There are countless reasons why a business owner may choose to end a business: Financial difficulties, time constraints, a desire to move on to a new business endeavor, and many more.
No matter what the reason is for dissolution, it is important for a business owner to make sound decisions when dissolving a business. The financial stakes are high and there is always the potential for costly disputes when other parties are involved.
If you are planning on dissolving a business in the near future, here are a few things to keep in mind:
Dissolving a business takes time: There are many decisions to make, many parties to notify, and many steps to take when closing a business. Business owners may need to notify creditors, notify employees, file dissolution documents, collect on accounts receivable, end commercial leases, pay debts, pay taxes, close bank accounts, and more. The SBA and IRS provide “closing a business” checklists.
Review your contracts: It is important to review your business contracts, which may include partnership agreements, employment contracts, and other types of contracts. These contracts may contain specific language and instructions regarding ending a business.
An attorney can help: It is advisable to consult a business attorney at an early stage. An attorney can help you through the many steps involved in ending a business – or help with a particular issue you may be facing. Additionally, an attorney can help resolve any disputes that may arise during the dissolution process.