Closing a Business – Business Dissolution in California
Closing down your San Francisco East Bay Area business, – often called ‘Business Dissolution’, is a common reality in tough economic times, changing service or product environments, and the cost of doing business in California. Dissolving your business can either mean you voluntarily decide to shut down your business or you are ordered to do by the court.
No matter whether your entity is a corporation, a partnership or an LLC, it is wise to seek the assistance of a business and tax lawyer regarding a business dissolution to protect you and your business against continued liability once your business is shuttered. If not done properly and thoroughly, there are significant liabilities that you may be opening yourself up to.
Protect Yourself – Close your Business Properly
Properly dissolving your business will protect you from personal liability for the debts your business and/or future judgments against your business. These dissolution requirements are overseen by state statutes and may differ somewhat depending on the type of business you are dissolving. An experienced business and tax lawyer can guide you through the dissolution process and assist you with the peace of mind that comes from resolving and winding down your business entity properly.
Closing a Business Properly
Some of the steps typically taken when dissolving your business include completing existing contracts and refraining from taking on any new work. Another step is to pay off all outstanding debts and place the money in a reserve fund to cover any known but unquantified liabilities.
Settling Tax Obligations
Another step for a proper business closing is to pay off all of tax liabilities prior to making any payments to you as its owner. This helps avoid you becoming personally liable for your businesses’ tax burden. Also, other private creditors can pursue payment by you, as the business owner, if you have taken a premature distribution without first repaying the debts of your business.
Legal Entities need to be Terminated with the Secretary of State
Other crucial steps in the closing of your business is to officially terminate your company’s existence with the Secretary of State. Corporations, LLCs, limited partnerships and limited liability partnerships, are all business entities formed by filing paperwork with the Secretary of State, and thus must be terminated with the consent of the state.
Before the Secretary of State will consider dissolution requests, it requires a clearance certificate from the California Franchise Tax Board. This certificate confirms that the company seeking dissolution has filed the appropriate tax returns and has paid all of its taxes, fees, and any other penalties. Failure to follow the established state statutes and procedures regarding your business dissolution or failing to comply with tax regulations can have severe consequences and open you up to legal and tax liability.
Business Dissolution Lawyer Jonathan C. Watts
Jonathan C. Watts can help guide you and your business through the uncharted course of dissolving your business. Jonathan’s recent LL.M. in Taxation will prove pivotal in navigating your business through the important steps required by the State of California as well as the Franchise Tax Board. Jonathan can help you insure that your business is dissolved properly, your debts have been discharged, your tax liability paid and your personal liability is minimized. He can help you develop a comprehensive and thorough exit plan for your business.
Contact Jonathan C. Watts
This is just a basic overview and is not legal advice specific to your situation.
You can CALL Jonathan at (925) 217-3255.
You can EMAIL Jonathan at firstname.lastname@example.org