What are the steps for closing a San Diego business?  Are you thinking of closing your company and searching for ideas and recommendations for efficiently ending your business and eliminating future liability?  When the time comes to close your business there are many steps which must be completed to properly dissolve your business entity.  We’ve outlined a few of the most significant ones here.

It is important to note the company may need to go through the “revivor process” and be in good standing with the State of California before it is possible to dissolve the company or close the business. We must revive the business if the company is suspended by the State of California or forfeited for failing to file its annual statement or maintaining a registered agent, the agent of the corporation resigns and/or the corporation has failed to pay its annual California franchise tax, it fails to file a California state tax return or if the company stops conducting business in the State of California but fails to file a “Certificate of Surrender of Right to Transact Intrastate Business.”

Properly File Dissolution Documents

Depending on your type of business, there are forms that must be submitted to the government pertaining to your LLC or corporate dissolution. If you fail to do this, you expose yourself to significant liability for additional taxes and filings. Keep in mind that a sole proprietorship may not have to file papers in certain states, however, you should consult your Watkins Firm attorney who has more than 40 years of experience as a business attorney in San Diego to be sure.

Part of dissolving your LLC or company and efficiently ending your business will be canceling any applicable licenses or permits that your business has pursued, but will no longer be needing. In addition, you should be sure to cancel your business name registration with your local government.

Abide By Employment and Labor Laws

Efficiently ending your business means complying with all federal, state and local laws and regulatory requirements.  For example, the Worker Adjustment and Retraining Notification (WARN) Act was created to protect employees and their families by establishing certain standards for companies to follow when dissolving.  The U.S. Department of Labor Employment and Training Administration specifies who is subject to WARN standards:

In general, employers are covered by WARN if they have 100 or more employees, not counting employees who have worked less than 6 months in the last 12 months or those who work an average of less than 20 hours a week. Private, for-profit employers and private, nonprofit employers are covered, as are public and quasi-public entities which operate in a commercial context and are separately organized from the regular government. Regular Federal, State, and local government entities which provide public services are not covered.

In some states, even companies with less than 100 employees may also be subjected to WARN standards, so check with your local government or an attorney to find out.

Finalize Your Financials When Closing a San Diego Business

This one is pretty easy to wrap your head around, but often gets overlooked: one must file the final tax return, pay all taxes, settle all debts, complete payroll, and don’t forget to close all business accounts (credit cards, bank accounts, etc). Failing to do so can create unnecessary headaches down the road.

This includes the filing of any delinquent tax returns as well as the payment of any taxes due including fees, penalties and interest. The Watkins Firm will help to ensure that any potential supplier, customer, employee and/or creditor is notified about your intention to close the company.  You must close all bank accounts, credit cards, permits and licenses and any other account associated with the company.  Usually we will publish a legal notice or statement in the newspaper regarding the closing of a San Diego business.

You will need experienced, proven San Diego business dissolution attorneys to help craft a strategy for efficiently closing a San Diego business while protecting you from future liability.  The Watkins Firm can protect you from legal entanglements and expensive fines and penalties which may result from missed steps or mishandled processes. If you are exploring the options of dissolving your business, let our experienced team advise you during the dissolution to keep it as smooth and simple as possible.

We invite you to review our podcast as well as the strong recommendations of our clients and contact the Watkins Firm or call 858-535-1511 for a complimentary consultation today.