Operating a corporate business requires the owners to be fully dedicated to the business. If the business begins to fail, the owners may consider the benefits of dissolving the corporation and moving on. However, there are many factors that must be addressed before a corporation can be dissolved. If you need legal assistance to dissolve your corporation, you should consult with an experienced California business law attorney as soon as possible.
At the NewPoint Law Group, LLP, our firm is dedicated to providing you with the legal representation that is needed to resolve your legal matter. The dissolution of a corporation is an intricate process that should not be rushed, and our firm is confident that we can see through this process. To schedule a confidential legal consultation to speak about the details of your corporate dissolution, contact the NewPoint Law Group, LLP at 800-358-0305. You may also contact the firm by using our online submission form.
How to Dissolve a Corporate Business
There are a variety of reasons that a corporate business may decide to dissolve. For example, if business partners cannot agree on the direction of the business or the business has been operating at a loss for multiple years, the partners may decide to dissolve the business.
Dissolving a corporation requires a corporation to file documents with the state where incorporation documents were filed. Failing to file incorporation documents to dissolve your business could cause a number of legal issues in the future. For example, if your corporation is no longer operating within the state but has not been officially dissolved, this can cause a number of legal issues. For example, your company could be subject to a number of state laws and could even be the subject of a lawsuit.
Corporations will often have an operating agreement that addresses a number of issues. This agreement should include the method for dissolving the corporation. However, if your operating agreement does not outline the method for dissolving the corporation, there are a number of steps that a corporation must take to properly handle its dissolution.
Voting by Board Members of the Corporation
One of the first steps that should be taken to dissolve a corporation is to have a board meeting between the owners of the corporation. Normally, the board members of the corporation must decide to file a resolution to begin the dissolution of the corporation. If there are other shareholders outside of the board members, the dissolution of the company must then be presented to the shareholders for their vote.
It is important to note that the specific details of this process can vary from state to state. The provisions set in your operating agreement can also play a role in determining how a dissolution must be performed. Our firm of experienced business lawyers can get you started on your dissolution.
File a Certificate of Dissolution
Once the board members and the shareholders have approved the dissolution of the corporation, you can file a certificate of dissolution with the state where the company is incorporated. Depending on the procedures implemented in your state, you may have to file physical documents, or you may even be able to file the certificate of dissolution online.
Wind Up the Business
The next step, and likely one of the most intensive, is to wind up the business. Winding up a business requires the owners of the company to handle a number of issues. For example, one aspect of winding up requires the owners of the company to settle any lawsuits that are ongoing or pending against the company. There are many other tasks that must be performed during the winding-up process:
- Sell off inventory owned by the company and determine what to do with business equipment
- Notify all employees of the dissolution of the business
- Distribute assets to shareholders of the company
- Notify all creditors of the company
- Collect outstanding payments owed by customers
- Terminate commercial leases held by the company
- Handle all federal and state payroll taxes
- File final income tax returns
This is not an exhaustive list. There are many other factors that may be considered when dissolving a corporation. Additionally, depending on your state of incorporation, the steps that you must take to dissolve the company could be completely different. For example, filing a certificate of dissolution may be the last task that a company must perform in some states.
When handling the dissolution of a corporation, it is important to understand that a simple mistake could lead to legal or even tax liability in the future. As a result, you should avoid performing all of these tasks without the aid of an experienced business law attorney that is highly familiar with this process. Our firm would be pleased to help you determine the appropriate steps that must be taken to successfully dissolve your business.
Contact Our Experienced Corporate Business Dissolution Attorneys to Discuss Your Case
If your corporation needs assistance with a variety of legal matters in preparation for dissolution, you should consult with an experienced Roseville business law attorney immediately. The committed business law attorneys at the NewPoint Law Group, LLP have extensive experience handling corporate matters, and we are ready to offer you the legal representation you deserve. To schedule a confidential legal consultation to discuss your company’s dissolution, you should contact the NewPoint Law Group, LLP at 800-358-0305. You may also contact the firm online.