Not all startups succeed.

For those that don’t, there may come a time to shut it down.

Here are some key points to consider in shutting down a startup:

Before announcing the shutdown, collect all accounts receivable.

Sell any inventory left on hand.

Notify investors first so they are aware.

Notify employees and give them their last pay date.

Notify your customers of the transition to a new service or program.

Liquidate all assets.

Pay taxes and payroll withholding.

Pay off outstanding debt as much as possible.

File IRS forms related to employment tax.

Close the bank account.

Dispose of any remaining assets.

This may include patents, trademarks, and other intellectual property, as well as physical assets.

Finally, dissolve the legal entity.

The shutdown process can take some time as each of the steps above requires time to complete.

Consider these steps in shutting down a startup.

 

Thank you for joining us for the Startup Funding Espresso where we help startups and investors connect for funding.

Let’s go startup something today.
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Thank you for joining your host Hall T. Martin with the Startup Funding Espresso — your daily shot of startup funding and investing.
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Hall T Martin is the director of Investor Connect, which is a 501(c)(3) nonprofit dedicated to the education of investors for early-stage funding. All opinions expressed by Hall and podcast guests are solely their own opinions and do not reflect the opinion of Investor Connect. This podcast is for informational purposes only and should not be relied upon for the basis of investment decisions.