Categories: Business Basics

Dissolutions

In 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 MyCorporation.com.

Deborah Sweeney

Deborah Sweeney is an advocate for protecting personal and business assets for business owners and entrepreneurs. With extensive experience in the field of corporate and intellectual property law, Deborah provides insightful commentary on the benefits of incorporation and trademark registration. Education: Deborah received her Juris Doctor and Master of Business Administration degrees from Pepperdine University, and has served as an adjunct professor at the University of West Los Angeles and San Fernando School of Law in corporate and intellectual property law. Experience: After becoming a partner at LA-based law firm, Michel & Robinson, she became an in-house attorney for MyCorporation, formerly a division in Intuit. She took the company private in 2009 and after 10 years of entrepreneurship sold the company to Deluxe Corporation. Deborah is also well-recognized for her written work online as a contributing writer with some of the top business and entrepreneurial blogging sites including Forbes, Business Insider, SCORE, and Fox Business, among others. Fun facts/Other pursuits: Originally from Southern California, Deborah enjoys spending time with her husband and two sons, Benjamin and Christopher, and practicing Pilates. Deborah believes in the importance of family and credits the entrepreneurial business model for giving her the flexibility to enjoy both a career and motherhood. Deborah, and MyCorporation, have previously been honored by the San Fernando Valley Business Journal’s List of the Valley’s Largest Women-Owned Businesses in 2012. MyCorporation received the Stevie Award for Best Women-Owned Business in 2011.