You may probably not know that ending your business by the book is equally important as starting it, and here is why: if you fail to end your business properly, you may have negative consequences when it comes to starting a new one. Of course, dissolving your business can be very stressful and requires a lot of effort.
Here are the main steps that you have to follow:
Dissolution of Your Business
The business owner has to assert the disbandment of the business. As a rule, the statute of a company and the Limited Liability Company operating agreement involves the dissolution process and should be approved by all parties. According to the company’s rules, disbandment resolution should be drafted and approved by all the directors of the corporation. All these actions should be submitted in the organization’s record book.
Registration of Certificate of Disbandment According to Your State
After the voting of disbandment, you have to file all the documents according to the state where you are running your business. If your company has the ability to operate in other states, you have to file the documents for this state too. Keep in mind that this process can vary by state. For example, there are some states which require tax clearing before the Certificate of Dissolution is filed.
Filing Tax Forms
Even if you decide to end the business tax obligations of your company, do not stop immediately. You should end your business according to both the IRS and your state’s tax agencies. You can find the whole business closing checklist on the IRS webpage. Also, if you have employees, do not forget about payroll reporting obligations.
Make Creditors Aware that Your Business is Closing
You should notify your organization’s creditors via mail and explain a reason for your business’s disbandment. Also, you should place an article in the hometown newspaper stating about your business dissolution. It’s not a must, but it is recommended.
All the creditor’s claims should be adopted or dismissed by your cooperation. Accepted claims have to be paid or repaid. You have to implement this process with a professional attorney’s consultation, according to your state’s relevant status.
Sharing of Assets
Once you implement all the above-mentioned steps, all the assets can be distributed among the owners according to the share of owners’ proportion. The results of the distribution should also be reported to the IRIS. In order to complete everything by the law, without bad consequences, it is better to consult with professionals like Prestige Auditor.
So, as we can see, ending a business is not like turning off a switch! There’s a process to it. And our professional team definitely knows how to carry that process along. Let us know if you’re think about ending your business and opening a new one. We can help you with both, and we can also help you with setting up an ecommerce business, ecommerce tax exemption, sales tax analysis, and a large list of ecommerce business solutions!