Closing Your Business: What You Need To Do

When opening a new business, no one ever thinks about what would happen if they had to close down at some point in the future. Every entrepreneur opens a new business with the intention of being very successful. However, many businesses do not work out, and the business owner eventually have to close them down. If your business didn’t work out exactly like you planned, and you now have to close it, you may be unsure of the necessary steps that are required of you. Here are a few things to consider when you are in the process of closing your business.

Cancel Permits and Licenses

In many areas, you have to buy either a business permit or a business license from your local government to do business. Most of the time, you have to pay an annual fee to keep the license or permit. If you are closing down your business, you need to contact the local government to find out what it takes to cancel your permit or license. You don’t want to have to continue paying for this permit or license while you are no longer running a business.

Exiting the Lease

If you were leasing a property for your business from a landlord, you will need to go through the proper steps to exit the lease. Every commercial lease will have some kind of clause built into it to handle what happens when the business needs to leave. In most cases, you have to pay some kind of an early termination fee to the landlord. These terms are open to negotiation, and you may be able to work out a deal with the landlord. If you don’t have any extra money to pay the termination fee, you may risk getting sued by your landlord to pay what you owe.

Selling the Property

If you owned the property that you operated your business from, then you will need to consider selling it. If you don’t have any other potential uses for the building, you can list it with a commercial real estate agent in your area.

Getting a Storage Unit

Many businesses have a lot of equipment and inventory on hand when they close down. If you don’t know what to do with it all, you may want to consider renting a storage unit. With a storage unit, you be able to move everything from your office into storage until you figure out what to do with it all.

Final Steps

In this situation, you will also need to file a final tax return and pay any outstanding taxes. You may have to pay sales taxes and income taxes. If you had a legal entity set up, you will also need to file a form with your state to dissolve it. At that point, you should be about ready to move on to the next step in your life.

Image by gill.holgate and licensed through Creative Commons. 

Paul Benjamin is a District Manager at EZ Storage, a provider of self storage units for over 30 years. To learn more view the EZ Storage official site.