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8 Steps for Closing an Internet Business

We’ve talked about setting up an Internet business – but not about closing one down. So let’s see what some of the basic steps are should you decide to close an Internet business. If you have been working with only one website, you will have more to do than if you have several websites that are using or sharing the same support services, i.e., payment/credit card, website hosting, domain registration, etc.

The following steps would primarily be used to close down a single domain website (business).   Again, if you are using some of the services for other businesses, you would want to leave those accounts open and active.

1. Domain Registration – Check the domain account settings with the registrar to be sure it is not scheduled to ‘auto renew’. You do not want to pay for a domain you don’t want – unless you plan on using that same name again at a future time. In that case, you may want to leave it on ‘auto-renew’ or put it on ‘manual’. Having a domain registration on ‘manual’ gives you the opportunity to make decisions based on  current situations.

2.   Hosting   If you have separate, stand-alone hosting for your website, you need to cancel this service …. ( only IF you do not have multiple domains hosted under the same IP address or account ). Before canceling , we recommend downloading and keeping a complete copy of the website for possible future need.

3. Online payment services, i.e, PayPal can also be closed – if they are a one use account. But before canceling, any monies in the account should be requested via check or bank transfer. If you have your own credit card service, you will also need to cancel that service as well – unless it is being used for other businesses.

4.  Bank Accounts –  The business bank account should be closed . . . again, unless you are using it for other on-going business ventures. And, if you are waiting on transfers from online payment services like PayPal or affiliate payments, the account should be left active until all receipts have been posted and all out going checks have cleared. If you must close the account immediately for some reason, the original payment method selected of ‘bank transfer’ should be changed to an alternate method, ie., check, debit card, etc.   Note:  Any credit or debit cards associated with the business account should also be terminated at the same time the bank account is closed.

5.  Miscellaneous Services – Any other on-going services associated with the website should also be terminated. This might be advertising, web design service/maintenance, SEO work, etc.  Note:   When closing an account, make sure there are no outstanding balances and request email or written confirmation that the account has been closed on the specified day with no monies due. This is good advice to follow for closing any account.

6. Email – If you have any business email addresses associated with the .com (info@yourdomain.com), you may want to advise clients, associates, etc. that the email address they have been using will no longer be active and provide an alternate generic email address (Google, Yahoo) to use should they need to contact you.

7.   Taxes – If you have your business registered with your state taxing authority, you will need to advise them that the business has been closed . Should you have more than one business associated with your tax number, in most cases, the state will still need to know if one of the business locations has been shut down.

8.  Files –  Reconcile all accounts associated with the business and then compile all tax records and have them ready for filing sales tax and income tax.  These files – and any other pertinent data associated with the business –  should  be stored in a labeled box for future reference should they be needed.

In all cases, check the ‘fine print’ with regard to canceling services to avoid any penalties or additional fees.

Surprisingly, closing a business can be more labor intensive than starting one up. The main thing to remember is to keep good, accurate records of your actions . . .  date, time, phone numbers, person you spoke to, copies of email confirmations, etc. as you go through the process.

These steps are intended to be a brief overview of what is associated with closing an online-only business. It is not intended to be exact, nor complete, as every business venture is different. However, we hope that it gives you some things to think about. When in doubt, any concerns or questions regarding the closure of a business should be discussed with your CPA or the proper authorities.

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