Stepping away from your business is not an easy task. You’ve put blood, sweat, and tears into making your dream of owning a business a reality. So, how do you know when it’s time to close the doors? There are actually three telltale signs.
The business is continually losing money. Without any profit, you’ll have a difficult time paying your bills and your employees. If you’ve started to rely on credit cards and loans to meet these costs, you’re only putting yourself further into debt.
Your services or products are no longer needed. Some businesses have a shorter shelf life than others, especially if they rely on a trending fad. Once that fad has run its course, it’s time to move on.
The thrill is gone. If you find yourself no longer enjoying your work or resenting it, you may want to consider selling or closing the doors.
If you’ve been struggling with any of these issues for an extended period of time, it’s time to ask yourself the tough question – “Is it time to close my business?” Remember, there’s nothing wrong with admitting that it’s not working. The important thing is to take the necessary steps to ensure you close your business properly and don’t leave yourself with a legal mess.
Close Corporate Filing Requirements
One of the hardest decisions to make as a small business owner is knowing when it’s time to call it quits. Unfortunately, closing your business is not as simple as hanging an “out of business” sign on the door. There are many things to consider and paperwork that must be completed, including final tax filings. Depending on the structure of your business, you may be required to file many of the following:
Final quarterly or annual employment taxes
Final wage and withholding information
Final tip income and allocation
Final employee pension and/or benefit plan return
Final payments to subcontractors
Corporate dissolution or liquidation
Business asset sales
Sale of business property
You will also be responsible for submitting final tax returns for the business, as well as making final tax payments (if applicable). If you don’t file final documents, you could be in for a real headache. Taxing authorities will assume you are still in business and start assessing debt. You will also be at risk if there are any pending lawsuits. At Tax Defense Network, our close corporate filing services will help you determine which forms need to be filed, and we will assist with any IRS asset investigations, as needed.
Our affordable package includes:
A Dissolution Checklist
Final Tax Return Filings
To learn more about our close corporate filing services, contact us today for a free consultation.
Tax Defense Network
“Every ending is a beginning. We just don’t know it at the time.”
— Mitch Albom
Close Corporate Filing FAQs
Q:What steps should I take once I decide to close my business?
There are many details to address when closing your business. Some are obvious and others may easily slip through the cracks, especially if you don’t have a plan in place. Download our Small Business Closure Checklist to help you stay on track. Tax Defense Network can also help with the various tax filings required.
Q:Am I required to notify my creditors once I decide to close my business?
Yes. Many states require that you place a notice in your local newspaper alerting people that your business is closing. You should also send letters to your creditors explaining that your business is closing and provide a mailing address for those that wish to file a claim. Be sure to include the deadline for submitting a claim (generally 120 days from date of notice), as well as a list of what information must be included in the claim.
Q:Can I dissolve my LLC if my partner(s) don’t want to close the business?
Unless you have a buy-sell agreement, you will need to petition the court for judicial dissolution if your partner(s) do not want to close the business.
Q:Should I pay my taxes or creditors first?
When closing a business, you should always pay your taxes (sales, income, and employment-related) before any other debts, especially if you owe payroll taxes. If you don’t, the IRS can hold you and any other owners personally responsible for the payroll taxes, even if you were operating as an LLC or corporation.
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