Being a business owner is part of the American Dream for many New York residents. However, it also comes with significant responsibilities and a lot of hard work. Officially closing a business is not as easy as it sounds, regardless of the closure reasons. We often assist clients who wish to dissolve their company.
According to the New York State Department of Taxation and Finance, corporations must pay income franchise and other taxes and fees due before formally closing an organization. You must also take additional steps to complete the process.
Follow business articles and state law
The articles of incorporation may include a clause that requires a majority or two-thirds vote before you can dissolve the company. You must also file dissolution documents with the state, certifying the termination of the business. By taking this step, you notify creditors that the organization cannot incur additional debt.
Collect monies owed and settle creditor claims
If customers owe the company money, try to collect this money as soon as possible, as it becomes harder to so when the organization no longer exists. Inform creditors that you intend or have already dissolved the company. Provide a mailing address and deadline for the submission of claims. Pay valid claims in full or negotiate a settlement.
Closing your business correctly can take time as it includes a broad range of essential tasks, such as informing stakeholders, selling and distributing assets and canceling the business licenses. However, it can also help minimize liability and allow you to move forward with the rest of your life.