Yet to embark on the next project, you’ll want to properly close the books on your previous company. There are legal and financial ramifications at stake: Without formally closing a business, you can still be charged fees and required to submit tax returns to the IRS (including an annual report to the state).

Additionally, closing a business the ‘right way’ ensures the network, reputation, goodwill and momentum you’ve built with the first company can be gracefully transitioned to future projects.

Here’s the seven-step process to formally close your business:

1. Dissolve Your LLC or Corporation

An LLC or Corporation can be dissolved as easily as it’s created. Essentially, you’ll need to file a form called “Articles of Dissolution” or “Certificate of Termination” with the Secretary of State’s office in the state where your LLC/Corp was formed.

If you’ve been operating as a Corp, LLC, or Partnership, all business associates need to vote on closing the business. This final vote should be recorded in the meeting minutes. If shares were issued in a Corporation, two-thirds of the voting shares must agree on the dissolution. If no shares were issued, the Board of Directors must approve to dissolve the company.

If you’ve been operating as an LLC, review the dissolution requirements in your state’s LLCA (Limited Liability Company Act). Every state statute has a different set of provisions, so be sure to follow your particular statute to the letter. Otherwise, members of the LLC can be held liable for debts of the company after it’s been dissolved.

2. Pay Off Debts and Get in Good Standing

Any outstanding company debts must be paid. In most states, an LLC or Corporation must settle its debts before any distributions can be made to members. If your business doesn’t have enough money to pay off all loans and debts, you should consult an attorney — it’s possible that members could be held personally liable for those debts after the business is dissolved.

3. Close Federal and State Tax Accounts

Notify the IRS that your business is no longer operating by shutting down the Employer Identification Number (EIN). You’ll also need to file your final federal and state tax returns (check the box indicating that this will be the final return). If applicable, your company’s payroll withholding taxes must be up-to-date (members can be held personally liable if payroll taxes aren’t paid).

4. Return Cash Reserves to Owners

After debts have been paid, the remaining assets and cash reserves should be distributed to the owners/members in proportion to ownership interest. Again, no assets can be distributed until all debts have been settled.

5. Cancel Any Permits and Licenses

Contact the county where your business is located and cancel your business license, as well as any other permits you hold. Don’t just let this expire, because you could still be assessed fees and taxes even though your business is no longer in operation. If you have a seller’s permit, cancel that as well. And if you have been using a fictitious business name, you’ll need to file an abandonment form. There’s no reason to hold on to any of this, and you don’t want to be liable if someone else accidentally or intentionally uses your seller’s permit or other license.

6. Notify Any Vendors, Contractors, and Clients

If you’re closing a business, it is likely that you don’t have any active clients or you’ve already made preparations for stopping work. You should also take the time to notify any contractors, freelancers, vendors and suppliers whom you have done business with — don’t just leave them wondering as your business tapers down to zero. By being upfront with and considerate of your contractors and suppliers, they’ll be more likely to help you on your next venture. Your strength as an entrepreneur and business leader depends heavily on the caliber of your network.

7. Close Just Like You Opened

Take the whole process of closing your business just as seriously as you did opening it. Your credit and reputation are at stake. If you know you’ve moved on from a business, start the dissolution process as soon as possible. There’s simply no reason to pay an extra cent in fees and paperwork toward a business you know you’re retiring. Put all that effort to your next project!

This year, the IRS wants to remind taxpayers to use a preparer who will sign the returns they prepare and enter their required Preparer Tax Identification Number (PTIN).

Here are ten tips to keep in mind when choosing a tax return preparer:

1. Check the preparer’s qualifications. New regulations require all paid tax return preparers to have a Preparer Tax Identification Number. In addition to making sure they have a PTIN, ask if the preparer is affiliated with a professional organization and attends continuing education classes. The IRS is also phasing in a new test requirement to make sure those who are not an enrolled agent, CPA, or attorney have met minimal competency requirements. Those subject to the test will become a Registered Tax Return Preparer once they pass it.
   
   
2. Check on the preparer’s history. Check to see if the preparer has a questionable history with the Better Business Bureau and check for any disciplinary actions and licensure status through the state boards of accountancy for certified public accountants; the state bar associations for attorneys; and the IRS Office of Enrollment for enrolled agents.
   
   
3. Ask about their service fees. Avoid preparers who base their fee on a percentage of your refund or those who claim they can obtain larger refunds than other preparers. Also, always make sure any refund due is sent to you or deposited into an account in your name. Under no circumstances should all or part of your refund be directly deposited into a preparer’s bank account.
   
   
4. Ask if they offer electronic filing. Any paid preparer who prepares and files more than 10 returns for clients must file the returns electronically, unless the client opts to file a paper return.  More than 1 billion individual tax returns have been safely and securely processed since the debut of electronic filing in 1990.  Make sure your preparer offers IRS e-file.
   
   
5. Make sure the tax preparer is accessible.  Make sure you will be able to contact the tax preparer after the return has been filed, even after the April due date, in case questions arise.
   
   
6. Provide all records and receipts needed to prepare your return. Reputable preparers will request to see your records and receipts and will ask you multiple questions to determine your total income and your qualifications for expenses, deductions and other items. Do not use a preparer who is willing to electronically file your return before you receive your Form W-2 using your last pay stub. This is against IRS e-file rules.
   
   
7. Never sign a blank return. Avoid tax preparers that ask you to sign a blank tax form.
   
   
8. Review the entire return before signing it.  Before you sign your tax return, review it and ask questions. Make sure you understand everything and are comfortable with the accuracy of the return before you sign it.
   
   
9. Make sure the preparer signs the form and includes their PTIN.  A paid preparer must sign the return and include their PTIN as required by law. Although the preparer signs the return, you are responsible for the accuracy of every item on your return.  The preparer must also give you a copy of the return.
   
   
10. Report abusive tax preparers to the IRS. You can report abusive tax preparers and suspected tax fraud to the IRS on Form 14157, Complaint: Tax Return Preparer. Download Form 14157 from www.irs.gov or order by mail at 800-TAX-FORM (800-829-3676).

The Postal Service has little choice. Congress has the ultimately control and there isn’t enough money to keep up with the cost of service delivery. Unfortunately, that doesn’t help you and your business. The elimination of next-day first-class delivery alone will slow customer collections enough to cost a typical large U.S. company up to $100 million a year.

The impact on a small company won’t be anywhere near as large, but it could still hurt. And if there’s post office near a client, sending invoices or receiving payments could become even more difficult.

If you rely on traditional mail for your business, here are some steps you can take to help avoid an impact to your cash flow:

• Invoice faster — Many companies are sloppy when it comes to sending invoices for work completed. Avoiding paperwork is no longer an affordable luxury. Invoice immediately to reduce to a minimum any delays in customers getting your invoices and you receiving their checks.
• Offer incentives for early payment — Providing a slight discount for quick payment is an old practice. Make use of it and ensure that your customers realize it exists. But first determine what kind of delays you’re facing and be sure any discount you offer doesn’t actually cost more money than it recovers.
• Change payment terms — In the b2b space, payment terms are difficult to phase out. But you can try reducing them or instituting penalties for people who pay late. Shortening the period by a few days might be all that you need.
• Accept electronic payment — Such companies as Intuit, Western Union, and PayPal offer mechanisms to let companies take electronic payments, whether credit cards or e-checks. Have customers use a secure Web form instead of mailing a check. They save the postage and you get the results faster.

With some planning and minor changes in your business processes, you can minimize any negative impact and even improve your receipts and cash flow.

It’s telling that when the Google+ social network launched in June, businesses clamored to get on the service as quickly as possible. For most businesses, being active on social media is now a requirement. Although Google+ is still dragging its feet on creating pages for businesses, getting your company page started on Facebook, Linked In, and Twitter takes just minutes.

Choose a Name

When you try to register your business's name on a social network, you may find that it's already taken. Both Facebook and Twitter have an appeals process to which you can turn if your business name has been claimed, but they offer no guarantees. Businesses that have been through the appeals process say that Twitter tends to be a bit more generous than Facebook, which usually requires a trademark and a decent amount of poking and prodding before it allows you to have your name.

You can always ask the current owner to hand over the Facebook or Twitter page, but be prepared: The other party may want a payout in exchange for giving up the name. If all else fails you can register a slight variation on your business's name, but make sure to remain consistent. Appearing under one company name on Facebook and another name on Twitter makes it hard for customers to find you.

In addition, prepare a company tagline for Facebook’s About section, LinkedIn’s company description, and Twitter’s bio. This text should simply be a short description of what your company is and does. If the length is right, your existing slogan or tagline might do the trick. Even if you’re trying to seem fun on your company's social media pages, it's best to keep this text short and to the point. Your posted content can convey your tone; the description is just to let visitors know who you are.

Select an Image

Although you should try to keep your logo graphic as consistent as possible among Facebook, LinkedIn, and Twitter, you may need to make some tweaks. All three services will automatically resize images for you, but each one resizes to slightly different dimensions. For instance, Twitter pictures must be perfectly square and will show up at sizes as small as 25 by 25 pixels, and that can cause problems if your logo has different proportions.

We all start the same. In the beginning, everyone is a hustler. You're a fire starter—you have to be. You can't bootstrap an idea into a profitable business without a little elbow grease.

Things start to change, however, once you accomplish a small amount of success. When you cross that valley of the unknown and realize that you're actually going to stay in business...then it gets interesting.

Entrepreneurs vs. managers

Entrepreneurs are go-getters. After they build a business, they are ready to push the envelope once again.

Day-to-day operations bore them to a certain degree. Sure, they are interested in continuing to grow their first company, but in their mind, the daily grind of business is something to be delegated.

Entrepreneurs start companies because they want to change things. They expose gaps in the market. They are always moving on to the next idea.

Once entrepreneurs build one profitable business, they say, "Watch me. I did this once and now I'm going to do it again."

Managers believe in the business they built so much that they want to cultivate it on a daily basis. Once their first business is profitable, they view it as their personal responsibility to take it to the next level.

Once managers build one profitable business, they say, "We're profitable. Now watch me take this worldwide."

You can be successful either way

Let's get one thing straight: both entrepreneurs and managers can be wildly successful with their businesses.

It's not about one style being better than the other, it's about choosing the style that's best for you. I'll give you an example using two of the most successful business men of our time.

Richard Branson vs. Steve Jobs

Branson is an entrepreneur. His Virgin brand now encompasses over 400 different businesses. 400! When he succeeds with one business idea, he is on to the next. In fact, the following quote from Branson is one of the reasons I wrote this article.

"An entrepreneur is not a manager. An entrepreneur is someone who is great at conceiving ideas, starting ideas, building ideas...and then handing them over to really good managers to run the business."

Steve Jobs was a manager. Last month, Apple had the largest market cap of any company in the S&P 500. Jobs built a $300+ billion dollar business by operating in a manner very different from Branson.

Jobs was famously a micromanager and a perfectionist. Employees have noted him calling out tiny details in design changes (all of which had to be approved by him), grammatical and spelling errors in company documents, and so on. He would even answer customer service complaints as the CEO on occassion.

Which are you?

Branson and Jobs have both been incredibly successful at building their businesses, but they have done so in very different ways.

For some of us, being a manager is the path to success. For others, being an entrepreneur is the best bet.

If you're an entrepreneur, then keep building businesses. If you're a manager, then focus on a single subject matter and become brilliant. This is about finding your strength.

When it comes to determining how much to pay yourself, there are several schools of thought and ways you can do it. Before deciding on which one works best for you, first consider the ideas.

Here are some tips for paying yourself from your own business:

Pay yourself first

Many entrepreneurs end up paying all their creditors and bills and they overlook giving themselves a paycheck. While your idea may sound good in theory, to let the business keep it all can be disastrous. Try imagining how long you can go without a paycheck...if you are like most of us, not long at all. So give yourself a paycheck, even if it is just one that will cover your minimum bills to live at first. You can always give yourself a raise later, but you have to live, so take enough to get your bills paid.

The hidden benefit is that by paying yourself first, you will be automatically more critical off all the bills you are incurring (since the money isn’t sitting in the business bank account like it used to be).

Pick a percentage

A lot of entrepreneurs struggle in determining what kind of income they should take. I have found that once a company gets past the $1 million mark in revenue threshold, most companies can afford to pay its owner(s) 15 percent of gross revenue. This is not a magical number, so you will need to find what works best for you. For example, companies doing less then a million can often pay their owners a much greater percentage since the owner is filling the roles of employees who they would normally need to hire (and pay).

The key is knowing your personal pay will fluctuate. Over time, as the business grows, your percentage will drop—a small piece of a bigger pie, in effect. Just know it will always be in line with the amount of money your business is making, therefore keeping your company fiscally healthy.

Choose comparables

Another way to determine how much to pay yourself is to investigate comparable positions in your geographic. If you pay yourself close to what others make you will not raise any IRS eyebrows and should keep everyone happy.

When it comes to getting paid from your business, there are a variety of factors that are going to come into play. You will need to give some thought to each of these to come to the final determination. Such things as whether or not your company is making money yet, how much it is making and what you need to survive.

As a side note, if your business is not making any money, or enough money, for you to take a salary, you need to ask yourself why that is. What is it that you need to do in order to bring in more sales so that you can at least get your bills paid? While many entrepreneurs go into business with a cushion to fall back on, it is best if you don’t have to take advantage of using all that money. So put your efforts toward determining a game plan that will get you on the right track to making sales, so you can take a salary.

There are a lot of variables that will help to determine the salary you should take. If, after considering the ideas above and factors involved you are still not sure about how much salary you should be taking, speak with your accountant. Being familiar with your accounting history, they should be able to help you determine a comfortable salary. Your salary from your business is an important issue that can’t be ignored, so the sooner you get it figured out, the better.

If your startup begins to head south—whether it stops being profitable, requires too much time, or you no longer feel the same about the work—there are things you can do to remedy the situation. But you should first identify the source of the problem. Here are a few potential causes from Business Know-How.

1. You started your business for the wrong reasons.

Did you start because you wanted to make a lot of money? Did you decide you didn't want to be accountable to anyone else? These might be tempting reasons to throw your hat into the entrepreneurship ring, but they are the wrong reasons.

2. You're running out of capital.

Money keeps the wheels turning, but yours have ground to a halt. How realistic were your expectations on revenue and capital? Is it time to reassess and cut costs where you can?

3. You didn't plan properly.

This is a problem on its own, but it also compounds problems that are already there. Make sure you know specifically what need your company meets. Did you not think about what problems you might run into along the way? The short term is obviously important, but if you're not figuring out ways to make sure you're still around this time next year, that's bad news.

Here are steps you can take to combat each of these problems.

If you feel that you started your business for the wrong reason, you need to do one of two things. You can sell, which is an immediate fix that wipes the slate clean, setting you free to move on to the next project. Or you can adjust your attitude. Figure out how to be okay with not making shopping carts full of cash right away. Figure out how to deal with being accountable to others, like customers or business partners. This is certainly the harder of the two options, but owning your own business is rarely easy.

If you're running out of capital, you have two choices as well. First, you can court more investors to raise a new round of funding. If you go this route, be a tightwad. Save every cent you can and stretch every dollar until you turn things around. If your business is a sinking boat, think of the money as buckets for bailing out water—you want each one to be used to its maximum potential. Second, you could consider pivoting. What's a new business model you could adopt that occupies a related space but has lower operating costs? If you're skeptical about pivoting, remember that big names like Twitter, Groupon and Flickr all started doing something completely different.

If you didn't plan properly, then you might do well to sell or disband. Planning is essential, and if unexpected problems are popping up (or worse—the same problem keeps popping up over and over again), this might be a sign that your business is in the wrong space or that you should start out doing something on a smaller scale with less risk involved.

It's always scary to see numbers head into the red. But if you plan and have a good head on your shoulders, you can pull yourself out. And it will only be a learning experience that will make you a better businessperson.

1. If you do not file by the deadline, you might face a failure-to-file penalty. If you do not pay by the due date, you could face a failure-to-pay penalty.
   
   
2. The failure-to-file penalty is generally more than the failure-to-pay penalty. So if you cannot pay all the taxes you owe, you should still file your tax return on time and explore other payment options in the meantime. The IRS will work with you.
   
   
3. The penalty for filing late is usually 5 percent of the unpaid taxes for each month or part of a month that a return is late. This penalty will not exceed 25 percent of your unpaid taxes.
   
   
4. If you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100 percent of the unpaid tax.
   
   
5. If you do not pay your taxes by the due date, you will generally have to pay a failure-to-pay penalty of ½ of 1 percent of your unpaid taxes for each month or part of a month after the due date that the taxes are not paid. This penalty can be as much as 25 percent of your unpaid taxes.
   
   
6. If you timely filed a request for an extension of time to file and you paid at least 90 percent of your actual tax liability by the original due date, you will not be faced with a failure-to-pay penalty if the remaining balance is paid by the extended due date.
   
   
7. If both the failure-to-file penalty and the failure-to-pay penalty apply in any month, the 5 percent failure-to-file penalty is reduced by the failure-to-pay penalty. However, if you file your return more than 60 days after the due date or extended due date, the minimum penalty is the smaller of $135 or 100% of the unpaid tax.
   
   
8. You will not have to pay a failure-to-file or failure-to-pay penalty if you can show that you failed to file or pay on time because of reasonable cause and not because of willful neglect.

1. Most gifts are not subject to the gift tax. For example, there is usually no tax if you make a gift to your spouse or to a charity. If you make a gift to someone else, the gift tax usually does not apply until the value of the gifts you give that person exceeds the annual exclusion for the year. For 2010, the annual exclusion is $13,000.
2. Gift tax returns do not need to be filed unless you give someone, other than your spouse, money or property worth more than the annual exclusion for that year.
3. Generally, the person who receives your gift will not have to pay any federal gift tax because of it. Also, that person will not have to pay income tax on the value of the gift received.
4. Making a gift does not ordinarily affect your federal income tax. You cannot deduct the value of gifts you make (other than gifts that are deductible charitable contributions).
5. The general rule is that any gift is a taxable gift. However, there are many exceptions to this rule. The following gifts are not taxable gifts:
   1. Gifts that are not more than the annual exclusion for the calendar year,
   2. Tuition or medical expenses you pay directly to a medical or educational institution for someone,
   3. Gifts to your spouse,
   4. Gifts to a political organization for its use, and
   5. Gifts to charities.
6. Gift Splitting – you and your spouse can make a gift up to $26,000 to a third party without making a taxable gift. The gift can be considered as made one-half by you and one-half by your spouse. If you split a gift you made, you must file a gift tax return to show that you and your spouse agree to use gift splitting. You must file a Form 709, United States Gift (and Generation-Skipping Transfer) Tax Return, even if half of the split gift is less than the annual exclusion.
7. Gift Tax Returns – you must file a gift tax return on Form 709, if any of the following apply:
   1. You gave gifts to at least one person (other than your spouse) that are more than the annual exclusion for the year.
   2. You and your spouse are splitting a gift.
   3. You gave someone (other than your spouse) a gift of a future interest that he or she cannot actually possess, enjoy, or receive income from until some time in the future.
   4. You gave your spouse an interest in property that will terminate due to a future event.
8. You do not have to file a gift tax return to report gifts to political organizations and gifts made by paying someone’s tuition or medical expenses.

Expenses that qualify for an itemized deduction include:

• Business travel away from home
• Business use of car
• Business meals and entertainment
• Travel
• Use of your home
• Education
• Supplies
• Tools
• Miscellaneous expenses

You must keep records to prove the business expenses you deduct.

If your employer reimburses you under an accountable plan, you do not include the payments in your gross income, and you may not deduct any of the reimbursed amounts.

An accountable plan must meet three requirements:

1. You must have paid or incurred expenses that are deductible while performing services as an employee.

2. You must adequately account to your employer for these expenses within a reasonable time period, and

3. You must return any excess reimbursement or allowance within a reasonable time period.

If the plan under which you are reimbursed by your employer is non-accountable, the payments you receive should be included in the wages shown on your Form W-2. You must report the income and itemize your deductions to deduct these expenses.