How Do You Close an Entity? How to Close a Business Entity

by

Closing a business is a complex process that requires careful planning and adherence to various legal procedures. To properly close your business, you must take the following steps.

Steps to Closing Your Business

Here are 7 steps to properly dissolve your business:

  1. Collect outstanding receivables before announcing closure
  2. Notify employees about the closure
  3. Formally agree to close the business
  4. Create an exit strategy addressing steps below
  5. Dissolve your business entity
  6. Notify stakeholders, including customers and creditors
  7. File paperwork to officially dissolve business

Detailed Exit Plan

To ensure a smooth closure, follow this comprehensive 10-step checklist:

  1. Plan closure in time
  2. Discuss strategy with partners or board
  3. Announce intent to dissolve
  4. File articles of dissolution
  5. Notify IRS within 30 days
  6. Admit it’s time to close
  7. Follow required process
  8. Protect assets and credit
  9. Clearly notify stakeholders
  10. Prevent potential lawsuits

Closing a business involves more than simply ending sales and turning off the lights. It’s critical to file the necessary paperwork to formally dissolve the business entity to avoid future liabilities and fees from continued registration. The decision to shut down can be emotionally difficult for founders and should be handled with the same seriousness as starting the business.

Leave a Comment