One of the legal requirements of closing down a business is informing all the people with whom you have any business links, of your decision to close down the company. This includes clients, employees, vendors, suppliers and of course, creditors. Any organization that you owe money to, including banks or even vendors with whom you have a “buy now, pay later deal”, need to be informed of your decision to close down your business.
Since your creditors are people who will suffer quite a lot when your company goes out of business, it is best to sort whatever is owed to them first. First things first – write a letter to them outlining why you are closing down, and what it means for the organization that has lent you money. Chart out a payment method – or if you want to pay them in a lump sum, get it over with once and for all. It all depends on how you decide a payment plan, but do mention how you intend to pay up, lest you find yourself in the middle of a complicated court case!
Your “going out of business” letter should be to the point and explanatory – here is one to help you write your own, when required:
82 View Road
Middletown, NJ 46936
Tel: (000) 124-7454
September 21, 2016
Mr. Curt Danial
Bank of America
508 Deepdale Road
Middletown, NJ 49027
Dear Mr. Danial:
Owing to the immense recession in the industry, and the subsequent burning down of our factory on Hill Road, we have decided to close down Honeywell International for good. We will be operating through this year (until the end of December 2016) but from January next year, our organization will be deemed permanently closed.
We are aware that a sum of $35,000 (out of the initial $75,000 loan amount) is still owed to the Bank of America, which was taken as a loan to build part of the factory on Hill Road in January 2012. We will continue making the monthly payments until we can sell the land (on which the factory was built) and pay off the loan completely in one large installment – please note that the loan agreement made between our respective organizations provides this provision in the event of business closure.
Thank you for doing business with Honeywell International. We appreciate you providing assistance to us when we required it, and we will be recommending your services as and when opportunities arise.