How do you shut a business down?
When a business fails, what should the owner do? What steps should they perform, to ensure all concerns are handled in an acceptable timeframe? There are plenty of guides on starting up, not so many on what to do when a business fails to ensure legal, financial, etc. concerns are addressed.
There are only TWO situations when a business can fail, wrong people in the right place or right people in the wrong place… in case of an imminent failure you are supposed (ex)change the wrong one(s)! Whatever your decision is following things must not be missed to make most out of a seemingly bad situation…
1. Evaluate all the assets, tangible as well as intangible, that form the business and monetize them. (This includes customer-base, mind you!)
2. Find a buyer, there is always one believe me, who will offer the price that would match the value you have worked out.
3. Close all the books and complete the legal as well as financial formalities to exit it officially.
4. Prepare a document ‘Lessons Learned’ that will guide you for the rest of your life.
5. Weigh your options to choose a NEW Course of your life… to make NEW mistakes if required!
All the best and Way o go...!
In order to shut down business you need to make different steps & the most important is financially e.g all debts & creditors shall be finalized & close down all the books , check out with the business clients regarding their work . finally you shall close down the legal documents .
You ask "how", not when , nor where.
How , depends on country/state law, normally when you have eated asignificant part of capital and there is not expected incomes to recover financial capability, there is a legal procedure to stop pay debts, and continue working, arranging agreements for debt payment.
I you accountants dont see such posibility, ask from your lawyer to start the legal closing of activity, and he will say you step by step what shall be done, there is much involved, labor force is first, tax, insurance,light ,gas, phone, loans , etc, everything must be cut off, and your responsability clean