StarcycleGuide
Closing your business? Starcycle runs the shutdown with you.
Get startedYou made the tough call, and you need a number to plan around. The cost of shutting down a business starts with a state filing fee, which runs from $0 to $224 in the four states checked below, and grows with what your company still owes. Most of the bill comes from final taxes, last payroll, leases, debts and professional help, so what a startup or small business pays to wind down depends on what is still open. The tables below give each cost, what drives it, and a government figure where one exists.
The cost to close a business is the state filing fee plus what your company still owes on the day it closes. The filing that ends the entity runs from $0 to $224 in the four states below, and final taxes, last payroll, leases, debts and professional fees make up the rest of your total.
These are the state fees for the main closing document in four states, taken from each state's own form or fee schedule:
State | Filing | State fee |
|---|---|---|
Delaware | Certificate of Dissolution for a stock corporation | |
New York | Certificate of Dissolution for a business corporation | |
Texas | Certificate of Termination (Form 651) | |
California | LLC Certificate of Cancellation (Form LLC-4/7) |
Every figure on this page is for a U.S. entity, and each one is the state's fee alone, before taxes or anyone's service charge. If you're closing an LLC, our list of what it costs to dissolve an LLC gives the LLC filing fee in each state it covers.
Business dissolution costs are every expense a company pays to close formally, from the state filing fee to the final tax bill. They also include final wages, payouts on leases and contracts, debts owed to creditors, and fees for any lawyer, accountant or service that handles the work. Dissolving a company means more than switching off the lights. The filing fee is the one cost you can look up in a minute, and it's usually the smallest of them.
When founders think about shutting down, it's easy to picture the bill as the usual filing fee plus a tax return, with every cost on it predictable. That stack is only the fixed group. Fixed costs are the non-negotiables every company pays to shut down: the state filing fee, the taxes your state requires before it accepts the filing, and your final federal and state returns.
Variable or situational costs depend on the specifics of your business. They're where two companies of the same size end up with different totals, and they're the part you'll spend most of your time pricing. The group covers what you owe on a lease, what your contracts charge for leaving early, what you owe lenders and vendors, and how many states you registered in.
One fixed cost surprises people because it keeps recurring until the state filing goes through. California's Franchise Tax Board says the $800 annual LLC tax is due "even if you are not conducting business, until you cancel your LLC." Delaware charges LLCs $400 a year, due by June 1, and corporations a minimum franchise tax of $175, due by March 1.
Obligation tracking, document organization, and stakeholder coordination — in one platform, in the right order.
Get my shutdown planThe largest costs of closing are payroll, leases, debts and professional fees, and no government source sets a price on any of them. What you can do is list each category, see what drives it, and get your own numbers from your payroll provider, your contracts and your CPA. This is the slow part of the budget. Have the lease, your last payroll report and your loan balances open on the desk before you start the table below.
Cost category | What drives it | Published figure |
|---|---|---|
State dissolution filing | Your entity type and the state where you formed | $0 to $224 in the four states above |
State taxes due before the filing is accepted | Each state's rule. Delaware lists its dissolution fee as "plus taxes to dissolve", New York requires the consent of its Department of Taxation and Finance, and Texas requires a certificate from the Comptroller of Public Accounts | Delaware: $400 annual LLC tax, $175 minimum corporate franchise tax. California: $800 annual tax |
Registrations in other states | How many states you registered in, since each one has its own withdrawal filing | Set by each state |
Final federal returns | Your entity type. The IRS lists Form 1120 for a C corporation, Form 1120-S for an S corporation, Form 1065 for a partnership and Schedule C for a sole proprietor | The preparer's fee is the cost, and it depends on your books |
Final payroll and employment taxes | Headcount, wages owed and your state's final-pay rule. The filings are Form 941 or 944, Form 940 and a Form W-2 for each employee | Your payroll total |
Employee notice | Company size. The WARN Act covers employers with 100 or more employees | |
Leases and contracts | The months left on each term and what each agreement says about ending early | Set by your agreements |
Debts and creditors | What you owe, and whether the company's assets cover it | Set by your balances |
Lawyer, accountant or closure service | The number of states, employees and open accounts, and how much of the work you do yourself | No standard published rate. Ask for a written quote |
Record keeping after you close | How long records must be kept. The IRS says to keep employment tax records for at least four years | Storage cost only |
A corporation files Form 966 within 30 days after the date it adopts the resolution or plan to dissolve. The IRS closes your business account, and deactivates the EIN (your Employer Identification Number), after every return is filed and the tax owed is paid. To ask, you send a letter.
The IRS page on closing a business lists the final forms by entity type. Our guide to closing a business with the IRS walks through them in order. Confirm the filing list with your CPA before you send anything.
Final pay has its own timing. The Department of Labor notes that federal law does not require an immediate final paycheck, though some states do. Check the rule in each state where you have employees before you set the last payday.
A closing budget grows with time more than with any single fee. More months staying open means more rent, software subscriptions, insurance and payroll. The annual state taxes above keep coming due until the state accepts your filing, so budget with a buffer for that stretch.
The order of the work matters for the same reason. New York and Texas both want proof from their tax agencies before they accept the closing document. A tax account you haven't closed yet holds up the state filing. Our post on how long it takes to close a business covers what sets the timeline.
75% of closures leave unresolved obligations that create long-term exposure. A structured winddown saves 40–60 hours and cuts legal risk ~80%.
Get a quoteDoing it yourself is the cheapest route in cash, which makes it the cost-effective choice on paper. You pay the state fee, the taxes and your own time. When one step is skipped or delayed, the cheap exit becomes the expensive one. A filing that goes in before its prerequisite comes back, and the company stays open for another tax period while you fix it.
No single task on the list is difficult, and there are a lot of them. The tax accounts are the easiest part to leave for last, and in New York and Texas the state filing waits on them. You'll track a deadline for each agency, cancel each contract under its own notice terms, and keep proof of every filing. If you're weighing the two routes for an LLC, we compared a DIY shutdown with using Starcycle, cost by cost.
Starcycle is shutdown assistance for startups and small businesses. We prepare and file the state dissolution paperwork, track the key dates and the cancellation timelines for your contracts and subscriptions, and keep your documents in one place. Your final tax returns are coordinated with a partner CPA or your own, and we can also make intros to lawyers and accountants.
Most of your bill is set by the states you're registered in, the people on payroll, and the leases, contracts and debts still open. Once you've put a number on each, the paperwork is the part you can hand to us.
A shutdown cost is a one-time expense of closing a business for good, such as a dissolution filing fee, final payroll or a lease payout. Economists also use "shutdown" for a temporary stop in production, where the question is whether revenue covers running costs.
A flat fee pays for the service's work, which is usually the compliance side: preparing and submitting filings and tracking deadlines. State fees, taxes, wages, debts and contract payouts are your company's own financial obligations, so ask for a written list of what the fee covers. Our comparison of business shutdown services shows how providers differ.
The state filing fee is the same with or without debt. The added cost is the creditor work, meaning notices, negotiated payoffs and legal fees. Its size depends on what you owe and to whom. If you have debt, talk to your lawyer.
Liquidation is the sale of the company's assets. Its costs are whatever your sale channels charge, such as a broker's commission or an auction fee. The IRS has you report sales of business property on Form 4797. Our guide to the company liquidation process covers the steps.