Business Dissolution Attorneys in Dayton, Ohio
Dissolving your business can be a long and complicated process. Whether you need to close an LLC, corporation, or sole proprietorship, you will need to take certain steps to wind up your affairs and activities. There are strict procedures to follow to shield yourself from personal liability and ensure that the business dissolution process goes smoothly.
The business dissolution attorneys at Duwel Law can help you take care of all the business, tax, and legal matters should you decide to close your LLC, corporation, or sole proprietorship. We provide tailored solutions to business owners in Dayton, Ohio, and surrounding counties, including Darke, Greene, Miami, Montgomery, and Warren.
Reasons for Dissolving a Business
There are countless reasons for dissolving a business. Those reasons vary from one business to another but may include:
Cash flow problems. A large number of businesses fail because of poor cash flow that is insufficient to maintain business operations.
Bad management. Poor management can also become a reason for business dissolution.
Fierce competition. If a business is not able to compete with other companies in the same industries, owners may eventually decide to shut down the business.
Inadequate accounting. A company may also fail due to the lack of accurate accounting.
Insolvency. When a business cannot repay its debts, it becomes insolvent. Insolvency may become a reason for business dissolution.
Death or disability. A partner’s death or disability may also trigger the business dissolution process.
Whatever the reason for business dissolution, you need to understand the dissolution process to ensure that you get everything right. The process for dissolving a business is different for LLCs, corporations, and sole proprietorships, which is why you may need to seek the assistance of a knowledgeable business dissolution attorney.
Dissolving an LLC
The dissolution process for a Limited Liability Company (LLC) includes the following steps:
Vote. Members of the LLC must hold a vote in order to dissolve the company.
Tax clearance. While Ohio law does not require you to get a tax clearance to dissolve an LLC, you are still required to file various tax forms in connection with dissolving the business.
Article of dissolution. The next step in the LLC dissolution process is filing an article of dissolution and waiting for approval from the state.
Pay debts. Before you can dissolve your LLC, state law requires you to settle your outstanding debts.
Asset distribution. Once taxes are paid and debts settled, you can proceed with distributing assets to the members of your LLC.
Winding up. The final step in the business dissolution process is known as “winding up.” The processes vary from one LLC to another, which is why you should seek legal counsel from an experienced attorney.
Dissolving a Corporation
Dissolving a corporation involves a slightly different process:
Approval. First and foremost, you need to get approval from shareholders and the board of directors. The board and shareholders must approve the dissolution by two-thirds of the voting power.
Article of dissolution. As with an LLC, you need to file an article of dissolution in order to dissolve a corporation in Ohio.
Taxes. One of the most critical steps to take when dissolving a corporation is finalizing taxes.
Debts. All debts owed must be repaid before dissolving a corporation.
Asset liquidation and distribution. Any remaining assets after the payment of taxes and debts will be liquidated and distributed to shareholders.
Winding up. The final step is to wrap up all of your other business affairs.
Dissolving a Sole Proprietorship
Since sole proprietorships generally do not require formal state registration, the dissolution process differs from the process of dissolving an LLC or corporation:
Notify the IRS. The first step to take when dissolving a sole proprietorship is to notify the Internal Revenue Service and local tax authorities of the dissolution.
Cancel licenses. You must cancel all licenses and registrations associated with your sole proprietorship.
Settle debts. Before dissolving your business, you must notify all lenders and creditors and settle all debts.
Close bank accounts and credit cards. In order to dissolve a sole proprietorship, you must close all bank accounts and credit cards associated with the business.
Business Dissolution Attorneys Serving Dayton, Ohio
If you are considering closing your business, you might want to consult with an experienced attorney to help you navigate the dissolution process. At Duwel Law, our trusted business dissolution attorneys in Dayton, Ohio, provide practical solutions for closing a business tailored to each client’s individual circumstances, goals, and needs. Get more information about the business dissolution process by scheduling a case review with our attorneys.