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When potential employers ask you to list your reason for leaving a previous job, they're looking for red flags like being fired. But being laid off due to a business closing does not make you look bad. When filling out your job application, honesty is the best policy in this case.
What to Write
When a job application has a space that asks your reason for leaving, the best response is to simply write "company closed" if that's the case. You don't need to go into any greater detail such as explaining why the company closed. This simple explanation shows the potential employer that you lost your job through no fault of your own. Only use this reason if it's the truth, however. If you left for other reasons prior to the closure, you should be truthful.
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M. Scilly is a writer and editor who writes for various online publications, specializing in business and management. He has a fondness for travel and photography. In his free time he enjoys marathon training.