Flat-fee business dissolution for LLCs, corporations, and partnerships. Articles of dissolution filing, creditor notices, asset distribution to owners, final tax coordination, license cancellations. NY and Delaware entities.
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When a business closes, there's a right way and a wrong way to wind it down. The right way: notify creditors, pay or settle outstanding debts, distribute remaining assets to owners, file articles of dissolution with the state, file final tax returns, and cancel any business licenses, permits, and registrations. The wrong way: just stop operating, ignore the entity, and hope nothing comes back. Wrong-way dissolutions leave entities exposed to ongoing fees (NY entities continue accumulating biennial filings and franchise taxes until formally dissolved), create personal liability traps for owners (improperly dissolved entities don't fully shield owners from later claims), and leave loose ends that can resurface years later — collection agencies pursuing old debts, tax authorities sending notices, lawsuits for unsettled obligations.
Proper dissolution is more involved than formation but typically less complex than ongoing operations. The work has a defined sequence: vote or written consent of the owners to dissolve, identify and notify creditors, settle outstanding obligations (debts, lawsuits, contracts), distribute remaining assets to owners according to the operating agreement or default state law rules, file articles of dissolution with the state, file final federal and state tax returns marked as final, cancel business licenses and permits, close bank accounts and EINs (the EIN technically isn't closed but is marked inactive), and document the dissolution for the owners' records.
Common reasons businesses get dissolved improperly: the founders/owners simply moved on (a partnership broke up, a family member retired, the founders started a new business) and didn't formalize the closure; the business was created speculatively and didn't develop into ongoing operations; the entity was created for a specific project that completed; the business owner died or became incapacitated and the entity was never addressed by the estate. We handle dissolutions in all of these situations, including for entities that have been operating in informal-closure status for years.
Dissolution begins with the owners formally authorizing it. For LLCs, this is typically a written consent signed by the members; the operating agreement specifies what vote is required (often majority, sometimes unanimous for major decisions including dissolution). For corporations, board approval followed by shareholder vote is typical. We document the authorization in writing for the entity's records.
The entity stops taking on new business, completes work in progress, and notifies creditors of the impending dissolution. NY law allows dissolved entities to provide formal notice to creditors that gives them a defined window (typically 90 days) to assert claims; claims not asserted within the window are barred against the dissolved entity. This formal creditor notice process protects owners from later claims by creditors who don't act within the window, but it requires specific procedures and notice requirements that we coordinate.
Outstanding debts, contracts, and obligations need to be paid, settled, or formally terminated. Common items: unpaid vendor invoices, employee final paychecks (with required NY-specific notices), tax obligations, lease terminations or assignments, customer obligations (refunds for prepaid services, completion of in-progress work), and lender obligations (loan payoffs). We work with the owners to identify all outstanding items and either resolve them or address them through the dissolution process.
After obligations are settled, remaining assets are distributed to owners. The distribution sequence is governed by the operating agreement (LLCs) or bylaws and shareholder agreements (corporations). If there's no governing document, default state law applies — typically pro-rata to ownership percentages after return of capital contributions. We document the distribution and ensure the tax characterization is appropriate (some distributions are returns of capital, others are income or capital gains).
For NY entities: articles of dissolution filed with the Department of State, plus tax clearance from the NY Department of Taxation and Finance (required for corporations; LLCs follow different rules). For Delaware entities: certificate of cancellation filed with the Delaware Division of Corporations, plus payment of any outstanding franchise taxes. Filings typically take 1-3 weeks to process. Until filed and accepted, the entity continues to incur annual obligations (filing fees, franchise taxes).
Final federal income tax return marked as final, final state income tax returns, final sales tax returns (if applicable), final employment tax returns (if the entity had employees), and final property tax filings (if applicable). We coordinate with the entity's accountant or refer to one if needed. The federal tax return for the entity's final year typically must be filed within 2.5 months of dissolution.
Business licenses (city and state), professional licenses if applicable, sales tax registrations, employer registrations, foreign entity registrations (if the entity registered in other states), and any industry-specific permits. Cancelling these prevents ongoing fees and prevents future regulatory notices about an entity that no longer exists.
Even after dissolution, certain records must be kept — typically for 3-7 years depending on what they are. Tax records, employment records, contract records, and records of the dissolution itself. We help owners understand what to keep and for how long.
Standard LLC and corporate dissolutions price predictably. Complexity factors: number of owners (multi-owner dissolutions typically involve more documentation around the dissolution decision and asset distribution), outstanding obligations (transactions to wind down, contracts to terminate), tax complexity (final returns for businesses with substantial activity), and multi-state registrations to cancel.
Dissolutions for entities with disputes among owners (one owner wants to dissolve, others don't) involve different work — we handle these as well, but the work is more substantial and is typically priced higher than consensual dissolutions.
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Technically you can, but it's a bad idea. NY entities continue accumulating obligations until formally dissolved — biennial statement filings (with fees), annual franchise tax minimums, and ongoing exposure to lawsuits and creditor claims. The entity remains liable for these obligations and the state can pursue them. Owners aren't typically personally liable for the entity's continuing fees, but the entity stays on the state's records as an active obligor, which can complicate later business activities. Proper dissolution is a one-time cost that prevents indefinite ongoing exposure.
Typical consensual dissolutions complete in 2-4 months. The variable timing comes from creditor notice (the formal NY notice gives creditors 90 days to assert claims), settling outstanding obligations (some take longer than others), and tax clearance for corporations (NY Department of Taxation and Finance review can take several weeks). Simple LLC dissolutions without significant outstanding obligations can complete faster; complex dissolutions with multi-state operations or substantial wind-down work take longer.
Several options depending on the situation. The dissolved entity can pay off the debts from remaining assets before distribution to owners. The owners can negotiate settlements with creditors (often at less than full balance for distressed businesses). The entity can use the formal NY creditor notice process to give creditors a defined window to assert claims. For businesses without sufficient assets to pay all creditors, dissolution may not be the right path — bankruptcy is sometimes the better route, particularly for businesses with substantial debt or potential litigation exposure. We discuss the situation and recommend the appropriate path.
Sometimes. The operating agreement governs dissolution authorization — most agreements require some form of majority or supermajority vote. If the agreement is silent, default state law applies (typically requiring majority vote of members for LLCs). For deadlock situations or disputes about whether to dissolve, the path may involve negotiation, buyout of dissenting members, or in some cases judicial dissolution. We handle these situations but the work is more substantial than consensual dissolutions.
We coordinate with accountants for the substantive tax work (preparing the final returns themselves). We handle the legal aspects — drafting the dissolution documents, ensuring filings are coordinated, addressing any tax-related issues that affect the dissolution structure. Most business owners use their existing accountant for the actual tax preparation; we work alongside the accountant rather than replacing them.
EINs aren't formally cancelled; they're marked inactive. Once final tax returns are filed and the entity is dissolved, the EIN remains in IRS records but no further filings are required. The IRS doesn't reuse EINs, so the number stays associated with the dissolved entity indefinitely but doesn't create ongoing obligations.
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