Closure of Sole Proprietorship Firm

Overview

Proprietorship concern is the easiest form of business to close as it is not governed by any statute so there is no specific process for closure . However, owner still required to settle accounts, including the liabilities and outstanding credit generated by the business and must cancel the licenses like Trade license ,Shop Establishment certificate , GST Registration and other business registrations to close the business officially

Points to be considered for Closure of Sole Proprietorship

• Sole proprietor is required to inform his employees about closure of his business so that they can search work for themselves.
• Inform vendor and customers of business about closure so that they can settle their accounts.
• Terminate all agreement with vendors and with clients entered by the business and this will maintain goodwill and reputation of sole proprietor in the market.
• Close current account with bank and terminate all other banking facilities availing in the name of business so it cannot be misused in future.
• Pay all statutory dues of the business.
• Pay off all the liabilities of the business.
• Make an application to the concerned authority for the purpose of cancellation of shop and establishment license so that no false allegations can be filed in future.
• If the Sole proprietor has obtained GST identification number than he is required to surrender his GST it can be done through the official website of the GST.