Business Dissolution Attorney in San Diego, California
A business can close down for any number of reasons—low cash flow, an unfavorable economic climate, mismanagement, death, retirement, the business completed its purpose or any number of reasons. It’s important to understand that dissolving your business entity properly requires focus on details, knowledge of the process and following through on plans to protect you from liability after the business has terminated.
If you want to understand the legal procedures involved in dissolving a corporation, partnership, or limited liability company, consult with a California business law attorney. Attorney David J. Hollander has devoted his career to guiding clients through the complex procedures involved in business dissolution.
As your lawyer, David can work to understand your unique situation and help you and your business move forward with confidence. Using his extensive knowledge, Attorney David J. Hollander can guide you through the California business dissolution process, protect your best interests, and help ensure that you wind up your business successfully.
Law Office of David J. Hollander is proud to serve clients across San Diego and surrounding areas in California, including all of San Diego County. Set up a consultation today!
Reasons for Dissolving a Business
Business dissolution refers to the legal process involved in winding up the affairs of a business entity and terminating its existence. Some common reasons for business dissolution are as follows:
unfavorable economic climate
market saturation or excessive competition
low cash flow
failure of succession-planning
poor business management
disagreements between members or business partners
Following the business dissolution process, you'll be absolved of your responsibility to pay future taxes, license fees, penalties, liability, and fines. A California business dissolution attorney can examine the structure of your business and help you understand the steps you need to take.
Dissolving an LLC
Here is the process to dissolve a limited liability company (LLC) in California:
Review the Formational Documents: Review the details of the LLC's formational documents, including the articles of organization and the operating agreement. With these documents in hand, you can know the rules and procedures guiding the business dissolution.
Seek Vote from LLC Members: Seek a vote or formal approval from members of the LLC to dissolve the business. Typically speaking, before you can proceed with the dissolution, the majority of LLC members must vote in favor of dissolution.
File Certificate of Dissolution: File the Certificate of Dissolution with the Secretary of State (SOS). Important pieces of information to include in your dissolution certificate are as follows: the LLC name, SOS file number, authorized signatures, and a return mailing address.
Wind Up: Wind up the company's activities by addressing the tasks below:
Collect and pay all known creditors, liabilities, and debts.
Collect and divide or sell the LLC's assets.
Defend and prosecute legal actions against the LLC.
Distribute any remaining assets and funds to LLC members.
Notify and Pay Creditors: Inform all verified creditors through a formal written notice. Pay claimants and creditors on the LLC's record, including LLC managers and members that the company owes.
File a Certificate of Cancellation: File a certificate of cancellation with the SOS. Ensure that you provide information about your LLC's name, SOS filing number, and a statement asserting that you have filed or will file the required tax return with the Franchise Tax Board on the cancellation certificate.
Cancel Licenses & Permits: Ensure that you cancel all county, city, state, and regional business permits and licenses and out-of-state registrations.
Involuntary Cancellation by Court Action: An LLC may be judicially dissolved by a manager or member by filing a lawsuit when any of the following occurs [Corp. Code § 17707.03(a), (b)]: • It is not reasonably practicable to carry on the LLC’s business according to its articles of organization or operating agreement. • Dissolution is necessary for the protection of the rights or interests of the complaining members. • The LLC’s business has been abandoned. • The LLC’s management is at an impasse or subject to internal dissention. • Those in control of the LLC have been guilty of, or are engaging in fraud, mismanagement, or abuse of authority.
A trusted lawyer can guide you through the legal process involved in dissolving an LLC and help you make informed decisions.
Dissolving a Corporation
The process to dissolve a corporation in the state of California is addressed by the state's General Corporation Law ("GCL"). With the help of your lawyer, be sure the steps below are addressed:
The board of directors will submit a business dissolution proposal to the shareholders.
Organize a shareholder's meeting to vote on the business dissolution. The majority of shareholders must vote in favor of the dissolution to proceed.
File a Certificate of Election to Wind Up and Dissolve with the Secretary of State (SOS).
Settle the corporation's affairs and wind up the business. You will need to pay all known debts and liabilities, cancel licenses and permits, close all corporate bank accounts, and distribute the remaining assets and money.
Notify all claimants and creditors about the business dissolution through a written notice.
File a Certificate of Dissolution with the SOS.
Assert that you have filed or you will file the required tax return for your corporation with the Franchise Tax Board.
Cancel all licenses, permits, and out-of-state registrations.
An experienced lawyer can walk you through every stage involved in winding up your corporation and help you address all other important business dissolution matters.
Dissolving a Sole Proprietorship
Here are the procedures involved in dissolving a sole proprietorship business in the state of California:
Notify all your customers and workers that your business is closing down.
End all business operations and deals.
Issue final paychecks to your employees.
Pay all business debts and taxes.
Cancel business licenses and permits with local and state authorities.
Cancel any occupational or professional licenses.
Close tax accounts that are connected with the sole proprietorship business.
A business law attorney can guide you through the legal procedures involved from start to finish and help you navigate this complex process.
How Legal Counsel Can Help
Dissolving a business in California is not easy. Attorney David J. Hollander is ready to advise and guide all sorts of businesses in business law-related matters, including formation and dissolution. Whether you're trying to wind up a partnership, LLC, sole proprietorship, or corporation, Attorney David J. Hollander can address your needs and protect your legal rights.
Business Dissolution Attorney in San Diego, California
If you need guidance when dissolving your LLC, partnership, corporation, or sole proprietorship business, contact the Law Office of David J. Hollander for a simple consultation. Attorney David J. Hollander can walk you through the procedures involved and help ensure a seamless and successful business dissolution. The firm proudly serves clients across San Diego and San Diego County.