to file a “tax clearance” or other appropriate forms by contacting the agency that handles corporations.
7. Notify the Corporation’s Creditors – Now that you’ve assured you have covered all regulatory avenues, it’s time to dig into your pockets and pay off whatever debts you can and close them out from under your business name.
8. Prepare to Close Down Shop – It’s time to let the world know that you’re going out of business. Who should you contact and what information do they need?
9. Keep Your Paperwork Trail and Be Reachable – Former employees, vendors, and clients may still need to get in touch with you for a myriad of reasons, so it’s best to not burn any bridges in the process. Make sure you continue to update people of your whereabouts.
10. Business Dissolution Paperwork Checklist – You’ll want to make sure you keep accurate and complete business records when you choose to dissolve your corporation. This checklist will help you get things in order and create a bulletproof paper trail.