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Business Dissolution Lawyers
What Is Business Dissolution?
When the decision makers in the business decide to end the company's existence because of the sale of all assets, attainment of purpose, or unprofitability, the business is considered "dissolved." Dissolution gets rid of all company debts and assets, and pays all creditors and shareholders. The business is effectively concluded as a result of business dissolution.
How Is a Business Dissolved?
The way that a business is dissolved depends on the type of business in question. A business can exist as three different types of entities, which are:
Sole proprietorships last as long as the owner desires it to or until the owner's death. Upon the owner's death, the sole proprietorship ceases to exist, with its assets and liabilities becoming part of the owner's estate.
In partnerships, the outcome is the same unless a partnership agreement depicts a way by which the deceased partner's share may be bought out by the other partner(s).
A corporation may be dissolved only if its shareholders vote to do so. Upon a shareholder's death, his shares become part of his estate and may pass on to his heirs.
What Can I Do to Prepare for a Business Dissolution?
Certain steps need to be taken to ensure that your assets will be protected from any liability that could occur when your business is dissolved. The following is a short list which outlines some of your options:
- Check to see if you need to continue to purchase insurance to cover any product liability issues
- If you are planning to sell off inventory, you may have to file a bulk sale report
- If you are planning to lay off any employees, you may be required to give notice and provide insurance for them
- Create a list of and review all contracts that are open
- Settle any lease issues
Do I Need to Consult a Lawyer for My Business Dissolution?
Dissolving a business consists of many potential liabilities. An attorney can assist you in protecting your interests and ensuring that all regulations and laws are complied with. An attorney can also help you sift through existing contracts to determine your course of action. A lawyer can also arrange the real estate sales process, should you ultimately wish sell the business property.
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