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What steps must you take to dissolve your business?

There are many different reasons you may have to dissolve a business in Illinois. Regardless of your rationale, however, there are certain steps you have to take when shutting down a corporation, limited liability company or partnership. The following is not an all-inclusive list of necessary steps to business dissolution but just an overview of some of the most important.

One of the most important steps, according to FindLaw, is to inform people with a stake in the company that the business is shutting down. This obviously includes your employees, and if you rent office space rather than own your commercial property, it includes your landlord as well. If you close your business before your lease expires, you may be responsible for whatever months remain on your lease, although there may be exceptions.

Another important step is to collect any money owed to the business. This should be one of the first steps you take, one you should accomplish well before the actual dissolution takes place because, if your business no longer exists, it will be harder to collect money on its behalf. Collecting outstanding debts may also help you to settle up with your creditors, which is another crucial step to the process.

You have a responsibility to pay the taxes you already owe on your business, as well as filing final tax forms. For this reason, it is necessary to notify all tax agencies at the local, state and federal levels of the dissolution of your business so that you can settle up. You will also need to cancel your applicable business permits or licenses to prevent any erroneous or fraudulent tax penalties.

Depending on the type of business, the state may or may not require you to file a Certificate of Dissolution. It may be a good idea to do so even if the requirement does not apply to you. 

The information in this article is not intended as legal advice but provided for educational purposes only.

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