Opening a business is probably one of the most exciting times in anyone’s life. We all want to succeed, but sometimes things just don’t work out. Whether you’ve made your millions and are gearing up for retirement or simply want to cut the cord on a company that’s bleeding cash, you can’t dissolve a business without canceling a business license. Canceling licenses, permits and other business registrations like an EIN number is a requirement by law. Plus, do you really want the headache of the government believing you’re operating a business you aren’t actually operating?
If you’re thinking about how to cancel a business license and worrying about the headache that awaits – fear not. Going out of business is never easy, but fortunately, putting an end to the paperwork is.
How to cancel a business license varies from state to state, so make sure you contact the proper local and federal agencies.
The first step is to figure out what sort of permits or licenses your business actually has. You might find yourself asking, “how do I cancel my EIN number?” or, “how do I close a business license?” depending on the way your company is structured. Since you need to contact each related government agency, it’s best to have it all laid out on the table. Your paperwork might include:
- A fictitious business name. This is known as a DBA or “doing business as” and is common among independent contractors or single-person LLCs.
- A seller’s permit. This is your wholesale license, sales tax ID number or resale license and lets you move products from your hands to customers.
- A tax registration number (like an EIN) or a business registration license
- Business-specific permits like a food preparation permit that would be doled out by the Department of Health.
Now that you’ve got all your various licenses and permits laid out on the table, you need to figure out who to actually contact to cancel your permits. In cases like a food preparation permit, you’ll need to contact the Department of Health. In cases like closing your business to the IRS, you’ll have to contact the IRS. The question “How do I close a business license?” might not always be so cut and dry, so you’ll need to look back in your records and find who issued you the permit in the first place. Each permit or license should have been issued by a specific agency.
If you don’t know who issued a permit or license, contact your state’s corporations department. Often times this is the Division of Corporations or the Secretary of State’s office. They should be able to guide you.
How to cancel a business registration or license varies between each different one you’re using:
For a fictitious business name or DBA, you might have to publish a notice of abandonment in a newspaper that says the business is no longer operating. Make sure you check with your state to see what’s required.
For a seller’s permit or resale license simply ask the agency who provided it. They may return your deposit when you hand your permit in – and don’t be tempted to use it after you’ve closed shop. This is illegal in most states.
For a business license or tax registration, contact the city or county, which will give you a form to fill out.
If you’re wondering how do I cancel my EIN number, don’t. You may want to get rid of your EIN along with your business license if you’re no longer using it, but this is entirely unnecessary. An EIN is permanent and the IRS does not cancel them since they’re never reused or reassigned. Simply stop using an EIN if you don’t need it.
While the IRS can’t delete your EIN, they can close your business account. To close your business account, according to the IRS’ website, you must send them “a letter that includes the complete legal name of the entity, the EIN, the business address and the reason you wish to close your account.” They also suggest sending a copy of the EIN Assignment Notice that’s issued when you first receive your number. This letter can be mailed to:
Internal Revenue Service
Cincinnati, Ohio, 45999
Even if you close your account, you still must pay taxes for any year you were in operation.