Real-World Solutions To Real-World Challenges

3 things to know about closing your business

On Behalf of | Feb 6, 2017 | business & commercial bankruptcy |

You worked hard to build up your business, but things haven’t been going well for a while. You are thinking about closing your business. You can’t just close the doors and walk away. You must follow specific laws to dissolve the business properly.

Make proper notifications

You must notify everyone that the business is closing. Customers, employees and creditors need to know what is going on. Not only is this the good thing to do from a moral standpoint, it might protect you from issues later.

The manner in which you notify people depends on the type of business you have, as well as state statutes that apply to your situation. For example, notifying people via a public notice in the newspaper and putting a statement up on online accounts might be suitable for a restaurant or store. Seeking out help to determine the notification requirements can help ensure you are doing things in accordance with the applicable laws. You must also notify any licensing entities and other government agencies that need to know your business is closed.

Plan to cover the bills

Just because your business closes doesn’t mean that you don’t have to cover the bills. You need to make plans to get creditors taken care of so that you aren’t sued later. You can sell off assets to get the money that you need to cover the bills. Working with the creditors on payment arrangements might be necessary if you don’t have the cash to pay all of the bills right away. In dire situations, filing bankruptcy for the business might be necessary. Pay any employees for the time they worked for you. This must be a priority because they need to be able to make ends meet until they find a new job.

Keep accurate records

You must keep records of all transactions related to the closing. This includes the sale of equipment and other business assets. Keep records of payments to creditors, vendors and employees. The amount of time you have to keep records varies depending on the type of record.

These records come in handy if someone tries to launch a lawsuit later over claims they didn’t get paid. If you have a record of the payment, you can use it in your defense. Additionally, keep documentation of leased equipment returns. You can present the documentation if any questions about the return come up.