The decision to dissolve business is never taken lightly. It is essential to know all the options and get help to figure out the best way to go about it. The most common reason for dissolution is simply that it’s no longer profitable: perhaps the company has run out of capital or can’t get new investors and loans to continue operations. As a result, the business becomes insolvent. For example, it could be that it doesn’t have enough money to pay its bills, so it simply closes down.
Here is a guide on startup shutdown in simple steps;
Seek Permission From Corporation Or LLC Owners
If you are a one-person corporation or LLC, it will be easier to dissolve your business because you own it, and there is no need to go cap in hand to other owners. If there are other owners involved, they must approve the dissolution.
Some states have laws that make it easy for an owner to dissolve a corporation or LLC. In these states, the owner can dissolve by filing articles of dissolution with the state secretary of state and paying a small fee. Other states require more steps, such as holding a business meeting and getting the approval of all owners. However, for a flawless process, contact Goodbye Startup professionals.
Before dissolving your business, check with your state’s secretary of state to see what steps you’ll need to take to dissolve your business legally. Also, check with any professional service providers or trade associations you’re members of. They may have rules or regulations about dissolving your membership or requiring that you do so before dissolving your corporation or LLC.
File The Certificate Of Dissolution With Your State
If you are wondering how to close a business, the next thing you need to do is file a Certificate of Dissolution, also referred to as Articles of Dissolution or Certificate of Cancellation, with the Secretary of State’s office in the state you incorporated. Typically, this is done online, but it’s important to send along a letter requesting that the certificate be processed immediately. In some states, like Texas and Ohio, you will need to pay an additional fee for this service. Once you’ve filed your papers with the Secretary of State, your business is dissolved.
You’ll want to notify creditors by sending them written notice of your intent to dissolve your business. This could be as simple as sending them a letter via certified mail. This letter should include information about how much they’re owed and where they can direct their remaining questions.
Finally, you’ll need to wind up your affairs as a company. This means settling any outstanding debts and ensuring everything is properly accounted for in your books. If you’ve been using cash, now would be a good time to convert all of this into checks or money orders so that it’s easier for you to manage when tax season comes around next year. You’ll also want to make sure your federal tax ID is canceled, which can be done by filing IRS form 8832.