Closing your small business is more work than hanging a "Closed" sign on your business window and walking away. You need to finalize things legally and, depending on your business; this could be a long process.
- Release a Notice of Closing
You need to let people know you are closing. This includes employees, customers, vendors, suppliers, contractors, bankers, accountants, etc.
- List Assets and Inventory
It's important to have a list of all your assets and inventory so you know what you are responsible for when your business closes.
Plan a date where you will close up shop. It's good to have this date planned early, so you know when to stop production and when to stop selling your product or service.
- Sell Your Business and Assets
Selling your business requires more than putting the space in the real estate market. You may have business space to sell, merchandise, machinery, and raw materials. Make sure the price is right before doing a quick sale on your assets.
The IRS has a checklist for you to follow, outlining everything you need to do from a tax standpoint, when closing your business. This checklist can be found at: http://www.irs.gov/businesses/small/article/0,,id=98703,00.html.
When you close your business, you also need to close your retirement plan. You need to notify participants, distribute plan assets, and notify the appropriate government agency. You will fill out Form 1099-R (http://www.irs.gov/pub/irs-pdf/f1099r.pdf).
- EIN (Employer ID Numbers)
Even if you plan on opening another business, you have to cancel your current EIN account. Write to the IRS (Internal Revenue Service, Cincinnati, Ohio 45999) and explain why you are closing the account. Include a copy of the EIN Assignment Notice if you can.