When using street pass for nintendogs+ cats do you just go onto nintendogs+ cats the close the lid or do you go to the home menu and close the lid wich one of them work or do you both work?

Just close the lid. If nintendogs is running, fine. If nintendogs is paused and your home screen is showing, fine. If nintendogs isn't even in your 3DS, still fine!

Just make sure you don't have a DS game running, and you'll be fine.

(Oh, that's assuming you've actually set up and turned on street pass. If you're not sure, check the manual.)