Closing a Business: The Complete Step-by-Step Guide

01Make the decision official

Owners need to approve the closure the way your governing documents require. For an LLC that's usually a member vote or written consent under the operating agreement. For a corporation it's a board resolution followed by a shareholder vote. Put it in writing and keep it with your records.

02Take inventory of every asset

List everything the business owns before you start selling or cancelling. Most owners remember the obvious items and miss the rest.

• Equipment, vehicles, inventory and furniture
• Accounts receivable and deposits you can recover
• Domain names, websites, phone numbers and social accounts
• Trademarks, software, content and other intellectual property
• Customer lists, where your privacy policy allows a transfer
• Operating data: chat, email, CRM, tickets and call recordings

See what to do with assets when closing a business for how to sell or distribute each one.

03Export your data before anything shuts off

Before you cancel any software, export the full history from each system and store it somewhere you control. Then check what it's worth.

Export guides: Slack, Gmail, Outlook, Salesforce, HubSpot, QuickBooks.

04Tell employees and run final payroll

Give employees as much notice as you can. Larger employers may owe advance notice under the federal WARN Act or a state version of it. Final paychecks often have state deadlines, sometimes the last day of work, so check your state's rule. Pay out accrued vacation where state law requires it, send COBRA notices if you offered group health coverage, and file final payroll returns and W-2s.

05Notify customers, vendors and creditors

Tell customers when service ends and how open orders, refunds and warranties will be handled. Let vendors know so they stop shipping and send final invoices. Notify creditors in writing. Many states have a formal process that sets a deadline for creditors to submit claims, which limits surprises later.

06Sell or license what still has value

Turn assets into cash before you pay out owners. Equipment and inventory can go to liquidators or direct buyers. Domains and IP can sell on their own. Operating data can be licensed to an AI data buyer, often without giving up ownership.

07Pay debts and settle obligations

Pay creditors, taxes and wages before anything goes to owners. End or assign leases, settle loans and close out any personal guarantees you signed. If the business can't cover its debts, talk to a lawyer before distributing anything, since paying owners first can create personal liability.

08File dissolution with your state

File articles of dissolution (sometimes called a certificate of dissolution or cancellation) with the Secretary of State in every state where you formed or registered the business. Some states require a tax clearance first. Until you file, the state may keep charging annual fees and franchise taxes.

Details by entity: how to dissolve an LLC and how to dissolve a corporation.

09File final tax returns

File a final federal return for the year you close and check the box marking it final. File final payroll tax returns, final sales tax returns and any state returns. If you sold assets, report the sale. The IRS doesn't cancel an EIN, but it will close the business account if you send a letter after your final returns are filed.

10Cancel licenses, accounts and subscriptions

Cancel business licenses, permits and DBA filings. Close merchant accounts and business credit cards. Cancel software last, after every export is done and saved. Close the bank account only after the final checks clear and refunds are paid.

11Keep the records you're required to keep

Keep tax records for at least three years after filing, longer for employment taxes and asset records. Many advisors suggest seven years for most business records. Keep the closure documents themselves permanently.

Your data exports count here too. Kept records can still be licensed later, while deleted ones can't.