[doug49]

I own a sub-s corp. We are failing miserably. We owe suppliers @ $300,000 and owe nothing else. How can I close my company and take a job with another company in my same business?

[Just Looking]

I am in the process of helping a Sub-S Corp dissolve. They are fairly large (over $100 million in sales per year) and their process will take a couple of years. You don't mention the size or type of your business, so I am going to give you some things to think about. This list is not meant to be all-inclusive, but is a starting point:

You should consult your attorney, to start. You attorney can advise you best on how to deal with the debt, whether it be to file bankruptcy or contact the claimants to see if you can make a deal to settle. Be very sure to keep your Sub-S status by not mixing the business and personal assets in your life. Do not make preferential payments to certain creditors, friends, relatives, or yourself. Your attorney can advise you best on this.

As a Sub-S Corp, you are required to maintain minutes as long as the business is open, whether it is operational. The decision to close the business should be part of the minutes.

Do you have existing contracts? Are you able to fulfill those contracts? If not, talk to the companies and see if you can terminate the contract without penalty. If you have any outstanding Accounts Receivable, collect them prior to notifying anyone you are going out of business.

Do you have employees? Different states have different rules about notification. Contact your state employment agencies or your attorney to find out what needs to be done. You will have to file final employment reports to all local, state and federal agencies, just as you did while in business. Be sure to indicate they are final reports at the time you file your last one. These reports usually must be filed within a certain time after the employees are terminated or after close of business, including your annual reports such as W-2’s. Do not wait until the end of the year as there are penalties involved.

Look at any report you typically file and call that agency to find out what you need to do. This can include, but is not limited to, sales tax, corporate filings for the state such as Annual List of Officers, any licenses, and all income tax returns (local, state, Federal).

You will eventually have to cancel your insurance, and sell any assets and/or inventory (find out your state requirements regarding sales tax - rules are different if you are selling all or a substantial portion of your business assets).

Notify all suppliers that you are going out of business and closing your accounts. If you had employees, be sure to state that you won’t be responsible for any further purchases by the employees. Cancel any credit cards in the business name.

Do this all as professionally as possible. Don't burn any bridges. Make sure people have future contact information - employees, customers, creditors, banks, etc. Be sure to keep your dissolution paperwork in order. All that will help in protecting your name and reputation, and in getting future employment in the same field.