If you need to wind up your business, it is important to do it correctly and thoroughly to avoid further issues arising down the road. The form of the business will dictate how it should be properly dissolved. Business dissolution is the last stage of liquidation of a company, in which its operations are terminated, and its assets and property are redistributed. An experienced Plymouth County business dissolution lawyer can make sure that you dissolve the business properly. At Mehrmann Law Firm, based in Kingston, we have 30 years of experience advising and representing businesses from formation through dissolution.Understanding the Business Dissolution Process
The form of the business dictates the steps necessary to dissolve it. In some cases, the state dissolves a business for administrative reasons or through a court decree. In other cases, the people running the business realize for various reasons that it is time to move on, such as when there is a partnership dispute that is not easily resolved.
To voluntarily dissolve a Massachusetts limited liability company, you need to look at your operating agreement. Your operating agreement should include a description of how to dissolve the company. Often, people creating an LLC decide to make the members vote on a resolution to dissolve the company, and the company will be dissolved if a specific percentage vote in favor. The operating agreement will include any specific procedural requirements that the founders specified, such as advance notice about the meeting to vote. A business dissolution attorney in Plymouth County can help you make sure that these requirements are met.
If there is no operating agreement and no dissolution provisions, the Massachusetts LLC Act provides guidance. The law allows you to dissolve an LLC through the unanimous written consent of all of the members. The decision to dissolve should be set forth in official minutes or on a written form. One or more members should handle tasks to wind up the LLC, such as prosecuting or defending lawsuits, disposing of LLC property, distributing LLC assets to members, and discharging liabilities.
Generally, payments must be made in a set order, and creditors should be paid first. If the LLC owes any outstanding taxes, these should also be paid. LLC members may be next in line and should be paid the distributions that they are owed under the operating agreement. Only after that are further distributions made to members, based on their contributions or in the proportion in which they receive distributions. This process is different if the LLC is filing Chapter 7 bankruptcy.
When winding up a LLC, you will need to cancel any registrations. A certificate of cancellation can be filed with the Secretary of the Commonwealth. An authorized member or manager should sign the certificate. It takes about a week for a filing to be processed.
Different tasks must be completed if you are dissolving a corporation. You do not need to get a certificate of good standing before voluntarily dissolving a corporation, but you do need to let the Commissioner of Revenue know. The first step for voluntary dissolution is looking at what your articles of incorporation require. Usually, they require the board of directors to adopt a resolution to dissolve the corporation. However, there may be a requirement that a certain percentage of shares vote in favor of the resolution. In some cases, it is possible to dissolve a corporation when all of the shareholders give written consent to do so.
There is also a statutory procedure to dissolve a corporation when the articles of organization do not include rules or when the articles do not state that these rules are the only rules that can be used. A business attorney in Plymouth County can advise you on this procedure. In the statutory procedure, the board of directors needs to adopt and submit to the shareholders a proposal to dissolve the company, and this proposal goes to a vote at a shareholder meeting. Each shareholder is supposed to be given at least seven days’ advance notice. Unless something different is required in your articles of organization or bylaws, the proposal to dissolve needs to be approved by two-thirds of the votes that are entitled to be made.Consult an Experienced Corporate Attorney on the South Shore
You do not need to hire an in-house attorney to obtain sophisticated legal counsel and representation in connection with the business dissolution process. Our firm takes pride in providing superior legal services at a fair rate. Plymouth County business dissolution attorney Michael S. Mehrmann has the experience and skills to provide strong legal representation. He represents clients in Kingston, Plymouth, Marshfield, Hanson, Carver, Pembroke, and Duxbury, among other communities. Call us at (781) 585-3911 or complete our online form. We also help businesses that need guidance in contract disputes and various forms of litigation.