A business may cease operations for many reasons and in a number of ways. When a business is terminated or its legal status changes, there are licensing and regulation requirements that must be met. There are also opportunities for improving the economic prospects at termination for owners and creditors through legal provisions of state and federal laws.
Essentially, following the same process of contact with all registration, taxing and licensing agencies (simply retracing the steps taken during start-up) will guide one through necessary termination procedures. The table below outlines some general requirements.
Bankruptcy is a very complicated process and should be conducted only under the careful supervision of competent legal counsel. It is suggested that you contact an attorney for assistance with bankruptcy matters.
| Agency/Authority | Necessary Steps |
|---|---|
| Department of Commerce | |
| Licensing | 1. Let license lapse at renewal, OR |
| 2. Request that your license be suspended. | |
| Corporation, Limited Liability Company, or Limited Partnership Dissolution/Cancellation | 1. File Articles of Dissolution, Certificate of Withdrawal, or Certificate of Cancellation. |
| Name Utilization | 1. A registered DBA name remains reserved for a period of 3 years, and may be canceled at any time. |
| Utah State Tax Commission | |
| Sales and Use Tax | 1. Notify the Tax Commission in writing and return your sales tax license for cancellation. |
| 2. File your final sales tax return within 30 days after the date the business is sold or closed. | |
| Withholding Tax | 1. Notify the Tax Commission in writing. |
| 2. File your final withholding tax return. | |
| 3. File your final annual reconciliation on or before February 28th. | |
| Corporate Franchise Tax | 1. Contact the Department of Commerce to dissolve or withdraw your corporation. |
| 2. File form TC-2001, Application for Tax Clearance, with the Tax Commission. Contact the Tax Commission to receive a customized tax clearance application for your corporation. See also Business Tax Letters and Tax Clearance Certificates. | |
| 3. File a final corporate tax return. The final return may not be consolidated in a unitary return. Your final return should be marked "FINAL" and must be submitted, plus any taxes, penalties, and interest paid, before the last day covered by the return's fiscal period or a return for the next fiscal period will also be required. For example, if you file on a calendar year and your 2007 return will be your final return, it must be submitted and paid before December 31, 2007 or you will need to also file a 2008 return. | |
| Department of Workforce Services | |
| Employer Quarterly Contribution Report (Form 3) | 1. Request quarterly report (form 3) for final filing. |
| 2. File report stating the termination date of employees and that the report is final. | |
| 3. Pay unemployment contributions due. | |
| 4. Notify department if there is a successor who is taking over the business. | |
| Internal Revenue Service (IRS) | |
| Federal Income Tax | 1. Request appropriate form to file for short tax year. |
| 2. Indicate final return on the form. | |
| 3. Expect similar requirements and assistance as with state income tax. | |
| Employees Withholding Taxes (941) and Unemployment Taxes (940) | 1. Requirements are similar to requirements with Department of Workforce Service. |
| 2. Write final on form or check the box marked final on the tax form. | |
| Corporate Dissolution | 1. Must file form 966 within 30 days after the adoption of a resolution or plan to dissolve. Form 1099-DIV should also be filed reporting liquidated distributions to shareholders. |
