Six Legal Steps To Close A Business
If your business is no longer making a profit, or you're just ready to move on to something else, it may be time to close your business. Depending on the type of business, there are many legal requirements that you must meet in order not to be personally responsible for the business.
Use this 6-step guide to shut down your business as painlessly as possible. Following these steps can ensure that your business is properly closed, enabling you to map a new route ahead.
Develop process and checklist
Although closing a company is not easy, there are many processes that must be completed correctly. Before closing the door permanently, a long list of procedures must be finalized. These usually include legal steps that require the assistance of a business lawyer. In some cases, to close a company, an accountant is required in addition to a lawyer. Legal representatives can ensure that legal documents are filled out correctly, while accountants can handle income, income and all expenditures to ensure that everything is legal and that the books do not contain any illegal activities. By merging these two professionals together, the company can be closed with less difficulty.
Notify employees
Employees should be notified that they have more time to find another job. This may be 30 days, or it may only be two weeks. If the company must close quickly, there is no choice but to notify these workers in advance, or even rarely. Using legal representation on these issues can clarify the employee’s notice time so that they can find other jobs. In addition, any business contacts related to customers, income, taxes and other matters must be contacted and communicated with the company's closure. Attorneys can ensure proper filing of documents that finalize all issues.
Voting Dissolution Papers and Notifying Third Parties
When a partnership agreement or articles of incorporation are documented on paper, it is essential to complete the voting process before the individual leaves the company. In order to be completely dissolved, in most cases, two-thirds of the votes must be obtained. For tax and debt purposes, it is recommended to file a dissolution document through the state where the company does business. This ensures that creditors understand that no more debts will be incurred, income taxes and income taxes will cease, and all other processes with the company will end. Employees, business partners and even customers should eventually know that the company will no longer have products and services. Any issues that need to be resolved can be resolved before everything ends.
Settling accounts, government agencies and checkout
Debts should be paid to creditors before the end of all business starts. This also ensures that any profits owed to the person or organisation that closes the company can recover the money as soon as possible in the event that it is no longer given. For any contracts that have deadlines that expire after the business has been sold, these problems may have clauses or proposals that can be made available to those who have signed the agreements. Any entity that has registered a company or has given a licence.
Distribute Assets and Close Bank Accounts
The final step in closing the business is asset allocation and bank account closure. Ensure that real estate and personal property are evaluated. All assets must be allocated in accordance with the business agreement.
Using a business lawyer to assist in closing a business
You must deal with the entire legal field when you close your course. This means that various forms of documents must be signed, read, analyzed, and submitted to the appropriate institutions. For a company, hiring a business lawyer is essential to ensure that all these tasks are effectively and done correctly. These legal professionals may also provide a means of double-checking to ensure that no illegal activities or acts will occur during the closure.