Published by FrankNez Team.
Deciding to close down a business is never easy—specifically, the paperwork associated with it and whether or not you still have employees.
Having to lay them off and sell your assets can be troublesome if there is a lack of demand for them in the market. Hence, making your work even harder.
There might be certain things you should be considering and keeping in mind before you close down for good.
This may include all the financial obligations and other liabilities you must meet before you can shut down your business. If you have been in the industry long enough and are willing to close down your business for good, this article is for you.
Read this article to learn about the eight things to consider before you close your business for good.
8 Things to Consider Before You Close Your Business for Good 550
In this section, we tried to outline the eight things you must do before you close your business altogether.
● Submit A Notice of Dissolution
When closing down a business, you will have to file paperwork that declares that you are closing it down. You must submit the notice of discontinuation to the corporate registry in your local city or area.
When trying to close down a financially solvent business, you must also go through the formal process of member voluntary liquidation.
The company’s assets will be liquidated, any legal problems will be resolved, and any unpaid creditors will be compensated by a professional insolvency practitioner who has been appointed as liquidator.
You can learn about declaration of solvency before preparing the document needed.
● Settle Your Taxes
Before you shut down your business, you should remember that you have to pay off all your due taxes. This includes the taxes from last year that are being carried over to this year and must be paid off.
When settling taxes or liabilities, you should be able to show that you are financially solvent and can pay the dues on time.
● Inform Your Staff
When closing down your business, you must inform your staff and employees beforehand. This is because they need to prepare alternative ways as you will be closing down as a business.
Furthermore, you also need to assure and inform them that you will provide them with their due payment for their work.
You should send all the necessary documents to your tax center with payroll accounts containing EI premiums, income tax deductions, and CPP contributions within seven days.
● Clear Your Company name
Canceling your business name is necessary when you are closing down your business. This is because if you do not clear up your business name, it will keep showing that your business exists in real-time when it doesn’t.
● Disable your bank accounts
While you remove your business name and cancel it, it is essential to erase anything associated with it.
It may include business bank accounts and cards related to it. Make sure to cancel all the credit and debit cards and close the bank account.
● Tally up your supplies
If you are the type of business specializing in selling goods instead of services, you might have closing inventory at the end of the month that you couldn’t sell.
You can sell this remaining stock with discounts to liquidate the asset to have some cash in hand. especially if you have a business that contains perishable stock.
● Clear off any liabilities that remain
Paying your taxes is important. However, the paying of other liabilities is very important as well. Hence, try to pay off all the liabilities as soon as possible. This may include debt remaining to suppliers or landlords.
You can learn more about debt when closing down your business.
● Provide your contact details before leaving
Sometimes, people cannot communicate with you further when you close down a business. This is because you are no longer operating, and they have no valid reason to talk to you about debt or possible future prospects.
In such cases, you must leave some sort of information or method of communication, for example, for your suppliers.
Ending a business journey respectfully and in a good manner is what makes you a good businessperson at the end of the day.
Overall, we tried to outline the possible eight things to consider before you close your business for good.
Therefore, we hope you can understand what to do when closing down. From liabilities to staff notice, we hope you got all the aspects of what should be done when closing down a business.
Since you read this article, you might be interested in learning about other kinds of investments.
Related: How to Start an Online Business and Succeed
Frequently Asked Questions
What are the contributing elements to the company’s closure?
The most common reasons a business may actually close down are insufficient capital, personal use of funds, poor location, and poor management. All of this mainly leads to the failure of a business.
When should I shut down my company?
It’s time to think about closing up shop if you see that your business and personal partnerships are hurting significantly.
There is no correct time to shut down your business, but if you notice the financial solvency of your business is curving down, you should probably shut down.
How can you determine the value of a small business?
The total value of the company’s assets, including inventory and equipment, is added, and all liabilities and debts are subtracted.
Which is preferable: closing a business or selling it?
You should always consider selling before you end your company. As a result, the business will be able to pay you well for the time and effort you put into it.
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