How to Close Your Business the Right Way
Closing a business requires more than just hanging an “out of business” sign in the window and locking the doors. Depending on the circumstances, the closing of your business can cause high levels of stress and anxiety, especially for those unfamiliar with the proper steps to take and the correct forms to file. While both the state of California and the federal government offers resources to assist, the help of an experienced business law attorney could make all the difference.
When closing a business in California, the owners must:
- File final year current tax returns
- File proper dissolution, surrender and cancellation forms with the California Secretary of State’s office within 12 months of filing the final tax forms
- Refrain from conducting business in the state after the final taxable year
This three-step outline, in a very general sense, is the procedure one must undertake for closing a business. The reality of the situation involves the filing of a number of forms with both state and federal authorities, and failing to follow proper procedure could result in unnecessary stress and even litigation. It is important to remember that all tax forms remain open to audit until the expiration of the statute of limitations. In addition to filing final state and federal tax returns, it is important to:
- File all employment tax forms and attach appropriate statements
- Issue final wage and withholding information to employees
- Report capital gains and losses
The list goes on, and unless you have a full grasp of all the forms needed for filing, a single omission could create cause for business litigation. It seems closing one’s business could be just as time-consuming and taxing as opening a business, so the right business and corporate law knowledge and assistance are critical.What are Your Reasons for Closing the Business?
Of course, the filing of forms could be the easiest part of closing the business if it is being done so by choice. Any one of the following listed reasons is cause for a business closing and would call for the focused assistance of a business law attorney to ensure every detail is managed properly:
- Filing for bankruptcy
- Breach of contract or business litigation
- Loss of a main supplier
- Shareholder disputes
- Dispute between partners
- Death of a principal partner
Regardless of the reasons for closing your business, an experienced San Jose corporate law attorney can assist you in properly closing your business. SAC Attorneys LLP provides clients with the in-depth knowledge necessary to handle all matters of business law. For a free consultation, call the SAC Attorneys LLP at (408) 436-0789.