Sometimes, you just have to close a business. Whether it is because of the economy, death, or because you can no longer manage the business, it’s always a huge decision. Once you make the decision, you must follow steps to close the business. If you are closing shop because the owner died and no family member wants to continue running it, you may have a few extra steps, depending on the size of the business.

Know the Type of Entity

If you are closing your own business, you know how it is incorporated. But, if you are going out of business because the owner died, you will need to find out the type. If the business is a sole proprietorship, you do not have to have permission from anyone else to close the business. However, if the business is a limited liability company, partnership, corporation, or a non-profit, the co-owners must agree. If the business has board members, the members will most likely have to vote on it your decision.

Businesses in Probate

If the business is part of an estate that must go through probate, you may have to get permission from the probate court to close the business. Because probate matters are often complicated, you should always retain a Florida probate attorney with business law experience.

File Dissolution Documents

File the appropriate dissolution documents with the Secretary of State. If you do not file dissolution documents, Florida will continue to tax you on the business. Eventually, the state will administratively dissolve the business, and you may end up paying taxes and fees that you otherwise would not have had to pay, depending on the situation. Additionally, if you do not close the business, the estate could be held liable for lawsuits and other legal problems that may arise.

Cancel Permits and Licenses

Contact any agency that issued a permit, license, or registration to let the agency know that you closed the business. Many agencies will continue to tax or charge the business if you do not let them know that the business is closed. Florida requires businesses to have several registrations at the local, county, and state levels.

Employees

If the company has employees, make sure the business pays them pursuant to any state or federal laws that might be applicable. You will need to save employee information for several years. Additionally, you will need to send each employee their end-of-year tax statements, whether they are W-2s, 1099s, or other statements.

Employer Identification Number and Taxes

Pay any taxes that might be due to federal, state and local governments. Cancel the EIN and the state sales tax numbers. Be sure to keep records of this information, including the date you closed your accounts and the amounts the estate paid for the final taxes.

Selling Assets

Before you close the business bank accounts, sell any equipment, supplies, real estate and other property associated with the business unless you decide to sell the business as a whole. If the business is part of the probate estate, deposit the money into the business’s bank account or follow instructions from the probate court.

Whether you are selling the business as a whole or you are liquidating the business, know how much the real estate, fixtures, business property such as vehicles and machinery, and supplies are worth. If you are selling the business as a whole, be sure to value the customer list. If you plan on keeping anything in the business, remove it before you list the business as a whole for sale.

Close Bank Accounts

Once all checks for employees and taxes have cleared the bank, close the bank account. If the account still has money in it, transfer the money according to probate instructions if the business in part of a loved one’s estate. Keep documentation of the transfer, especially if you are transferring the money to your personal account. Keep documents showing that you are entitled to the money along with the transfer documents unless the probate case has been closed.

Contact France Law Firm If You’re Going Out of Business

No matter what reason you are closing your business, contact an estate planning attorney at France Law Firm for a consultation to discuss your options and to determine the best course of action, whether it is liquidating the business, selling it as a whole or selling the business’s assets.