Bohemia, NY (PRWEB) December 24, 2013
Lawrence Teicher, founder of Long Island CPA firm CFO Consulting Services, responds to an article published by Fox Business, which lists the steps that need to be taken in order to close an inactive business.
According to the December 4 Fox Business article titled “How to Close an Inactive Business Before the End of the Year,” many entrepreneurs avoid shutting down their unsuccessful business ventures because they don’t want to feel like a failure. However, in order to move on, the failed business must be formally closed. Otherwise, the business owner still needs to file annual reports, state taxes, and federal tax returns.
The article says that there is a simple five-step process to formally retire a business. First, the legal entity needs to be dissolved. If a business previously operated as a LLC or corporation, the legal entity needs to be voided by filing an “Articles of Dissolution” or “Certificate of Termination.” Secondly, business owners must complete any obligations that are outstanding, meaning unsettled bills. If a business cannot pay outstanding bills, the article suggests meeting with an attorney to determine the best course of action.
Next, owners should cancel business licenses and permits by contacting the county in which your business is located. The fourth step is to close a business’ federal and state tax accounts. Just because the business is no longer making money does not mean it’s finished with the IRS. Businesses still need to file final tax returns and close its Employer Identification Number. Businesses that don’t do this may be found liable for any unpaid payroll taxes, sales taxes, etc.
The article says the final step of closing an inactive business is notifying vendors and contractors. This involves informing customers, clients and the aforementioned groups of the business’ closure.
Lawrence Teicher, founder of Long Island CPA provider CFO Consulting Services, says, “Closing an inactive business can be an emotional and trying time for business owners. However, it is something that needs to be done. By following the steps listed in Fox Business article, you can make the process as easy and painless as possible. Still, you should take caution throughout this process and seek legal advice.. If these steps are not addressed, it is possible for a business owner to become personally liable for the business’ debts. Owners need to be careful to avoid any action that could result in creditors piercing the corporate veil.”
Teicher continues, “Of course, if you feel unsure about any of the steps listed above, you should contact a finance professional and qualified attorney. CFO Consulting Services can help business owners with the shutdown process and make it an easier transition.”
CFO Consulting Services, LLC provides outsourced, part-time CFO services on an as-needed basis to both small and mid-sized businesses located in the NY metropolitan region. Founded by Long Island CPA and financial expert Lawrence Teicher, CFO Consulting Services follows four main principles: independence, objectivity, competence and confidentiality. These core values have led its clients to achieve lasting success in their businesses.