What If I Decide To Close My Business? 
At some point, you may make the decision to close the doors to your business. Perhaps you wish to retire or maybe your business is just not profitable.
You will need to follow certain steps to ensure that you are closing your business correctly. LLCs and corporations must officially dissolve their entities so they are no longer liable for business taxes or state filings. Officially dissolving the business also puts creditors on notice that your entity can no longer incur business debts.
Information. Consult with your accountant and business attorney to determine what steps need to be taken before you can dissolve the business. The type of business structure you chose when you set up your business determines how you will need to close it down.
Authority. Follow the procedures in your organizational documents for the owners to vote to terminate the business. Document the meeting with a resolution authorizing the business to terminate and providing authority to proceed with the necessary steps to close down the business.
Outstanding Obligations. Pay outstanding bills and obligations. Ask for letters that state that your account is paid in full.
Notify Creditors. Send creditors a letter notifying them that the company is being dissolved and letting them know they must submit their claims. Include a statement that claims will be barred if not received by the deadline.
Notify Suppliers and Service Providers. Cancel any vendor accounts. Notify your suppliers when the last delivery should be made and how they’ll be paid. Notify service providers of the final day of services and where to send the final bill.
Outstanding Accounts Receivables. If you have any outstanding accounts receivables try to collect these bills immediately.
Inform Employees. Create a plan to inform any employees that work for your company that you will be closing. Offer assistance to your employees to help them find positions elsewhere. Write recommendation letters or educate them about job placement services in your area.
Notify Customers. Give your customers plenty of notice that you are going out of business and fulfill any contractual obligations. Return any deposits or payments for goods not delivered or services not rendered.
Insurance. Cancel insurance policies.
Notify Lenders. If you have outstanding business loans, your lender will want to know how you plan on paying the remaining balance on the loan.
Notify Landlord. Give your landlord the required amount of notice as stated in your lease. If you are closing your business before the end of your lease term, you are liable for any remaining rent payments.
Licenses or Permits. Inform offices where you hold permits or licenses and make sure they are cancelled.
Assumed Names. File abandonment of assumed names or d/b/a’s.
Final Returns. File a final return with the IRS for the year you go out of business. File the final employment tax returns. Attach a statement to your return showing the name of the person keeping the payroll records and the address where those records will be kept.
Cancel EIN. Notify the IRS that you are closing your business account. State the reason you are closing the account and include a copy of the EIN Assignment Notice that was issued when your EIN was assigned.
Texas Comptroller. An LLC or corporation must be current in all franchise tax requirements, including the final franchise tax report. Close all accounts for all taxes administered by the Comptroller. File a final sales tax form. Obtain a Certificate of Account Status for Dissolution/Termination.
Texas Secretary of State. File a Certificate of Termination together with the Certificate of Account Status for Dissolution/Termination and pay the required filing fee.
Close Bank Accounts. Close out the company bank accounts and cancel business credit cards. Cancel any accounts you hold with vendors.
For more information, please contact Kathy Tremmel at Tremmel Law, PLLC at (512) 539-0317 or kathy@tremmellaw.com.
Copyright 2016 Tremmel Law, PLLC. All rights reserved.
