The decision was taken after the recent demise of Amato Distribution, which left the company owed approximately £75,000, a debt it was unable to absorb.
Although 3 Beat has no plans to work in label management again in the near future, it remains hopeful that a partner will be found to enable it to re-open its digital download store.
The company says that the closure of 3 Beat Label Management will have no effect on the other elements of the 3 Beat business, namely the shop, label 3 Beat Productions and the club night Back To The Old 'Pool.
3 Beat founder Jon Barlow says, "It really saddens me to have to close 3 Beat Label Management and to see the knock-on effects of this decision, not only on the labels that have been part of the 3 Beat family, but also on our own digital download business. We looked at all options to avoid this decision, but felt that there were none.
"Unfortunately, I think the demise of Amato will cause further repercussions in the world of dance music before things settle down again. I am now looking forward, focusing positively on the rest of the 3 Beat Records business which remains buoyant. Our recent deal with Universal will see 3 Beat Productions aiming for crossover success in 2008, the record shop is as strong as ever and our recent foray into club promoting has been an unqualified success. These are the areas on which we will be focusing in 2008."
3 Beat Label Management, which was created in 1999, has represented leading dance music labels including, Border Community, Boss Records, Vapour Recordings, Supplement Facts, Perc Trax and Love Triangle Music.