Over 50 percent of small businesses are not able to make it past the first two years without permanently closing their doors, according to Business News Daily. This means that, even though they may have strived to do everything they could to prevent this from happening, the inevitable end may come much quicker than they think. Closing down shop in most cases is relatively easy, but there are several key steps that need to be followed in order to dissolve a business established as a corporation.
Consider All of Your Options First
Make sure you explore all of your options first and foremost before you start to think about closing the actual business. Keep in mind that all businesses have ups and downs; you could very well be going through a down period that will pass. There are many different things you can do in order to save the business and turn things around. However, if you have already considered these options and determined that the best course of action to take is to close down, then you should see it through.
Trust in the Guidance of a Legal Expert
When it comes to dissolving a corporation, there are several steps that need to be taken in order to make it legally official. If you do not complete the dissolution process correctly, according to the Small Business Administration, you will need be held liable for annual taxes and filings associated with your corporation. By trusting in legal expertise to guide you, a lawyer, such as an attorney from LegalZoom reviews your case thoroughly in order to make sure that you complete all of the steps required to dissolve the corporation without any loose ends.
Get Approval from Everyone Involved
In most cases, you may not be the only person that needs to be considered when it comes to dissolving the corporation. For example, an S corporation will need to think about the needs and desires of their shareholders by obtaining a decisive vote from them before proceeding with a dissolution. The laws of the state require managers and owners of S corporations to receive this approval before they can even initiate a dissolution, according to Chron.com.
Even if you do not have any shareholders, you will still need to seek approval from any partners that share ownership of the corporation with you. When you retain legal assistance, a licensed legal expert, such as an attorney from LegalZoom reviews all of these points with you in detail to make sure that you are able to receive the approvals and authorizations required to complete the dissolution in a timely fashion.
Get Everything in Writing
One of the most important points that you need to remember as you go through the dissolution process overall is to maintain a paper trail. Documentation is a required element of these proceedings, especially when it comes to obtaining authorization from all of the necessary parties. Make sure that you keep track of every conversation that you conduct with your partners, shareholders and even your attorney.
Maintain a calendar of all important dates and milestones that were achieved throughout the overall dissolution process. You never know exactly when this information will become necessary and helpful for you when you have to prepare essential documents and forms as well as when it comes to verifying business deductions reflected on your tax return, according to Yahoo. To help with the overall case, for example, a legal expert from LegalZoom reviews these documents with you whenever necessary.
Even though this may seem like a lot of steps that are insignificant and pointless, by completing them as stated, you will be able to eventually dissolve your corporation with very few complications and move on to the next chapter of your personal and professional life.