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Meeting With a Lawyer: Closing a Business

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All business closings need help. Partnerships, limited liability companies, and corporations must file articles of dissolution. They must notify the Secretary of State that they are closing down.

When it's time to close up shop, consider having an attorney help you through the process. Even sole proprietors may want legal advice as they prepare their final documents. Some things a business owner must do during the business closure include:

  • Notifying the IRS
  • Paying final income and payroll taxes and canceling your employer identification number (EIN)
  • Paying all business debts
  • Terminating all outstanding contracts with service providers and settling other financial obligations
  • Paying final paychecks according to state laws
  • Disposing of remaining assets and business property

Many of these duties depend on one another. Depending on your business structure, you may need to consult your board of directors or corporate officers during each step. State laws may dictate when to notify employees of an impending business closure. It's always best to have a knowledgeable business attorney tell you when and how to make each step.

Your attorney will need your cooperation and careful recordkeeping. Any business entity, even a sole proprietorship, should have some documents at hand. The Small Business Administration (SBA) helps small business owners who are closing their businesses.

At your first meeting with your attorney, you should have the following information:

Business Name _________________________________________________________

Business License ___________________________________________________________

Other DBAs ________________________________________________________

________________________________________________________________________________

Business Address_________________________________________________________

________________________________________________________________________

Business Telephone Number_________________________________________________

Business Fax_____________________________________________________________

Business E-Mail Address___________________________________________________

Person to be Contacted_____________________________________________________

Telephone Number of Contact Person_________________________________________

Business Email of Contact Person_____________________________________________

Employer Identification Number_____________________________________________

Date of Incorporation (or the date that the state gave you permission to conduct business)

________________________________________________________________________

When and where you filed your articles of incorporation, registered your partnership, limited liability articles of organization, etc.

________________________________________________________________________

When and where you filed each certificate of trade name, fictitious name, and assumed name

________________________________________________________________________

When and where you obtained a sales tax permit

________________________________________________________________________

When and where you obtained any licenses to conduct your business

________________________________________________________________________

When and where you filed your last tax return

________________________________________________________________________

Full names and addresses of all corporate officers, general partners, members, or any person who is likely to appear on documents filed with the state or taxing authorities.

Attach list

If you have already voted to dissolve:

The date dissolution was approved_________________________________________

The number of votes cast on the proposal to dissolve__________________________

The total numbers of votes cast for and against_______________________________

List any dissolution preparations that have already been made, e.g., tax forms filed, plans for liquidation

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

________________________________________________________________________

If the law firm will be notifying creditors of your dissolution, list the names and addresses of your creditors

Attach list

If the law firm will be collecting your assets, list all business assets

Attach list

The name of your commercial insurance carrier_________________________________

Commercial insurance carrier agent's telephone number___________________________

The name and telephone number of the accountant who will be handling the liquidation or tax issues

___________________________________________________

Other business documents you should provide:

Business bank accounts

Business credit cards

Lease agreements

Operating agreements, bylaws, annual reports (for corporations)

 

Liquidation vs. Dissolution

If your business is undergoing a liquidation or reorganization, you should already have an attorney. In a liquidation, a liquidator is appointed to sell all business assets and pay off any outstanding debts. Your attorney will work with the liquidator and your lenders and creditors to attempt to keep your business from being dissolved. The store may be closed at the end of a liquidation, but the business can still operate.

Find the Right Attorney To Help You Close Your Business

Closing your business is not as simple as flipping the switch and walking away. You need to ensure you've done it efficiently and legally. Even an honest mistake can result in liability long after the business has closed down. Find a business and commercial law attorney licensed in your state today.

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Contact a qualified business attorney to help you tie up all loose ends when closing your business.

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