Closing a business can be a difficult and emotional thing to do. Even if you know it’s the right choice for you, you put a great deal of time and energy into starting your business. It’s natural to have mixed emotions and be unsure how to handle certain aspects of the closing.
One of the most important questions to ask is what to do with your business assets and belongings. Depending on what your business did, you may have a variety of items. You may need to keep some by law, while others you can store, donate, or sell. Here are some things that may help you through the process.
Documents to Keep
You need to retain many of the documents you acquired in the course of doing business for some period of time. Here’s a breakdown of the most important documents:
- Keep corporate records, including annual reports, bylaws, incorporation documents, insurance policies, and patents, permanently. (The exceptions are surety bonds and administrative records, which you must keep for three and ten years, respectively.)
- Keep personnel records for varying periods as follows:
- Accident reports, injury claims, and settlements for 30 years
- Keep employee insurance records for 11 years
- Employee attendance records for 7 years
- Employee contracts for 6 years
- Applications, terminations, and garnishments for 5 years
- Fidelity bonds for 3 years
- Job descriptions, time cards, and rating cards for 2 years
- Legal requirements for tax records vary:
- Keep annuity and deferred payment plans, depreciation schedules, inventory reports, dividend registers, tax bills, tax statements, tax returns (including sales tax returns), and pension returns permanently.
- Payroll tax returns for 7 years
- Employee withholding, excise exemption certificates, retail excise reports, and manufacturing excise reports for 4 years
- Retain financial records as follows:
- Keep general ledger, accounts payable ledger, balance sheets, and check register permanently
- Cash receipts, cost accounting records, accounts receivable invoices, ledgers, and dividend checks for between 5 and 7 years
- Bank statements, accounts payable invoices, canceled checks, payroll checks, earnings registers, expense reports, and labor cost records for between 2 and 3 years
It’s important to store documents in an environment where heat, humidity, and pests won’t damage them. Renting a dedicated, climate-controlled storage unit will ensure that your documents are safe.
What to Keep and What to Sell
Once you’ve taken care of your business documents, you may have other items that you need to sort through. Anything that you leased or rented must be returned, but that may still leave you with:
- Business machines, including computers, monitors, printers, copy machines, scanners, and phones
- Office supplies
Let’s take these items one at a time. Quality office furniture is quite expensive. Selling it can be a good way to pay off debts. Of course, you may want to keep your office furniture for the future. If you do, it’s important to store it properly. You can find some tips for storing wooden furniture here.
Office equipment and electronics may be sold or even donated. If you decide to sell or donate items, make sure to delete any personal information stored on them. You can find software to do it for you or donate them to a company that uses Department of Defense standards to destroy electronic documents. Storing electronics requires protection from the elements. Many of our storage units at Storage West are air conditioned and provide a safe place to store your electronics and machines.
Finally, let’s talk about office supplies. Paper, pens, and other office items don’t have much value as items to be sold. However, they may be useful if you decide to start another business in the future or if you have kids who need school supplies. It may be helpful to sort through them, use any items that you can, and store the rest for a future date.
Closing a business can be stressful but knowing what to keep and what to sell or donate can help make the transition a smooth one.
To learn about Storage West’s storage services for businesses, please click here.