Consider your exit strategy when starting up

Exit option: close your business

Closing your business isn't necessarily an option that's forced upon you by poor trading conditions or financial difficulties. It may suit both you and your business to close it when you decide to exit.

There are a number of circumstances where planning the closure of your business will be the most practical option. For example:

• your business may be too dependent on your particular skills to make a sale realistic
• family members may be uninterested in taking charge
• unfavourable economic climate
• ill health may force you to retire before you have had a chance to develop the business sufficiently to make an alternative exit viable

It's important to seek professional advice about your options in such circumstances from your solicitor, accountant or financial adviser. See our guides on how to choose and manage an accountant and how to choose and manage a solicitor.

The way you close your business will depend on the legal structure you have chosen for it. See the page in this guide on the decisions that could affect your eventual exit.

Sole traders may simply be able to close the business and pay off any outstanding liabilities, especially if there are no employees involved. VAT registration, employees, PAYE (Pay As You Earn), tax and National Insurance obligations, premises and finance agreements can all make this process more complicated for anything other than the most simple business. See our guide on selling or closing your business - a tax overview.

For help and information on your specific circumstances, use our interactive tool to investigate the tax and legal issues when selling or closing your business.

Subjects covered in this guide

• Introduction
• Why you need an exit strategy
• What do you want from your business?
• Decisions that could affect your eventual exit
• Exit option: family succession
• Exit option: selling your business
• Exit option: float your business
• Exit option: close your business
• The exit process
• Here's how I planned an exit strategy

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