A closing your business filing checklist

In the unfortunate event that you find yourself working beyond your means and need to dissolve a personal business to avoid finding yourself in debt, it is important that you take the right steps at the right times, especially in regards to filing taxes. Shortchanging the dissolution process can results in hefty penalties, fines, even legal action being taken against you. With that in mind, here is a checklist of what you need to think about in the even you need to close up shop.

You will need to file an annual tax return for the year you go out of business

Even if you are not currently operating or will show a loss, you are legally required to file taxes for the year you dissolve your business.

Issue and report final W-2s, 1099s and withholding information for employees

This includes any wages or income generated by tips or expenses paid to independent contractors.

Report capital gains or losses as well as company shares

Capital gains are profits coming from the sale of a a company's stock, bond or real estate, where the sale price exceeds the purchase price. Similarly, losses means these capital assets sold at a loss. Report this information as well as any remaining shares held by partners or shareholders. 

File final employee pension/benefit plan

This will need to be paid out to employees upon the dissolution of the company. 

Report corporate dissolution or liquidation

This is one of the most important steps in the process; it will inform the government that your company is no longer in operation and thus you are not subject to the tax codes you might be as a business owner.

Report sale of business assets or property

This will require you to give a fair market value, as well as the final purchase price of the remaining assets.

The Law Offices of Donald W. Hudspeth, P.C. are here to offer superb legal advice to those looking for help with business dissolutions, formations, partnership disputes and more. Call us today to benefit from our years of experience in business litigation. 

Categorised in: Business Law, C-Corporations & S-Corporations, Dissolution & Partnership Disputes, Dissolving a Business

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