Once you’ve made the difficult decision to close your business, you face a daunting list of tasks that must be completed. No matter your reason for shutting down your company, it’s important to be responsible and thorough as you wrap up your business.
Finish Work in Progress and End Operations
At the moment when you decide to close your business, you probably have several jobs or contracts outstanding. Make plans to finish all the work you’ve started or promised to finish. If you’re unable to complete your contracts, exercise any cancellation clauses, paying cancellation fees or returning money already paid to your clients. Stop all marketing and advertising efforts immediately, then formally put a stop to your sales and production efforts.
Notify Customers, Employees, and Creditors
A lot of people are tied up in your business, and you need to inform them of your decision to shut down. Post a sign in your shop, announce your pending closure (and any sales!) on all your social media platforms, and issue a press release or ad in the local newspaper to let people know.
It can be tough to tell your employees that you’re closing your doors, but you probably want to tell them well in advance so they aren’t caught by surprise. Promise them great references and help in finding new positions, and be diligent about getting them to turn in their final expense reports. Pay out your final paychecks, and make sure you collect all company equipment before you hand these paychecks out, including computers, phones, and keys to company cars.
You also need to tell your creditors that you’re shutting down, pay your final bills, and make arrangements to settle or pay off loans.
Sell Inventory and Assets
You’ve probably shopped at “going out of business” sales before, and now it’s your turn to host one. Start discounting your products before you close, and keep deepening the discounts as you get closer and closer to your final day in business. If you end up with an excess of leftover inventory, consider selling it online on sites such as eBay or Liquidation.com, or strike a deal with a liquidation company to get rid of not just inventory but also your company’s hard assets.
Pay Final Taxes and Close Accounts
You have a lot of final taxes to file and pay before you can finally close the doors on your business. If you collect sales tax, you have to submit final taxes and close your retail sales tax and provincial state tax accounts with the appropriate agencies. You also need to file your final tax returns and close your payroll accounts, your Goods and Services Tax account, and your Harmonized Sales Tax account with the Canada Revenue Agency.
If your company is incorporated, dissolve your corporation voluntarily, or cancel your business registration. This involves giving up your business number. You also need to cancel any registrations, certificates, or licences held in the name of your business. As you wrap up your paperwork, consult with your accountant and attorney to ensure you’ve done everything properly and haven’t missed any required documents. Whether closing up your business is a relief or a regret, following this checklist lets you do it properly without missing vital steps along the way.