Sometimes the temptation to walk away from a business is nearly overwhelming.
I know that I have had that feeling before, generally around income tax time. I have a fantasy that involves using a flame thrower to set fire to the piles of paper in my office and I then walk away laughing.
In reality, that would not be the end of the story. I would be pursued by many unhappy tax clients and likely CRA. Then there is insurance, in my case I have to keep my liability insurance for seven years after I close my business. I can buy a policy and that protects me from claims that arise after I am out of business. Would you need to do that?
If you have incorporated your business, then you have to continue filing corporate returns until you are able to legally dissolve the corporation. If you have employees you have to file T4’s right away if your business ceases operations. Also, how much severance would you need to pay? What else would you have to do? Do you have leases, or loan payments and bank accounts to close? How long to wrap up business once you stop taking new clients?
So think about it – if you just stop, what do you have to do? How long would you need to actually wrap everything up?
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