Company owners may have many motivations for bringing their business to an end. Perhaps the company is no longer profitable, and owners are looking to cut their losses. In other situations, a merger or other takeover may render a company’s purpose obsolete. An owner’s pending retirement may even lead to the closing of a business. Dissolution may be part of the business owner’s exit strategy.
Regardless of your reasons for dissolving your business, there are strict processes you must follow to cease operations. Given the legal components involved, it is important to reach out to a New York business dissolution lawyer. A skilled attorney could help you compile the necessary paperwork and submit the relevant documentation to the New York Department of State.
No company may dissolve without written authorization from the New York Tax Department. To obtain this consent, business owners must submit a final tax return. This tax return is identical to that used for yearly or quarterly reports, but the owner must mark the return as being “final.” This informs the Tax Department of their intent to dissolve the business.
From this point forward, representatives of the Tax Department will research the company’s record of payment. As long as all current and past taxes are up to date, the agency will issue written consent of their acknowledgment that all taxes are current. Companies with questions about the tax payment requirement for dissolution should contact an attorney in New York as soon as possible.
Companies cease operations under a variety of circumstances. In most cases, the owners simply decide to wind down the business. In others, the State may force the company to dissolve. As a result, the dissolution processes can differ significantly among businesses.
Most companies cease operations voluntarily. To achieve this goal, owners must first obtain consent from the Tax Department as listed above. Next, they must complete the Certificate of Dissolution or the Articles of Dissolution. This vital document demands information about the corporation itself and the justification for ending the business. The explanation could consist of a vote by shareholders or the unanimous consent of all holders of all outstanding shares of stock or membership interests.
Once the owners complete these documents, they must submit them to the Department of State along with a filing fee. This may occur either online or through the mail.
It is also possible that a company may dissolve against the owners’ wishes. This is usually the byproduct of legal action that the State pursues to claim unpaid taxes or other levies. It may also come about as the result of other lawsuits that stem from private causes of action.
If the State acts to dissolve a corporation, the company must still pay all taxes and fees. This continues until the company’s owners achieve a reinstatement or complete the process for voluntary dissolution.
There are many reasons and circumstances you may want to dissolve your business. A New York business dissolution lawyer could offer legal assistance no matter your situation.
Our law firm can guide you through the voluntary dissolution process to obtain Tax Department authorization as well as the consent of shareholders or members. We could also take the lead in limiting damage when the State seeks an involuntary dissolution. Reach out to us now to get started.