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Sole proprietors can decide by themselves that they should close up shop. Whereas if your business is a partnership, limited liability company (LLC), or a corporation you and your co-owners must make the decision to dissolve the entity according to the guidelines established in your articles of organization. Remember to document the final decision with a written agreement.
Since there's no FINAL RETURN box (as there is on an 1120 s for an s-corp or 1065 got a partnership)
Since a sole proprietorship is a "disregarded entity" and you just file the schedule C as a part of your 1040
Here's an excellent piece on this: http://www.sba.gov/content/steps-closing-business
As the article mentions, depending on any city/county/ other municipality licensing, etc, you may want to go through whatever process any licensing you may have there requires ... but since you've never incorporated there's no STATE dissolution, and again, you were being taxed as a pass-through entity by IRS, so there's nothing to do there
you'll still havew your 1040 of course, just no schedule C
Here's another reference for you: http://smallbusiness.findlaw.com/closing-a-business/necessary-steps-to-dissolve-your-company.html
And finally, in the event that you had a payroll or other employee issues, here a good checklist to be sure you've covered everything: http://www.irs.gov/Businesses/Small-Businesses-&-Self-Employed/Closing-a-Business-Checklist
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