By filing dissolution papers with the state, you place creditors on notice that the business cannot incur any further business debt.Because partners are personally liable for business debts of the partnership, and any partner can make decisions that obligate the partnership, if the intent is to end the partnership, you should give notice to the state so that your partners can't burden the partnership with further obligations or debt.Once you've voted to dissolve an LLC or corporation, you must file paperwork with the state, certifying the decision to terminate the business.
Closing your business isn't as easy as simply hanging a "closed" sign in the window.
There are financial ramifications, tax issues, and personal relationships with employees, customers, and suppliers to consider during the process.
Whether you're a sole proprietor, partnership, limited liability company (LLC), or a corporation, the following guidelines should help you cover the basics of closing your business in a more controlled, less stressful manner. Close the Business As Required by Your Business Articles If you're a sole proprietor, you don't need to worry about closing according to the requirements of business organizational documents.
If ending the business is what you want to do, be sure to follow the rules to the letter, to avoid disputes later on. File with the State Sole proprietors don't have to file anything with the state.
But obviously, you'll want to resolve any outstanding issues with creditors, suppliers and customers.
All limited and general partnerships that filed with the state at the inception of the partnership must file dissolution papers with the state.
Even if your partnership isn't required to file paperwork with the state, it's always a good idea to do so.
It's an unwelcome event, but it's a decision you make on your own, without the need to consult with partners or board members.
If your business is a general partnership that doesn't have a written partnership agreement, then all you need to do is give notice to your partner of your express desire to withdraw from the partnership. On the other hand, if your business is a partnership with a written partnership agreement, an LLC, or a corporation, you will need to follow the rules of dissolution contained in the partnership agreement, articles of incorporation, or state laws.