Starting a business comes with a lot of excitement. After weighing the pros and cons of various structures, you have decided to form a company with a limited liability company (LLC) structure. To ensure that everything goes smoothly, you complied with all requirements and filed all necessary documents.
Signs to Close Down Your LLC
Having to dissolve LLC can be hard emotionally. Not only did you invest your money, but you also dedicated your time and effort. However, there are times when you should look at things objectively and decide to do what is best for everyone.
Your business does not bring you joy. Running a business is like being in a love-hate relationship. It gets too hard sometimes, but there are also times when you see the fruits of all your hard work. But, you should think carefully if the cons outweigh the pros of maintaining your business. If the business hinders you from enjoying life and takes away your self-confidence and peace of mind, it is time to say goodbye.
It is no longer profitable. It is best to close a business that is not profitable and leads to financial losses. Aside from business expenses, you should also think about your basic needs. Assess your situation. Can you still turn the situation around and find ways to bring profit? If the situation has been going on for a while, it is time to decide.
The profit is not enough to make up for the energy and time you spend on it. Money is not the only reason to keep the company running. Think about how your work affects your lifestyle. Will the way you are living be sustainable? Does it always leave you overworked and stressed?
There are disagreements between partners. If you and the other members cannot set aside your differences when it comes to company decisions, you may as well close the business. Owners should have a clear agreement to ensure the future of a company.
Your LLC has reached its maturity. There are instances when the services or products of a company are no longer needed. Supplying products require demand. Thus, it might be time to close the company if you think there is no demand for your products.
Closing Your LLC
Just like when creating an LLC, there are also steps one should take to dissolve LLC. If you and the other owners have officially voted on the closure, you should proceed with taking care of the dissolution process. Regulations may be different depending on the state. Familiarize yourself with the laws before starting the process. You may also employ the services of a professional to assist you with the process.
If your company is not in good standing or it owes back taxes, you may have to get it back on track before dissolving. Research about your local laws so you would know what to do.
If your business is in good standing, then file the necessary paperwork to dissolve LLC. In most states, owners should file documents such as a Certificate of Termination or Articles of Dissolution with the Office of the Secretary of State where your company operates.
Generally, dissolution may also require you to notify the Internal Revenue Service (IRS). Aside from this, you should file the LLC’s annual return for the year that you are closing the business. In case you have employees, you should also file final employment tax returns. After that, you should take care of the final federal tax deposits. You should also include in your report if there are exchanges of property or disposal of commercial property.
You might also have to close the company’s credit lines and bank accounts. Some states may also require you to cancel the company’s licenses.
Having To Dissolve LLC
It takes courage to admit that it is time to dissolve your business. But finishing the process can allow you to move on. That is why it is essential to do it right. You have to make sure you do not miss anything to avoid any problems in the future. Consider consulting a reputable and reliable services company to help you get through this journey. This way, you will have an assurance that you file all paperwork and requirements on time. Choose a company that has experience and is knowledgeable about state laws. Having the right support can make it easier for you.