For business owners, closing a business in not really a preferable choice but there are situations when it can’t be avoided. Shutting down a business is hard for every business owner no matter how long or short the time their business was operational. Closing a business requires much preparation just like when opening it. If it is inevitable but you’re confused on which step to take first, here’s a simple guide to help you through a smooth closing for your business.

Assess Finances

Business assets are very important even when you’re already closing your business. You should identify the assets that needs to be sold before you close in order to get back what you invested on those assets. However, you should remember that sometimes you need to sell these at a discounted price. Aside from that, you should also settle all outstanding debts and bills to clear your record.

Notify Employees, Suppliers and Customers

Everyone involved in your business should also be informed about your closing. First, you should inform the employees as early as possible to help them through this big change in their work life. You should also provide final payment to them and be sure to meet the Fair Work Act to avoid legal issues.

You should also inform your suppliers and settle all your accounts with them before closing. It is easy to notify customers since you can put out signs or announcements on your website. You can even hold a closing down sale to sell off as much stocks possible.

Terminate Lease Agreements

If you’re renting a space for your business, you should end the lease when you close your shop. Each lease has different conditions. Understand it fully to know how to end that lease you have.

Finalize Tax and Legal Obligations

Before closing your business, you need to finalize all outstanding tax payments you need to meet and cancel tax registrations such as PAYG, GST, FTC, luxury car tax and wine equalization tax. You’ll have 21 days to cancel all of these registrations. You also need to cancel ABN, licenses, permits, and even insurance policies that you get for your business. It may sound much but it is not that complicated when you take it one step at a time.

Sort the Records That Needs to Be Kept

One of the important things you should remember when handling a business is to keep essential records. Even when you’re already closing, you should still keep the important records such as financial, employee and customer records. You can use this as a future reference or even as a record when issues arise after you’ve closed the business. It is recommended that you keep these records for at least 5 years.

There are plenty of things you have to settle before you can close a business fully. Just take your time and do all these steps one by one for a smooth closing of your business free from any legal issues.