After selling your remaining assets, collecting your outstanding receivables, repaying creditors, and paying your final federal, state, and local taxes, you might have a pool of proceeds that’ll need to be distributed before closing your bank accounts.
What you should do with those proceeds will depend on the structure of your business.
Here are some guidelines for dividing what’s left:
Sole business owner
If you are the sole owner of your business, you can claim any proceeds that remain.
LLCs and partnerships
If your business has multiple owners, each partner should receive an amount that’s in proportion to the share of ownership.
If your business is a corporation, excess cash should be repaid to your shareholders according to the terms of your bylaws or organizing documents.
|Remember to report all distributions to the IRS. You may have already reported your distribution on your final tax forms. If not, your accountant or tax advisor can walk you through the steps you need to take to complete this requirement.|
Need help finding an accountant? Take a look at these business-friendly firms:
This resource is also a great primer:
What should I do with my share?
Consider speaking with a wealth advisor who can help you to invest any funds that you receive from the closure of your business.
Interested in connecting with a wealth advisor? Check out these firms:
After working through the asset distribution portion of closing your business, you can take on the final step: setting up a recordkeeping system. Read our guide, Recordkeeping after Closing Your Business, to learn why and how you’ll need to store key business documents.
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