Real-World Solutions To Real-World Challenges

5 things to do when you close your business

On Behalf of | Nov 4, 2016 | Business Litigation |

Closing a business isn’t something that a business owner takes lightly. While some business owners decide to shutter the doors immediately, this often leaves customers and employees baffled. Proper planning can help you to close your business in the best manner possible. Consider these five things that need to be done when you close your business.

Give notice of the closure

You should give notice that your business is closing. This isn’t always possible, but it is necessary that you try just in case you decide to open another business or start another venture. You should let your employees know about the closure so that they know they need to plan accordingly. You should let vendors who supply you with goods and services know, as well as customers who count on your business. You also need to let any government entities that have issued any documents, permits, or other legal items to your company know that you are closing its doors.

Keep good records

As you move to close your business, you should make sure that you keep good records of everything that happens. This includes the sale of equipment or goods, donations that you make, payments, and anything else that you might need proof of later. Additionally, you should find out what documents or information you will need for tax purposes.

End professional relationships

The end of professional relationships should be handled very carefully. If there is any chance that you will need to work with the company or person in the future, you must ensure that you end the current relationship on a good note. Any other companies that you do business with should be given ample notice about the closing. If you have contracts with these companies, review the contracts to determine what types of notice must be given and how far in advance the notification should be given.

Determine what to do with stock and other assets

You have to decide what you are going to do with the stock, equipment, and other assets that your company still has. You probably don’t want these items to go to waste. You might opt to sell them to other companies. You might be able to donate some of the items to non-profit organizations. No matter what you choose to do with these items, keep good records for your taxes and other possible needs.

Issue final payments

Make sure you make the final payments that your company owes. This includes to vendors, employees, and others who are owed money. You don’t want anyone to come back later claiming that the company didn’t pay what was due, and you certainly don’t need to have to handle legal action taken in an attempt to recover the money. This is especially true if your business was a sole proprietorship.