Donald W. Hudspeth
June 08, 2015
Phoenix ,AZ 85012
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Whatever reason you have for closing your business, from overwhelming debt to wanting to do something else, there are a number of steps that you will need to follow. The process for getting out of business successfully requires planning.
If you are a sole proprietor then you may make the decision to close your business all by yourself. However, if you have a partnership or a corporation then the partner or other corporate officers are going to have to vote to close the business as well. Exiting a partnership or corporation is a multi-step process that can take from weeks to years depending on the size of the organization and the reasons for exiting.
One of the first things that you will want to do after you decide to close your business it to satisfy all of the Internal Revenue Service (IRS) requirements by filing the proper forms and disclosures. You will also need to cancel all of your permits, registrations and licenses. In addition you will want to notify your employees and customers and pay your business debts.
The process of closing a business typically includes the following steps:
You must file an annual return for the year you go out of business. If you have employees, you must file the final employment tax returns, in addition to making final federal tax deposits of these taxes. You will also need to file returns to report disposing of business property, reporting the exchange of like-kind property and changing the form of your business.
Below is a list of typical forms and reports that you will need to file when closing a business, depending on your type of business structure:
You will want to make a final check to make sure that you have covered all the steps for closing your business. If you have properly closed your business then you have paid all of your debts, paid all of your taxes, satisfied all of your customers and cleared your inventories. In addition, you will have told the local, state and federal governments that you are no longer in business.
You may want to get professional assistance to help guide you through the process of closing your business. Depending on the size and field of your business, some of the professionals you may want to consult include: lawyers, accountants, business brokers, auctioneers, tax experts, bankers and the IRS.