Often called a dissolution, ending your business is often more complex than setting it up at the beginning. This can be especially complicated for corporations, LLCs, and any other organizations with many owners. Company owners, by whatever name, must approve the dissolution of the business. The minimum support required for dissolution approval can vary by state and by a company's own governing documents. For small businesses, shareholders or members are often involved in day-to-day operations, and typically know the circumstances surrounding the dissolution; this can make the process much easier or occassionally more difficult. The bylaws of a corporation and the LLC operating agreement are typically the documents which outline the dissolution process. To comply with corporation formalities, a board of directors should draft and approve the resolution to dissolve. Shareholders then vote on the director-approved resolution. Both actions should be documented and placed in the corporate record book. While LLCs are often not subject to the same formalities, we almost universally recommend documenting the decision and member approval.
After the internal decision, the company must address administrative and procedural requirements regarding the government and creditors. This usually involves filing a Certificate of Dissolution or other similar document; filing required tax forms; notifying creditors of the dissolution and settling any claims; and distributing any assets that remain after resolution of all debts. Each step can mean considerable work and require an experienced hand. The attorneys at WLG can help you work through these complex requirements to maximize the potential benefits or minimize exposure to liabilities.