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Old 11-03-2013, 02:06 PM
 
517 posts, read 1,529,329 times
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Hi, I'm looking for some info on ending a business venture tidily and cheaply.

To cut the story short my wife and I set up a company name and got licenses to resell in two Arizona cities. Unfortunately it wasn't to be, and due to illness and now relocation we've decided it's best to end it before it began.

Should I dissolve the company somehow, to avoid the cities sending tax forms and demanding license renewals? Or could I just inform the cities the company is dormant? If it is best to end the LLC is that something I could do myself, or am I better contacting an accountant?

Any advice is appreciated.
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Old 11-03-2013, 05:43 PM
 
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When the renewals come up, write out of business on the form and send it back. Close the corporation with the state also
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Old 11-04-2013, 08:41 PM
 
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Do not dissolve the company immediately, whatever you do. It is practically giving the IRS an engraved invitation to audit your books. My FIL endured the equivalent of a full body cavity search because he just shut down his company. My accountant tells me it's a very common red flag.

Instead, simply file tax returns every year with zero sales and zero expenses for seven years, which is how long a business is required to keep records. Once seven years have elapsed, only then do you close it.

Also, shred all records that are more than seven years old.
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Old 11-05-2013, 06:34 AM
 
517 posts, read 1,529,329 times
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Quote:
Originally Posted by cpg35223 View Post
Do not dissolve the company immediately, whatever you do. It is practically giving the IRS an engraved invitation to audit your books. My FIL endured the equivalent of a full body cavity search because he just shut down his company. My accountant tells me it's a very common red flag.

Instead, simply file tax returns every year with zero sales and zero expenses for seven years, which is how long a business is required to keep records. Once seven years have elapsed, only then do you close it.

Also, shred all records that are more than seven years old.
But will we be chased for city licenses if we don't close the company? The company has zero business by the way, so there are no books as such (just zero city tax returns). I thought maybe the city required some proof the company was inactive or closed?
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Old 11-05-2013, 08:12 AM
 
28,904 posts, read 48,376,033 times
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Quote:
Originally Posted by Guitarmaan View Post
But will we be chased for city licenses if we don't close the company? The company has zero business by the way, so there are no books as such (just zero city tax returns). I thought maybe the city required some proof the company was inactive or closed?
Well, if you aren't actively doing business, then you don't need a business license in most cities. My suggestions were simply to help you get around the IRS's red flags, thereby avoiding audits.
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