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Common steps to take to close a business

Mar 25, 2021 | Business Disputes

Owning and operating a business can seem like a dream for many Florida residents. In some cases, that dream may come true, but rather than bringing the fulfilling feeling that owners thought, running a business may seem like more of a nightmare. As a result, whether because of dissatisfaction or because an owner has simply run his or her course with a company, the decision to close a business may come about.

In some ways, dissolving a business can seem like as much work as starting one. There are steps to take in a particular order, parties to notify, paperwork to file and much more, but it can all depend on the type of business entity involved. For example, a sole proprietorship may be able to simply close its doors and discontinue operations. However, a partnership or corporation would need the agreement of the governing parties.

Some other steps that would take place during this process include:

  • Filing documents with the state related to dissolution
  • Cancelling licenses, permits and registrations
  • Properly compensating employees after closing in accordance with federal and state laws
  • Filing final tax returns and paying remaining tax obligations
  • Cancelling any employer identification numbers
  • Keeping up with business documents and records for several years in case any questions arise regarding business operations after closing

If an owner decides to close a business, following the dissolution laws and procedures to the letter is critical. If Florida company owners do not adhere to the law or follow proper steps, they could face penalties from the IRS or the state or could set themselves up to become the victims of fraud if someone else continues to use active permits or licenses. Because these steps are so important, having legal assistance through the process is wise.