Closing the Doors
When a business decides to close its doors, it must do more than simply lock the doors. Just as in the beginning, there are specific steps to follow to dissolve a business. If that business has been incorporated, there are a few additional steps.
From a simplistic accounting viewpoint, it is a matter of emptying the balance sheet. Assets are liquidated, creditors are paid, and shareholders are given their respective portions of the liquidation. By state statute in Idaho, the dissolution must be filed with the Secretary of State. The necessary form is found on the Secretary’s website. And of course, the IRS must be settled with as well.
The IRS provides a checklist for businesses seeking to dissolve. Among others, this list includes:
- Make final federal tax deposits
- File final employee pension/benefit plan, final quarter or annual employment tax return and final tip income and allocated tips information return (if applicable)
- Issue final wage and tax withholding to employees and payment information to any subcontractors
- Report from W-2’s and 1099’s issued
- Report capital gains and losses, partners’ or shareholders’ shares, corporate dissolution or liquidation, and sale of business assets or other exchange of property.
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