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When a business chooses to dissolve their organization it means that they have decided to end the company's existence. There may be a number of reasons why a business may want to dissolve or shut down. These reasons may include, death of a partner, internal disputes, new pursuits, insolvency, or accomplishment of purpose.
The way you dissolve your business depends on what type of business you are running. Most businesses exist as a sole proprietorship, a partnership or a corporation. Below you will find explanations of how to dissolve each of the different business entities:
If you operate your business as a Sole proprietorship, the dissolving process is less complicated. Your business will dissolve once you make the decision to dissolve your business or upon your death.
When the partners have made an agreement regarding dissolution of the partnership, the partnership will end upon the happening of an agreed event. However, when this is no agreement between the partners regarding dissolution of the partnership, the partnership will automatically end upon notice of any of the general partners of their intention to dissociate. Before officially terminating the partnership, the partners will liquidate the partnerships assets to satisfy the partnerships creditors.
There are procedural steps that shareholders must follow in order to legally dissolve a corporation. Once they have done so, they can vote to have the corporation dissolved.
Before successfully dissolving a business, you may be required to notify your creditors, pay your taxes, and cancel your business permits and licenses. A business law attorney can help you deal with impending legal responsibilities. They may also help research potential tax issues, issues relating to debt, and other legal matters that can arise with dissolving a business.
This article is intended to be helpful and informative. But even common legal matters can become complex and stressful. A qualified business lawyer can address your particular legal needs, explain the law, and represent you in court. Take the first step now and contact a local business attorney to discuss your specific legal situation.