Just as a solid business plan is key to starting a business, closing a business also requires a plan – a robust one to serve as a shield from liability in the future. The nomenclature for closing business is also referred to as dissolution, liquidation, or winding down. Generally speaking, dissolution and liquidation will go hand in hand as remaining assets and funds must be distributed accordingly. Funds may be owed to pay off creditors and taxes, and remaining assets will need to be equitably distributed.
The type of business you own will determine the means of closing it – if you are a sole proprietor, you do not need permission to close your business and may do so at any time. However, businesses structured with co-owners, partnerships, or investors should thoroughly review all documents pertaining to inception (think articles of organization or partnership agreements) in advance of drafting a written agreement outlining the decision. A careful inventory of existing licenses or permits is also critical as they must be cancelled in order to eliminate the possibility of future liability. Equally important is paying off all tax debts (income tax, sales tax, employment tax), alerting tax authorities that your business is closing, and finally, cancelling your EIN.
Moreover, there are laws surrounding the dissolution of a business – and which laws pertain to your situation will depend on your type of business; for instance, in California, a corporation or an LLC will require dissolution paperwork submitted the State of California Secretary of State. Failure to comply could lead to continued fees and taxes. With regard to employees, both federal and state laws could impact whether or not employees are entitled to compensation after the business closes.
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Here are several documents relating to closing a business which are currently available on RealDealDocs.com:
Plan Of Liquidation And Dissolution for LUBYS INC, Luby’s, Inc
Cba Florida, Inc. Announces Intent To Call Shareholder Meeting, Proposes Approval Of Plan Of Liquidation And Dissolution
Cba Florida, Inc. Announces Intent To Call Shareholder Meeting, Proposes Approval Of Plan Of Liquidation And Dissolution for CBA FLORIDA, INC., CBA Florida, Inc, LAS VEGAS, NV
Plan Of Liquidation And Dissolution for ICON ECI FUND FIFTEEN, L.P., ICON Capital, LLC, ICON ECI Fund Fifteen, LP, ICON GP 15, LLC, NRAI Services, LLC