Deciding to close your Michigan business does not mean you simply shut your doors to consumers. Whether you are going out of business or simply want to sell your business, the most pressing requirements are the tax and license issues involved. Tangent issues include your employees' loss of jobs and health care benefits in a poor economy. According to the U.S. Small Business Administration, 660,900 businesses closed in 2009—an estimated annual turnover rate of 10 percent.
Things You'll Need
- Tax forms
- Business license
If you are closing out your business by selling it, complete and deliver the "Business Transferor's Notice to Transferee of Unemployment Tax Liability and Rate, form UIA 1027" to the new business owner two or more days before the transfer occurs. State law requires that the seller or his legal representative fill in this form to fully disclose to the buyer any unemployment tax liability that he may incur. The buyer acquires all unemployment tax liability, including fees and penalties.
The "Notice of Change or Discontinuance, Form 163" or a letter must be sent to the Michigan Department of Treasury, Registration Section, to advise that all business and associated accounts will be discontinued. Include all relevant account information.
Pay any delinquent taxes to the Michigan Department of Treasury. This includes any past tax, penalty and interest your business owes. You will know what specific taxes, because you will receive a letter of inquiry, notice of intent to assess and/or a final assessment bill for taxes due from the Michigan Department of Treasury.
Ask for a "Tax Clearance Certificate" once any outstanding tax liability has been paid in order to document that no tax liability will pass to the buyer of the business. If the owner is simply going out of business rather than selling, then the certificate is proof that the owner has paid all taxes and is cleared of any tax liability.