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  1. #1

    Default Shutting Down a Business that Owes Large Amounts of Money to Customers

    My question involves business law in the state of: California

    Hello all,

    My main bread and butter business has been an online SEO services firm where I got paid to help individuals promote their websites through content, search engine optimization, etc. Been doing this for 4 years now.

    I am shutting down the business because I just can't do this anymore, too much stress and am totally overloaded to the point where I get complaints and yelled at every day.

    The problem is that I have taken on way too much and cannot fulfill my obligations to over 100 customers who have paid me $300 - $400 each.

    I also do not have the money at this time, but plan on refunding everyone over the course of 6 months.

    My Questions: What is the proper way to do this? Should I just delete my website domain and email everyone that I will refund them when I can?

    Should I put up a notice on my website that states something like "Sorry but I'm out of business and for refunds please send your name and transaction info to my email"?

    What about paypal? Many people will file a transaction dispute with paypal but my bank does not have the funds. Should I alert paypal?

    I'm just trying to do this properly without getting sued or have to go to court. I'm an honest person that just made too many mistakes and took on more work than I could handle.

  2. #2
    Join Date
    Oct 2006
    Posts
    16,183

    Default Re: Shutting Down Business but Owe Over $40,000 to Customers

    Quote Quoting Charles-Landlord
    View Post
    My question involves business law in the state of: California

    Hello all,

    My main bread and butter business has been an online SEO services firm where I got paid to help individuals promote their websites through content, search engine optimization, etc. Been doing this for 4 years now.

    I am shutting down the business because I just can't do this anymore, too much stress and am totally overloaded to the point where I get complaints and yelled at every day.

    The problem is that I have taken on way too much and cannot fulfill my obligations to over 100 customers who have paid me $300 - $400 each.

    I also do not have the money at this time, but plan on refunding everyone over the course of 6 months.

    My Questions: What is the proper way to do this? Should I just delete my website domain and email everyone that I will refund them when I can?

    Should I put up a notice on my website that states something like "Sorry but I'm out of business and for refunds please send your name and transaction info to my email"?

    What about paypal? Many people will file a transaction dispute with paypal but my bank does not have the funds. Should I alert paypal?

    I'm just trying to do this properly without getting sued or have to go to court. I'm an honest person that just made too many mistakes and took on more work than I could handle.
    There are other options besides shutting the company down...and risking a whole lot of small claims suits and/or a whole lot of negative bank balances and fees for overdrafts etc.

    You can slow down gradually until you get to a size you can handle. Refund the customers you can right now, selecting those who are causing you the most stress...and then over time refund more, while still servicing them to the best of your ability while you are gradually shutting down.

  3. #3

    Default Re: Shutting Down Business but Owe Over $40,000 to Customers

    Quote Quoting llworking
    View Post
    There are other options besides shutting the company down...and risking a whole lot of small claims suits and/or a whole lot of negative bank balances and fees for overdrafts etc.

    You can slow down gradually until you get to a size you can handle. Refund the customers you can right now, selecting those who are causing you the most stress...and then over time refund more, while still servicing them to the best of your ability while you are gradually shutting down.
    Thanks for the response. With other situations at hand here there is absolutely no way that I can work on anything each day, nothing at all.

    I'm stuck and have no money to pay anyone at this time. My customers are all over the world, nobody here in my state.

    I already know this well affect my credit when paypal gets over drawn, the bank, etc. It's part of what I have to go through.

    How does small claims court work if someone sues you in anther state or country?

    - - - Updated - - -

    You may lock this thread. I got legal advice over the phone today from an attorney. Thanks everyone.

  4. #4
    Join Date
    Sep 2010
    Posts
    19,656

    Default Re: Shutting Down Business but Owe Over $40,000 to Customers

    What is the nature of the business? Was it incorporated? Were you a sole proprietor? It makes a difference.

    No matter what you can't just declare yourself out of business if you have creditors and expect them to just go away.

  5. #5
    Join Date
    Sep 2011
    Location
    OH10
    Posts
    17,019

    Default Re: Shutting Down Business that Owes Large Amounts of Money to Customers

    You are likely going to be held personally liable for the debt I surmise. Hopefully you addressed that with your lawyer.

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