A business owner may decide to dissolve the business for a variety of reasons, ranging from the business not being profitable to wanting to retire and not being able to sell the business or have a family member take over the business.
Dissolution of a business operating as a limited liability company or corporation will usually include filing articles of dissolution with the secretary of state’s office.
A business owner wanting to dissolve a company may want to wind up the business’s affairs, terminate its tax reporting obligations and the payment of annual registration fees, and liquidate any remaining assets.
But a business owner should understand the implications of these actions and the business’s obligations to secured and unsecured creditors, employees, and state and federal tax authorities.
In Texas, the dissolution of a business, such as a limited liability company (LLC) or corporation, involves several legal steps. The business owner must file Articles of Dissolution with the Texas Secretary of State. This process includes settling the company's debts, liquidating assets, and ensuring that all obligations to creditors, employees, and tax authorities are met. The business must also terminate its tax reporting obligations and cease paying annual registration fees. It's important for the business owner to comply with both state and federal laws during dissolution to avoid potential legal issues. The Texas Business Organizations Code outlines the specific requirements and procedures for the dissolution of businesses within the state. An attorney can provide guidance to ensure that all legal and financial responsibilities are properly addressed during the dissolution process.
