Considering canceling your business license? Here’s how to effectively get it done

This simply means you are going out of the business. This happens due to various reasons, sometimes the business you started just disappointed you by not growing and instead of causing some losses and even draining your own savings. In another case, a business may have achieved its targets and have no reason to continue running.

A pandemic like COVID-19 can be another reason for business closure as witnessed during the corona break-out season. Whatever the reason for business closure or even if it’s business retirement then you cannot just dissolve your business like that without canceling your business license. The federal law states that it is a requirement for any business person to cancel the business license or any other business permit like Employment Identification Number during any given business closure.

This way any amount that was deducted from your account to serve any given expenses will effectively be canceled as well. If you dissolve your business without informing the government that you are quitting, then the government will always believe that your business is operating where they will always expect you to pay tax as usual.

Giving up on something especially business is not easy, however, if you are wondering how to cancel business permits like a business license, then this article will take you through till the success of cancellation.

Gather all your business permits

This includes a business license, EIN number, and any other business document you acquired to run your business. The cancellation process will depend on your business/company’s structure.

Since the process involves reaching out to government-related agencies, you need to have these documents on the table including your own paperwork which may include the following.

Get a DBA business name

A ‘doing business as’ is a common requirement especially for Independent contractors or single-persons LLCs. This business requirement needs also to be canceled while quitting business or cutting the cord of a bleeding business. In other words, it is also known as a fictitious business name.

Get a seller’s permit of a seller

This is a document given to you permitting you to move goods from your own hands to the hands of the customers. This includes a wholesale license, sales tax ID number, or a resale license.

Employment Identification Number

This is a tax registration number that is always a mandatory document to run a business.

Get a Special license

This is a specific type of license that is given to you after an inspection. This is commonly found in food shops where the health department needs to inspect your business before its operation.

Figure out the government-related agencies

This is a step where you enter after gathering all the necessary papers or business permits that were previously given to you to operate a certain business.

It is a stage where you need to list down who to make a call to cancel your business licenses and permits. Since each permit is issued by a specific agent, like for the case of a food business you need to contact the health department to cancel your license. And for the case of closing a business with the IRS, then you will have to reach out to IRS itself to cancel your business permit.

So it is advisable that you sit down and take your time to go through your business records in order to figure out which agent issued you with a specific permit.

What if I am not sure of my business agent permit?

In such a case that you don’t know or remember who issued you with a license, then contact your state’s corporation department. They are the ones to guide you since they are a division of corporations, or they may be a secretary for your state’s office.

Cancel your license depending on the type of license

The process involves canceling the actual license or registration. This varies from one type of business to another. For the case of DBA business name, you may need to go to an extend of publishing a notice with a Newspaper citing that the business no longer exists. Here you will also need to consult your state of the registry to guide you.

The permit of a seller states

Lightly put, the fact that you simply contact the agency that provided you with the permit. This is where the agent returns the amount of deposit to you. However, you cannot use this deposit after you have closed the shop. In most states, it is an offense and might lead you to serious troubles.

For the case of Employment Identification Number just simply stop using it. This is because IRS cannot cancel EIN since it cannot be reassigned to another person. This simply means it is permanently and can only be canceled by stopping the use of it.

IRS cannot delete your EIN but can close your business account. According to the IRS website, you must send them a letter so that they can close your account. In your letter, state the reason why you are closing your business, complete the legal name of your business, EIN, and the business address. They will always ask you to attach a copy of your Assignment notice that you were issued when you first applied for EIN.

The above details can be sent via email through:

Internal Revenue Services,

Cincinnati, Ohio 45999.

Finally, you need to contact the city or county to give you a form that you will have to fill out to cancel your special license or tax registration (business license). Just remember that you will have to pay for the taxes for all the years your business was running, even if the business is already closed.