How Do You Dissolve a Corporation?
When a business has run its course, and the decision is made to cease operations, the process of corporate dissolution ensues. Whether the dissolution is due to retirement, new opportunities, or legal complications, a crucial part of the process involves hiring an experienced attorney to dissolve the company.
There are two means by which a company can dissolve. The first is by voluntary dissolution. When the business decides to shut itself down, the owner files a Notice of Dissolution with the Secretary of State. On the other hand, a dissolution can be involuntarily ordered due to failure to pay taxes or failure to comply with other legal obligations. In this case, a notice of dissolution is ordered by a court or the Secretary of State.
Procedure for Dissolution of a Company
Once a decision for dissolution is made and the notice of dissolution is filed, the corporation must begin the closure process. The corporation must refer to its by-laws and articles of incorporation to determine if the corporation has adopted specific dissolution procedures. As part of the dissolution, the company sells, or liquidate their assets. Within this process, any property must be returned to the holding establishment/individual or paid off.
Another crucial step toward the dissolution of a corporation is taking care of the debt with creditors. While settling debt, it is important to note that there is room for negotiation with both long and short-term debts with creditors, which is another reason including an experienced attorney in the dissolution is crucial for success. Additionally, a final notice must be given to any company shareholders and customers of the company. This is to give all interested parties a final chance to make claims against the company before it ceases operations. The notice will also make it clear that the IRS will no longer receive tax payments from the entity. Once all prevalent parties have been notified and the information of the company dissolution has been made public knowledge, the final step is to file the articles of dissolution for the company.
The Role of a Business Attorney in Corporate Dissolution
Whenever a company makes the decision to dissolve, there are several intricate steps involved in the dissolution process. Throughout a corporate dissolution, many disputes may arise within the stakeholders, employees, and owners regarding poor investments, unfair compensation, or inappropriate management. To protect both personal and professional interests, it is crucial to work with an experienced attorney to avoid liability or lawsuits. The business attorneys at SAADE LAW have a thorough understanding of the steps to legally and ethically execute a corporate dissolution and will serve as a professional guide through the process by understanding the individual company’s bylaws and articles of incorporation to arrive at just agreements. In addition, our attorneys have an excellent awareness of how to best negotiate with creditors and any parties with existing or interest in filing lawsuits to achieve a successful dissolution. To learn more about how our attorneys can assist company dissolution, please call our Miami law firm at (786) 633-1114.