To Dissolve a business, care is required.
Sometimes, our business endeavors don’t go our way. Sometimes, they open doors to new and exciting business possibilities. In either case, it’s often necessary to dissolve your business so you can move on, or go back to the drawing board. How exactly do you dissolve a business though, and when do you involve your Minneapolis business lawyer? Check out some of the necessary steps you need to complete as a business owner.
SEEK PROFESSIONAL ADVICE
After you’ve made the decision to dissolve your business, your first step should be to seek advice. While you can ask your friends or relatives what they think, what you really need to do is talk to a professional. Your Minneapolis business lawyer will be the best person to talk to since they’re already familiar with your company. Talk about why you want to dissolve your business and if closing down is really the right move for you. They may have business advice that could enable your company to stay open, or they may have guidance for your next business idea or future plans. Whatever you choose, a lawyer will help with the dissolution process.
GET THE PAPERWORK IN
There are different closing steps dependent on the type of business. Sole proprietorships usually have fewer obligations when it comes to dissolving, but partnerships and LLCs have specific guidelines in their articles of organization to follow. Consult your business attorney in Minneapolis and find out what dissolution documents you need to file with the government. Again, sole proprietorships or general proprietorships may not need to formally file these papers, but it’s still a good idea to notify the government you will no longer be running your business.
LLCs and partnerships as well as sole and general proprietorships also need to cancel their
- Permits
- Licenses
- Registrations
- Business or trade names
To cancel these, you may need to fill out paperwork or simply send notice to the government. According to the U.S. Small Business Administration, this step is crucial in the dissolution process because it protects your finances and reputation. If you don’t already have one, contact a business dissolution lawyer in Minneapolis to help find the correct forms and best way to contact the government in order to promptly notify them that you are no longer in business.
DEAL WITH FINANCIAL OBLIGATIONS AND EMPLOYEES
If you have a company with 100 or more employees, the Worker Adjustment and Retraining Notification Act requires you notify your staff 60 days in advance. You also have to issue final paychecks and depending on your state, may need to pay employees for unused leave.
After this, the process is nearly complete. When you file taxes for the year your business closes, you must check the ‘final return’ box as another way to notify the government. Along with this, you need to contact the IRS in order to close your Employer Identification Number (EIN). This information can be found from your business dissolution lawyer in Minneapolis, and a checklist of closing tax responsibilities can also be found at the IRS website.
Don’t let the dissolution of your business tarnish your reputation as a business owner. If your company needs to close down, it’s important to get on top of it and ensure that paperwork is properly filed and completed. You don’t want a poorly dissolved company coming back to haunt you later in life and contacting a lawyer can ensure this doesn’t happen.