Steps to follow

• Make sure you tell all the relevant people. The bigger a business you have, the more people you will have to inform before you close.
• If you are a company or limited liability partnership, you will have to inform Companies House.
• You will have to close accounts with suppliers and customers, and inform creditors that you are closing down.
• Perhaps most importantly, you will have to give your employees adequate notice of their impending redundancy and termination of pension payments. You will need to make statutory redundancy payments, and be fair and reasonable in your redundancy selection process.
• You may need to hire professional advisers such as solicitors, accountants and valuers to help you dispose of assets and minimise your tax liability.
• You need to calculate final pay, and inform HM Revenue and Customs that your business is closing.
• If you employ more than 50 staff, offer an occupation pension or pay into employee’s private pensions then you have a duty to inform and consult with employees about the changes to their pensions.

What to watch out for

Give employees plenty of advance warning about impending redundancies. Consult with employees individually, as well as their representatives if any, for example, unions. If you fail to consult with employees, their dismissal will be unfair. If you have more than 20 employees then you will need to notify BIS, and you must consult with employees at least 30 days before the first redundancy.

Solicitor’s top tip

Put together a formal plan and timetable to help you through the process of closing down. Your original business plan may prove useful here to help make sure you include everything. You will need to meet all your tax requirements, inform employees, end rentals and leases, close accounts and sell off your assets, including your premises.

Useful links

Free advice

www.businesslink.gov.uk
www.hmrc.gov.uk
www.cipd.co.uk
www.companieshouse.gov.uk
www.fsb.org.uk
www.businesslink.gov.uk

Useful articles

Overview of winding up a business
Buying or selling a business
Buying or selling business premises
Company filing requirements
Making staff redundant
Terminating franchise agreements
Termination of employment contracts