There are situations when it makes sense for a business owner to close a business. However, a business owner may not just “walk away” from the business. There are steps that need to be taken prior to dissolution of a business in New York State.
Tax Return Filing Obligations
All required income tax returns have been filed (and taxes paid).
Mark all final tax returns as “Final”
Marking a tax return final informs the tax authorities not to expect future tax returns. If this is not done the IRS and NYSDTF may send you tax notices [and assess penalties] for failing to file tax returns.
Did your business have Employees?
If your business had employees, you must deposit any federal and state tax deposits prior to filing final payroll tax returns. In New York State the final NYS-45 is due within 30 days of the date business ceased paying wages. Additionally, business owners should also contact the Department of Labor to update their unemployment insurance.
Did your business collect sales tax?
If your business has a sales tax certificate of authority to collect sales tax. A final sales tax return should be filed within 20 days of ceasing business operations. Once the final return is processed the sales tax account will be inactive and the certificate of authority no longer valid.
Dissolution of a New York State Domestic Corporation
File a Certificate of Dissolution to close a corporation registered in New York State. This form can only be filed after obtaining written consent from the tax department. Written consent to dissolve the corporation will be granted if the corporation has filed all its returns and paid all its taxes.
Dissolution of a New York State Domestic LLC
Complete and file Articles of Dissolution to close a Limited Liability Company formed in New York State. Written consent from the Tax Department is not required to dissolve a LLC.