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Contents
File Your Business Closure With the StateFile Your Business Closure With Your CountyUnderstand What Federal Requirements Exist When ClosingUnderstand Obligations Under the Worker Adjustment and Retraining Notification (WARN) Act
File Your Business Closure With the State
To close your business in New Jersey and avoid potential fines and fees there are several steps you need to take:
1. File the closure of your business. You will not be able to close your business if your annual reports are not current.
Who needs to do it: LLC, LLP, LP, Corporation (including S-Corp), or Nonprofit organizations only
What to have ready: To complete the close of your business on the annual reports and Change Services program, you will need know your 10-digit entity ID, your business structure and the month and year you formed your business.
Where to file: https://www.njportal.com/dor/annualreports
2. File your future annual reports until your business is formally closed
Who needs to do it: LLC, LLP, LP, Corporation (inculding S-Corp) or Nonprofit organizations only
Where to file: https://www.njportal.com/dor/annualreports
3. Cancel tax registration
Who needs to file: All business structures (including sole proprietors and general partners)
What to have ready: Your 12-digit Taxpayer ID and 4-digit Sales Tax or Employer Pin. If you don’t know your pin, contact the Division of Taxation at 609-292-6400.
How to file: Use the online Registration Change Service to end tax eligibilities.
Where to file: https://www.state.nj.us/treasury/revenue/regrecords.shtml
4. File final tax returns
Who needs to file: All business structures (including sole proprietors and general partnners)
When to file: Make sure that you won't be conducting business in New Jersey after the tax year, and keep your records on file. All tax returns are subject to audit until the statute of limitation expires.
How to file: Check the "Final Return" box on your current year State tax return. If you’re filing a paper State tax return, write "Final" across the top.
Where to file: https://www.state.nj.us/treasury/taxation/forms/efile.shtml
Additional Considerations: If you need to end your business but still have things to take care of, like paying profits to owners or selling inventory, you may need a plan to formally close your business. This plan will explain how to dissolve the business and distribute any remaining assets and liabilities. You can write a document for this purpose, but if you've finished everything, you can move forward and close your business.
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Recent Regulations and Resources
File Your Business Closure With Your County
If you're closing your business and no longer plan to use your Trade name, you may submit a Statement of Abandonment of Use to your local County Clerk.
Understand What Federal Requirements Exist When Closing
Internal Revenue Service
When you close or sell your business, you will still need to file an annual return for the year. If you have employees, you will also file final employment tax returns and make federal tax deposits. Additional returns may need to be filed to report capital gains/losses, disposing of business property, or other items depending on the nature of your business. The IRS Closing a Business checklist provides more information and the necessary forms.
Understand Obligations Under the Worker Adjustment and Retraining Notification (WARN) Act
Overview
The Worker Adjustment and Retraining Notification (WARN) Act protects workers, their families, and communities by requiring employers to provide notice 60 days in advance of covered plant closings and mass layoffs. This notice must be provided to affected workers or their representatives, such as a labor union; to the State dislocated worker unit; and to the appropriate local government unit.
Compliance
Employers are advised to contact the State’s Employer Accounts division to report their closing and provide an updated phone number to be reached at.
Employers are advised to review their B187-Q reports and check each unemployment benefit payment listed against their previously supplied wage and separation records. These forms may still continue to be sent to the employer after the business closes. They may also be contacted by the State’s Quality Control department to provide information and verify the accuracy of UI claims processed through fax, email or certified mail.
Employers should expect to be contacted by the State’s Unemployment Insurance division if more information is required to adjudicate a worker’s unemployment insurance claim. Additionally, employers should expect notification of any appeals filed by an interested party, and to participate in the appeal hearing.
Penalties
An employer who violates the WARN provisions by ordering a plant closing or mass layoff without providing appropriate notice is liable to each aggrieved employee for an amount including back pay and benefits for the period of violation, up to 60 days. The employer's liability may be reduced by such items as wages paid by the employer to the employee during the period of the violation and voluntary and unconditional payments made by the employer to the employee. An employer who fails to provide notice as required to a local government unit is subject to a civil penalty not exceeding $500 for each day of violation. This penalty may be avoided if the employer satisfies the liability to each aggrieved employee within 3 weeks after the closing or layoff is ordered by the employer.
Enforcement
Enforcement of WARN requirements is through the United States district courts. Workers, employees' representatives, and local government units may bring individual or class action suits. In any suit, the court, in its discretion, may allow the prevailing party a reasonable attorney's fee as part of the costs.
Support
The U.S. Department of Labor has created a helpful guide to assist employers through this turbulent time. In addition, NJDOL’s Rapid Response staff will also coordinate with the employer to provide on-site information to the workers and employers about employment and retraining services designed to help participants find new jobs.