It’s a sad day when a small business has to close down. Many small businesses have been liquidated just in the last year – some due to Covid-19-related issues and some for not complying with tax returns. The IRS can seize your assets and close down your business.
Restoring a tarnished tax reputation
If you run a small business, it can be stressful seeing other small businesses shutting doors for the last time. If you’re not tax compliant, you can’t obtain funding even and paying penalties can sink a small business.
Tax relief services can restore your tarnished reputation with the IRS. Fortress Tax Relief does all communication with the IRS, and with their experienced tax attorneys, they use their vast knowledge to avoid your company paying thousands of dollars in penalties. They hold an A+ rating with the BBB and by solving your tax issues, they can keep your business afloat and restore your peace of mind.
Work out an exit strategy
It’s not only the coronavirus that has compelled so many businesses to close their doors, it’s their limited cash reserves too. Closing a business is complicated, with a lot of legal paperwork to contend with. Not taking the correct steps to close it, puts you at risk of legal disputes and lots of heavy, unnecessary fees.
You will need to formulate an exit strategy and work out the appropriate way to shut down the business. This will include roping in the services of accountants and lawyers.
A collections strategy
With outstanding accounts receivable, you’ll need to think of a collections strategy. Once it’s known that you’re closing, people will be reluctant to pay, but you need the cash. It is wiser to collect before you announce your closing. As an incentive, you can offer discounts for payment and be content to collect some funds as opposed to nothing at all.
For those accounts that you can’t collect, you can sell them to a factoring agency. They buy unpaid invoices at a discounted rate and you at least get a percentage of the invoice.
Notify your creditors
Your business will have to cough up for any outstanding debts. All your creditors will have to be informed of your closing. It can be to your benefit to find out if there are any laws that dictate the way you should go about doing it. You’ve got to time the way you do things because some suppliers might put a stop to some of your orders if they know you’re closing.
When closing business, you have to notify everyone you’ve been relying on, from the banks to creditors to insurers and others. Sometimes it is seen as a legal requirement.
Dissolving the business
If you don’t officially dissolve your business, it could mean you being liable for taxes and filings. There are some instances, like when your business is a sole proprietorship, that you don’t have to take legal steps to dissolve it.
It’s time to close the chapter on your business and to cancel all permits and licenses to trade. You will also need to deregister your business name and state that you will no longer be doing business under that name. Wherever you’ve conducted business, you’re going to have to submit articles of dissolution.
All your customers, too, will have to be informed of your intention to close. If you have any outstanding jobs that you can see you can’t finish, you will have to refund payments made on the particular jobs.