Dissolving a Business: When to Involve an Attorney
No business lasts forever, and some are even intentionally closed by its owners. Sometimes the effort put into running it is not worth the return, or retirement just sounds nice and no one else can be trusted with the task of managing the business. Regardless of the reasons, voluntarily shutting down a company, business, or corporation in California involves a process known as dissolution, and often requires the assistance of a business law attorney due to its many steps and complications.
How a Business Law Attorney Can Help with Dissolution
For many business owners, dissolution can be more problematic and complex than the formation of that same business. Taking apart a company cannot be rushed and will be instructed by a new or separate set of laws and regulations. Even spending decades of your life running a business does not guarantee that you will ever learn about how to dissolve it. This is why so many entrepreneurs and executives turn to a business lawyer to guide them through dissolution from start to finish.
When dissolving your business, allow your business lawyer to help you with:
- Starting point: As if matters were not already complex enough, business dissolution can be accomplished by more than one process, and several processes have to be used for specific business types and situations. For example, corporations with no public stock or an active Chapter 7 bankruptcy filing have highly-specific dissolution procedures. The same can be said of a company that has liquidated all assets and has not conducted any sort of business in five years. Getting a business law attorney allows them to start by identifying your business type and where to begin to dissolve it.
- Voting among shareholders: If your business does have shareholders controlling its primary decisions, then it is likely that you will need to take a shareholders’ vote before you can dissolve it. Corporate law in California requires at least 50% of all shareholders to vote on dissolution. Your business lawyer can help you prepare for the vote and know ahead of time what to do if someone objects.
- Winding up: When dissolution is approved, the winding up process begins. While “winding up” your business, you have to take appropriate steps to prepare it for its final days. The priority will be eliminating outstanding debts and liabilities by appropriately allocated or holding onto remaining finances.
- Filing certificates: You may be required to file a certificate of dissolution with the Secretary of State, depending on the size of your business. Within the certification, you have to provide clear explanations of why your company has been dissolved and evidence of previous steps’ completion. Letting your business attorney draft, review, and file your certificate eliminates any guesswork that could have otherwise led to complications.
Call Our Rancho Cucamonga Business Dissolution Lawyers
At Chung & Ignacio, LLP, we make business law complications a thing of the past for our clients. By providing straightforward legal advice and honest counsel, we can help you navigate through the dissolution of your business without worry. In case matters do run into a snag and a third party violates corporate law or conducts a contract breach, you can depend on us to represent and uphold your best interests through civil litigation.
Learn more about our services and how you can begin business dissolution by contacting our Rancho Cucamonga business law attorneys today.