Steps to Closing a Business
Part of the experience of the entrepreneur is closing a business. There may be different reasons why a business should be closed down but whatever this reason may be, there is still a systematic way of closing down a business.
Read this article to know these steps in closing a business.
An entrepreneur or a businessman does not only have to deal with starting a company. If he has already a company and have been operating it for some time, different reasons may arise that he has to close down the business. It may be for the reason that the business has incurred too many and heavy debts that operating it is no longer feasible. Or probably, the businessman has decided that it is already time to venture into another line of business. For whatever reason, closing down a business follows certain steps. Just as starting a company, closing down a business should be systematic so no unnecessary problems that will create hassle for the owner may arise. Below are steps on closing a business:
If one is the sole proprietor of the business, the decision to close down the business is exclusively his. But if the business is owned by several people, then the need for voting whether the business will be closed down should be done.
When all is decided that it is time to close a business, the issue with Internal Revenue Service must be tackled. As a rule IRS should be made happy with the steps to closing a business. The step to closing a business is the payment of quarterly taxes for employee’s Social Security withholdings. The owner should file a final quarterly tax forms and should report final form W-2s to his employees. The owner should also disclose information regarding shareholder and employee pension plan. As a rule, one’s tax preparer will assist the owner in properly closing a business with IRS.
When all is already settled with the IRS, the next entity one should satisfy with is one’s creditors. All the debts that the business has incurred should be paid. Paying all the debt of the business will give the owner a good credit rating and leave a good business name.
Breaking the News
This seems to be the hardest of all the steps on closing a business. This is breaking the news to all of one’s employees and customers. Closing down a business may be a good move for a businessman, but this is never good to any employee who faces the dreadful prospect of having no job.
When all is done and the steps on closing a business through, one may need to make an inventory and turn them into cash by having a business sale.