Q:

How do you close a business?

A:

Quick Answer

To close a business, you need to file a certificate of dissolution, articles of dissolution or other paperwork with the secretary of state's office. In addition, you must settle debts with creditors and vendors, pay any outstanding taxes, and inform customers that your business is closing.

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Full Answer

  1. File articles of dissolution paperwork

    Obtain articles of dissolution paperwork from the secretary of state's office. Most SOS websites allow business owners to file this paperwork online, but you can also print out copies to send by mail. If you run a Limited Liability Company, partnership or corporation, you must hold a vote with all board members to dissolve the business. Include voting results in the meeting minutes, and submit with business dissolution paperwork. If you run a sole proprietorship, you may need to include a letter of intent to close the business.

  2. Settle outstanding debts and taxes

    Contact vendors, supplies, contractors and customers to settle or to collect any outstanding debts. File final state and federal tax returns, and pay any outstanding tax bills. Some states require business owners to obtain a tax clearance before officially closing an LLC or corporation. A tax clearance is only issued after all outstanding taxes have been paid.

  3. Contact state and local business agencies

    To avoid future fees or penalties, cancel business permits and licenses with state or local business agencies.

  4. Contact utility companies and banks

    Contact utility companies, including electric and Internet, to schedule a time to shut off these services. Contact banks to close business accounts and other financial services.

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