Closing Your Business
Closing your business can be a difficult choice to make. Kentucky SBDC Business Coaches can provide local guidance in closing your business and dissolving your legal entity, if applicable. It’s also recommended to seek advice from your CPA and attorney.
Follow these steps to closing your business.
- Decide to close. Sole proprietors can decide on their own, but any type of partnership requires the co-owners to agree. Follow your articles of organization and document with a written agreement.
- File dissolution documents. Failure to legally dissolve an LLC or corporation with any state you’re registered in will expose you to continued taxes and filing requirements.
- Cancel registrations, permits, licenses, and business names. Protect your finances and reputation by canceling any of these that you no longer need, including your trade name.
- Comply with employment and labor laws. Reference the Worker Adjustment and Retraining Notification Act (WARN) for employee payment after closing, along with other federal and state laws.
- Resolve financial obligations. Handle final returns for income tax and sales tax. Cancel your Employer Identification Number, notify federal and state tax agencies, and follow this IRS checklist.
- Maintain records. You may be legally required to maintain tax and employment records, among other files. Common guidelines advise keeping records for anywhere from three to seven years.
For additional assistance with closing your business, please contact the Kentucky SBDC to schedule an appointment with a business coach.