Closing your business isn't necessarily an option that's forced upon you by poor trading conditions or financial difficulties. It may suit both you and your business to close it when you decide to exit.
There are a number of circumstances where planning the closure of your business will be the most practical option. For example:
- your business may be too dependent on your particular skills to make a sale realistic
- family members may be uninterested in taking charge
- unfavourable economic climate
- ill health may force you to retire before you have had a chance to develop the business sufficiently to make an alternative exit viable
It's important to seek professional advice about your options in such circumstances from your solicitor, accountant or financial adviser.
The way you close your business will depend on the legal structure you have chosen for it. See legal structures for businesses - an overview.
Sole traders may simply be able to close the business and pay off any outstanding liabilities, especially if there are no employees involved. VAT registration, employees, PAYE (Pay As You Earn), tax and National Insurance obligations, premises and finance agreements can all make this process more complicated for anything other than the most simple business. See selling or closing your business.