An entrepreneur in Louisiana may cultivate and grow a business for many years. However, for a variety of reasons, they may reach a point where they decide that it is best to close their doors. Having an exit strategy in such situations is imperative to ensuring that the process of closing your business runs smoothly and effectively, and that it complies with all applicable business laws.
First, while sole proprietors can decide to close their business whenever they want, if a business owner is in any type of partnership, all co-owners to the business must agree to close it, oftentimes in writing. In addition, depending on the business type at issue, the parties may need to follow their articles of organization when closing their business. In addition, if the business is a corporation or limited liability company, dissolution documents must be filed with the state. If the corporation or LLC fails to do this, they may continue owing taxes and they may still be subjected to filing requirements.
If the business has any registrations, permits and licenses, these items must be canceled to close the business. Trade names and business names should also be cancelled, so that no harm is done to the business’s finances and reputation. When a business closes, it must follow any applicable labor and employment laws with regards to issuing employees their final paychecks.
Any other financial obligations, such as tax obligations should be fulfilled. The employer identification number should be canceled, and the Internal Revenue Service and state tax agencies should be notified that the business is closing. Depending on the circumstances, the business may need to retain tax and employment records for several years.
This post only glosses over the steps a business owner needs to take to dissolve his or her business. There may be other obligations that must be met to legally close your business, depending on your situation. Therefore, business owners looking to close their doors will want to make sure they understand all their legal obligations, so no mistakes are made that could stymie the closing process and negatively affect them in the future.