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What do you need to do to dissolve your business?

| Sep 25, 2020 | Uncategorized

When you form a business, especially if you create an LLC or another kind of corporation, your business becomes its own legal entity. As the person who created or manages the business, you have to handle everything on its behalf to remain in legal compliance. That requirement doesn’t end just because you want to close the business.

When you reach a point where you no longer want to operate the business, either because you intend to retire or because the business is no longer as profitable or successful as it once was, closing down your website and notifying clients and vendors will only be one part of the process. You will also need to take formal steps to dissolve the business entity.

You will need to file paperwork and prepare for the next year’s taxes

In order to dissolve an LLC or other type of corporation, you will need to complete certain paperwork and possibly get the approval of other people who participated in the creation and management of the business. Notifying tax and regulatory agencies is also important.

If you fail to take the necessary actions, you could incur substantial fees, in part because there’s an obligation to file annual paperwork and taxes on behalf of the business. If you begin to shut things down, you will also want to create copies of important financial documents so that you are ready to file your final taxes after you dissolve the business.

Taking the right steps at the end of your company’s life will protect you from financial and legal consequences as the owner or operator of the business. An experienced attorney can help you.