Every year, about 9 percent of the businesses in America shut down for one reason or another. Some do it because they’re not bringing in enough profits, while others do it because of retirement.
Regardless of the reason, there are certain steps that you’ll need to take when dissolving a business:
Let any business partners, board members, or other officials know of your desire to dissolve your business
If you’re the sole owner of your business, you won’t be required to let anyone at your company know about your desire to dissolve your business. But if you have partners, board members, or other high-ranking officials, you’ll need to inform them before dissolving your business. This should be done in writing as soon as possible. Whether you are a single member or a multi member this decision needs to be documented in your Meeting Minutes.
File dissolution documents with the state in which you were first registered
Once you’ve given those around you the proper notice about your decision to dissolve your business, you’ll need to file paperwork with your state. The paperwork process differs from one state to the next, but there is usually a Certificate of Dissolution that you’ll need to file to tell your state that you’re closing your business. In most cases you will also have to first complete a “final” return and receive a tax clearance from the IRS.
Inform the IRS about your decision to dissolve your business
Even if you’ve decided to close your business, you’ll still be on the hook for the previous year’s taxes as well as the current year’s taxes. You’ll need to complete a “final” tax return once you have closed out all business accounts.
Dissolving a business can be almost as confusing and stressful as starting one. Trader’s Accounting can make things slightly easier on you by offering trader business dissolution services. Call us at 855-334-7936 today to get started.