A variety of circumstances can lead to the closure of a business. Financial performance is but one of the many reasons that can lead to the closure of a business. Perhaps the purpose of the business has been fulfilled and the business entity is no longer required or the business activity has been sold and the business entity is but a mere shell.
Too often the owners of a business in many of these situations, simply permit the state to dissolve the business entity administratively. However, state law provides procedures for business closures that can offer certain protections from creditors, including governmental agencies, if the procedures are followed. It is also common for federal and state agencies, such as the Internal Revenue Service, the Department of Revenue, Labor & Industry, and Employment Security, to require specific filings when a business is closed.
Generally, if the business owner follows the procedures for closing their business rather than allowing the state to dissolve the business administratively, future interaction with creditors and federal and state agencies can minimized. If you are considering the closure of a business, we can help guide you through the process of closure and dissolution.