Business Entity ChoiceIn today’s BB segment, we’ll be going over the basics of dissolutions. What they are, why someone would want one, and what to do if you accidentally dissolve when you didn’t want to.

First of all, what is a dissolution?

A dissolution is a formal closure of a business with the state. A corporation or LLC must file articles of dissolution in order to complete the termination of a business. Upon being dissolved, the business will no longer need to file annual reports, pay state fees, taxes, or be seen as active in the eyes of the state. 

When would a business dissolve?

Dissolutions are for businesses that have run their course. Maybe the owner’s choosing to move on to a different venture, or there’s no longer money in that particular business. Whatever the reason, sometimes business owners want to voluntarily dissolve their business.

Though sometimes, a business can involuntarily be dissolved.

Though no small business owner ever intends for it to happen, sometimes businesses fall into ‘bad standing.’ This can happen when you fail to send in your annual report, pay for the franchise board tax, or any of the filing fees. If your business has been marked with a bad standing stamp, it could eventually be involuntarily dissolved. Being dissolved, your business no longer has any of the protection or financial benefits that a filed LLC or corporation has. So if you didn’t mean for your business to be dissolve, it’s in your best interest to reinstate as soon as possible. Find out why it was you were dissolved, and do the necessary paperwork for that reason. If you didn’t file your annual report on time, for example, you’ll have to file a delinquent form for the annual report and then the reinstatement application. Additionally, don’t forget about the accompanying fees that go with the paperwork.

Need help dissolving your business? Or was your business involuntarily dissolved and you want to reinstate? Give us a call at 1 877 692 6772 or visit us at