What steps does someone need to take to dissolve their business?

On Behalf of | Jun 1, 2015 | Business Formation & Planning |

Most business owners want their company to do well. Most will try their hardest to make decisions that will inevitably lead to financial success. But as you can imagine, sometimes the best laid plans don’t always go the way we want them to. For business owners, this can mean making the difficult decision to sell a business or close up shop altogether.

As you probably know or realize though, closing a business isn’t as simple as closing the doors. There are a number of steps that need to be taken to ensure that you are dissolving your business in accordance with the law. This is true here in California as well as in other states. So what steps does someone here in California need to take to dissolve their business? Let’s take a look at some.

The first and perhaps the most important step a business owner here in California needs to take before dissolving their business is to speak with a business law attorney who has experience with business entity dissolution. Talking to a lawyer before beginning the dissolution process will make sure that you are doing things in accordance with your business policies and that everyone involved with the company is aware of what is happening.

The next step is to file the correct dissolution form with the California Secretary of State. Explained on the agency’s website, the form effectively tells the state that you no longer wish to be a business, therefore releasing you from future business obligations.

Once you have notified the state, your next step should be to notify the IRS. That’s because even though you are going out of business, you are still liable for filing a tax return that year. By looking at the IRS website, business owners can see what forms they need to submit in their last year in order to be in compliance with the law.

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