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Corporation Dissolution / LLC Dissolution

 
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Category : > Dissolution
Posted On : Wed Oct 07th,2009

 
 

Dissolution of business could be for variety of reasons for example: bankruptcy, retirement, or a change in career direction. When a business entity is no longer doing business or even if it was never used for anything, it is very important that it follows the legal steps in winding itself up as a legal entity.

A business Corporation, S Corporation or an LLC is an entity created under authority granted by the state. Its existence may only be terminated by the state. The Business Law provides a procedure for dissolving a corporation or an LLC. All legal entities can only be dissolved through formal action, not by a letter or phone call. You remain liable for all taxes, assessments, fines, penalties and interest until you receive a certificate of dissolution from the Secretary of State.

There are typical actions that are taken when closing a business on Federal and State Level:

Federal (IRS)

  • You must file an annual return for the year you go out of business.
  • If you have employees, you must file the final employment tax returns.
  • Make final federal tax deposits.
  • File final quarterly or annual employment tax form.
  • Issue final wage and withholding information to employees.
  • Report information from W-2s issued.
  • File final tip income and allocated tips information return.
  • Report capital gains or losses.
  • Report partner's/shareholder's shares.
  • File final employee pension/benefit plan.
  • Issue payment information to sub-contractors.
  • Report information from 1099s issued.

State (Where your business is formed):

  • You must file an annual return for the year you go out of business.
  • If you have employees, you must file the final employment tax returns with your State.
  • Make final State tax deposits.
  • File final quarterly or annual employment tax form.
  • If you collect Sales Tax in your State. File final Sales Tax Return.

Why should I close business officially even though I am no longer doing business?

If you will not close your business with the state, your corporation will be considered as a legal entity and accordingly you will be liable to pay taxes and other returns thereof. So it’s highly recommended that you should close your business as per the instructions and rules defined by the state and get your certificate of dissolution.

How can I legally cancel a company?

Canceling a company means you are going to wind up your business. In this connection the first step is to hold a meeting of corporation's board of directors in which they need to propose a resolution for business closing. A vote must be taken and the minutes of the meeting must be recorded and retained in the corporate records. Then that proposed dissolution action must also be approved by majority shareholders.

Secondly, the corporation needs to file Articles of Dissolution with the secretary of state. This filing of Article of dissolution varies from state to state. In some states this is done with a simple certificate while others require a more complex process.

Once you get approval from to state to cancel your corporation or cancel an LLC, then the company’s assets will be distributed to its shareholders. For more detail feel free to contact with InfoTaxSquare. Our experts are pleased to serve you and suggest you the best legal way to dissolve your corporation.

What happens if I fail to officially close LLC / close corporation?

If, for any reason, you do not close your LLC/ close corporation with the state, the consequences can be severe and will take you paying heavy penalties in different areas. Some of the consequences you may be indulged to deal with include the following:

  • Personal Liability. Even if you have already stopped your business transactions, legally your corporation, Directors, Officers and shareholders will be still considered as personally liable for the corporation unless you file cancellation legally.
  • Tax Liability. Until you get certificate of dissolution, your corporation will be held liable to file all relevant federal, state, and municipal tax returns. Failure to file these returns will result in the heavy penalties and fees associated with the late filing. And many more

If the corporation does not have any shareholder, who will approve the Corporation termination or LLC termination proposal?

If a corporation does not have officers, dissolution must be approved by a majority of the directors in office at the time dissolution is approved. The corporation shall provide notice to directors of a director's meeting where an approval for corporation termination will be sought. The notice must state that the purpose of the meeting is to consider the proposed business termination.

Is it necessary to notify every member about the boards meeting?

The corporation must notify each director or shareholders, whether or not entitled to vote, of the proposed members' meeting. The notice must state that the purpose of the meeting is to consider dissolving the corporation.

When Will the Corporation be withdrawn?

The corporation will be withdrawn and its existence ended on the date the Certificate of Dissolution is filed and approved by the State. The Business Corporation Law does not permit the effective date of dissolution to be other than the date of filing of the Certificate of Dissolution by the State.

Who can Sign the Certificate of Dissolution?

The Certificate of Dissolution must be signed by an officer, director, attorney-in-fact or a duly authorized person. The name and title of the signer must be typed or printed opposite the signature.

If you are ready to order to dissolve or canceling your company please click order now button or for additional
information please click read more. You can also use our 24/7 live chat service for free consultation or toll free +1 (866)754 4460

 

 

 

 

  


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Comments (3)
Ray Hagins   wrote on : Thu Feb 25th,2010
The business I was trying to opened NEVER Opened....I keep on receiving a bill from the Secretary of State of Georgia....I did file a Certificate of Termination in 2007 ($20.00)....telling them that the business never opened. Can I just follow the instructions of making or typing CD412 Articles of Dissolution....?
Reply : infotaxsquare.com
 
Dear Ray Hagins:

Thanks for choosing InfoTaxSquare.com for your business needs. If you filed documents with the state to terminate your company then you should have received Article of Dissolution for your record.

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Rick   wrote on : Wed Sep 29th,2010
Our S Corp in CA. is failing and is essentially insolvent. There are three shareholders. President 25%, Vice-President 50%, Secretary/Treasurer 25%. At our recent annual board meeting I (President) motioned to petition for dissolution. The Secretary and I voted in favor, the Vice-President opposed. The Vice President indicated verbally that he would fight the motion. Does the vote constitute a majority and do we then have the right to file the petition?
Reply : infotaxsquare.com
 
Dear Rick,

Thanks for choosing InfoTaxSquare.com for your business needs. Please use the following link to read the article regrading dissolving a company:

http://www.infotaxsquare.com/view_article.php?title=Dissolving%20A%20Corporation%20|%20InfoTaxSquare.com&id=379

If you want to use our services to dissolve your corporation please use the following link:

https://www.infotaxsquare.com/forms/articles_of_dissolution.php?isCorp=yes

If you have any question or concern please do not hesitate of contact us at 516.822.3100 or an email at support@infotaxsquare.com

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Terry Staffier   wrote on : Mon Aug 03rd,2015
The business of: A & B Painting and Decorating LLC has not started other than on Sunbiz.com in Florida. ALL partners in this Company want to dissolve it completely and I do not know how to do this other than knowing the fee to file is $25.00. Could you explain the form needed and total amount that must be paid also. Thank you. T. Staffier Administrator/Secretary
Reply : infotaxsquare.com
 

Company want to dissolve

Terry Staffier:

You can please use the following link to dissolve LLC in the state of FL or can be called at 516.822.3100516.822.3100 for any assistance.

https://infotaxsquare.com/forms/articles_of_dissolution.php

You can also use the following links to see, what our customers say about our professionalism and customer service.

Testimonials:

http://goo.gl/BnNqSd

Rated by BBB:

http://goo.gl/pnnhXL


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