- Decide if you want to dissolve or sell your business. Depending on the type of business, dissolving your business may take less time.
- Once you know what you want to do with your business, it is best to hire an attorney as soon as possible to help you with the following steps.
- Determine what type of business you own:
- Sole Proprietorship – single owner with full liability of costs incurred by the business.
- Partnership – two or more individuals run and operate the business and each has full liability of costs incurred by the business.
- Corporation – business entity that has separate legal standing from its owners.
Dissolving a Business (Sole Proprietorship)
- If dissolving a business, check requirements of your state, locality, and small business administration in order to determine what steps must be taken.
- Notify your:
- Secretary of State;
- County and City Clerk’s office;
- Local federal tax authorities;
- Licensing entities and trade associations;
- Creditors, insurers and suppliers; and
- Customers.
- Pay all bills and debts;
- Abide by employment laws
- Keep records for tax purposes.
Selling a Sole Proprietorship
- It is best to first get the advice of an attorney and a business broker.
- You should consider how much your business is worth. To do this take into account the licenses, leases and other assets of the business etc.
- You must document the sale on the Form 8594 (Asset Acquisition Statement).
- There are probably state filing requirements as well.
- In the sale make sure to transfer all mortgages or leases on the business property or on equipment used for the business.
Selling a Jointly Owned Business
- You should speak to your co-owner early to determine if he or she wants to dissolve your company as well.
- If your co-owner wants to continue to own the company, look to the agreement to see if your contract has a right of first refusal, consent or notification rights, or what change of control procedures are necessary.
- If any of these terms are present you must abide by them.