When you want to dissolve, wind down or liquidate your company, here are a few things to keep in mind:
- There are two ways to "wind down" a business with respect to state filings:
- First, most states allow you to file "Articles of Dissolution" (or some equivalent, what it is called varies by state) to officially dissolve your entity. This will make it so that the state will not send you notices in the future, or ask you to continue paying state registration fees, etc. The filing fees for this varies by state.
- Second, you can unofficially dissolve by disregarding state filings. Many business owners elect this route because they don't want to pay a filing fee just to shut down their business. To do this, you have to let the registration on your business expire by failing to file annual reports/information statements and ignoring state renewal fees. In this case, you'll fall into bad standing with the state and may get notices that you owe late fees/interest on your state fees, but if the business is truly shutting down, you may not care.
- When you dissolve a business, any assets should be distributed as follows:
- First, to pay off any creditors the Company has (debt, loans, credit cards, etc.). The order you pay off creditors typically is based on seniority of the debt (which is sometimes hard to determine and is something you should ask your lawyer about). If you go with the second approach above when dissolving your entity with the state, the state's late fees may be lead to them being treated as a creditor. So if you have assets to distribute, you may want to go the route of an "official" dissolution.
- After all creditors are paid off, assets are divided up among equity holders according to the liquidation provisions of your operating agreement (if an LLC) or Charter (if a corporation).
Savvi does not have any workflows related to dissolving or winding down your business.
Savvi Technologies, Inc. is not an attorney or a law firm, and can only provide self-help services at your specific direction. Do not rely on any documents or information from Savvi without consulting an attorney. Savvi may partner with or refer clients to licensed attorneys, but such referral does not constitute an attorney-client relationship until the attorney is officially engaged by the client.