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Unfortunately, business doesn’t always go the way we want to. Sometimes, even after years of hard work and dedication, it is time to give up and call it quits. Knowing when to close down your business can be tricky, but once you have made the decision to call it a day, you can’t simply walk away. You need to take the time to close it down correctly. This is so it can end in a respectable way which won’t shock your customers and clients.
A recent study claims that four out of ten businesses don’t make it past five years. If your business hasn’t succeeded, you’re joining a large club.
Not sure how to handle this situation? Here’s my checklist of everything you need to do to close a business for good.
Pay Outstanding Debts
You can’t simply walk away from all outstanding debts when you close down your business. You need to inform all of your creditors of your situation and pay them off. This is a legal obligation that you need to follow. In some cases, you may not be able to dissolve or liquidate your company until you pay all debts.
Complete All Current Projects
As well as not being able to walk away from debts, you shouldn’t walk away from any current projects or jobs that you are working on. Keep on working on all of these until the final one has been completed, and then you will be in a good position to close your company. This will also leave you in your clients’ good books so they might be happy to use your services in the future if you ever open a new business or start working for a different company.
Take A Final Inventory
It’s also important that you take one final inventory before you shut your doors for good. This will then show you what equipment you can sell on. Before you sell any computers or other tech devices, you might want to contact an IT Support firm who can come into your office and wipe everything from the machines’ memories and hard drives. That way, you don’t have to worry about the new owners finding a lot of sensitive data that you failed to remove.
Do A Final Payroll And Tax Return
It is a sad situation to be in, but closing a company, unfortunately, means letting all your dedicated staff go. Sadly, there is nothing you can do to get around this. The best thing you can do for them is to give them plenty of notice so that they have time to find a new job. It’s also important that you pay their last paycheck on time as well, even if your company’s funds are low. That requires you to carry out one final payroll. As well as that, you need to get up to date with your company’s taxes and file one final tax return. You need to do that even if you are only a couple of months into the tax year.
Closing your business might not be the easiest process for you to go through, but you need to do it properly so that you can come out with your head held high.