Being a business owner can be one of the most rewarding and exciting ventures you’ll undertake. Unfortunately, more often than not, it’s also one of the most stressful and difficult. Although the dream of entrepreneurship is shared by many, being your own boss may not be for everyone. The slog of filing taxes, organizing inventory, marketing yourself, and hiring employees could end up souring the love for your business, and that’s okay. If you’ve decided the stress isn’t worth it, it’s time to make a change and close your business. It takes more than shutting down your website, though. You also need to follow legal procedure to ensure you aren’t penalized later.
Consult Your Co-Owners
If you’re a sole proprietor, you can unilaterally make the decision to close your business.
However, if you are in a business partnership, you must receive their agreement first prior to dissolving the company. The internal procedures for dissolution vary by business, but they should be clearly outlined in the company’s bylaws which should have been written and filed upon opening for business. Regardless of the process, it’s typically prudent to get every owner’s agreement in writing before you begin filing legal paperwork.
Close Your Business with the State
Just as you filed documents which established your business within the state or states in which you’d operate, you also must file paperwork to close your company. These dissolution documents will legally remove your business from the state record and end any privileges or taxes you may have received from owning a business. If you operate in multiple states, you must file dissolution paperwork in each state. If you don’t, you may still be taxed for your company even after you’ve stopped operating.
Cancel Your Licenses, Identification, and Other Business Requirements
You also likely applied for a certification, license, or other record that allows you to do business. With your business closed, though, you no longer need these records. Once you file dissolution documents, contact the agency that issued your licenses or certifications and request cancellation of your licenses. If these require annual payment, this simple step could save you money later on.
Business owners must also cancel their Employer Identification Number and any other state or federal tax information linked to their business to avoid being taxed after closing their doors.
Keep Your Records
After filing to close your business, you still must maintain accurate records from when you owned your company. Much as you may wish to declutter your filing cabinet, you never know if any federal or state agencies will need to access those documents for tax or recordkeeping purposes. Usually, government agencies recommend you maintain your records for about seven years to ensure they complete pending processes successfully.
Business Creation and Dissolution Documents in the Inland Empire
Whether you’re just beginning your entrepreneurial journey or it’s coming to a close, ProSe Legal can help you file all your legal documents right the first time. Our team boasts more than 15 years of experience assisting business owners with their legal paperwork. With locations throughout the Inland Empire, ProSe Legal is always right around the corner to help with all your business formation and dissolution needs. If you need assistance navigating dissolution paperwork for your business, today or call (909) 497-1349.
