There are numerous reasons why a business may have to close its doors. This could be related to financial difficulties, retirement or simply moving on to a new venture.
In any case, there are legal processes that should be followed when dissolving a company. Here are some important points to keep in mind.
Notifying relevant parties
Ideally, your employees, business partners, suppliers, customers and other stakeholders should know as soon as possible that the business is closing. This allows you to fulfil your contractual obligations. You’ll also need to notify the IRS, the Department of Taxation and Finance and other relevant agencies of your business’s closure.
Distributing assets
The distribution of business assets upon closure is another important legal consideration. You’ll need to clear any outstanding debts and other financial obligations. The assets of the company need to be distributed among shareholders according to the shareholder agreement and other relevant contracts. Failure to do this can result in lengthy legal disputes.
Filing the right paperwork
You’ll need to file a certificate of dissolution with the New York Department of State. This should include the name of your business and the precise details of the company’s directors.
If your business relied on licenses and permits, these should be cancelled by contacting the Department of State.
Closing a business is often a necessary step, but it isn’t straightforward. The right people must be notified and the correct documents filed.
Following the correct legal protocols when closing a business can help protect you from future liabilities. To help ensure compliance and a smooth translation after closing, it is wise to have experienced legal guidance.