When you are ready to dissolve a corporation, there are specific steps that you have to go through. You must notify the California Franchise Tax Board and pay any and all taxes that are still outstanding for the business. Once the final taxes are paid, you can no longer operate the business. The proper filings must also be submitted to the Secretary of State, which is the formal dissolution request. You may also need to notify anyone associated with the business that the company is closing, including financial institutions where business accounts are held.
If you are not sure how to dissolve a corporation or you have questions about the process, our team is standing by to help. Our business attorneys in Southern California have experience with forming and dissolving corporations and can make sure you understand what the process entails and how to do it correctly.
When Is It a Good Idea to Dissolve a Corporation?
Most corporation dissolutions are voluntary and are a result of the company no longer being financially solvent. If the business stops making money or isn’t returning high enough profits, and it doesn’t look like that is going to change, the stakeholders may decide that it is time to close the business. Corporations can also be dissolved just because the members want to terminate the business, regardless of what the finances look like.
Do I Need a Business Lawyer to Dissolve a Corporation?
Dissolving a corporation requires that specific steps be done in a specific order. While it is technically possible to dissolve a corporation without an attorney, it is much more difficult and time-consuming, as you would have to draft and file all of the paperwork and ensure that everything is handled correctly on your own. An attorney takes on all of this burden when you hire them, making the process easier and often faster as well.
Can I Reopen the Business After It Is Dissolved?
If the members dissolve a corporation and then later decide that they want to revive it, this is an option. The normal process is to file documents with the Secretary of State. These documents are often referred to as reinstatement papers. You may also have to pay additional fees or go through other requirements to get the corporation back in active standing. If you think that you might want to revive the corporation later on, talk with an attorney to see if there are other options beyond dissolution that might be a better long-term strategy.
Call our law firm at 323-230-6200 to find out your options for dissolving a corporation. Our attorneys can guide you through each step and ensure that you understand all of the possible consequences for your business and the stakeholders.