Dissolution of a Business Explained by College Station Business Lawyer
Businesses have a life span, just as people do. An owner retires or decides the company no longer is necessary; partners separate; most business operations eventually cease. Whether yours is an LLC, corporation, partnership, or sole proprietorship, there may very well come a time when you find it necessary or appropriate to close shop. It is important to follow correct procedures when you do. A College Station business lawyer will work with you to ensure that your decision to cease operations is timely and handled properly.
Different Rules for Dissolution
The rules and guidelines governing dissolution of a business differ with each type. It is very important that you follow Texas statutes related to your enterprise. Working with a skilled and knowledgeable College Station business lawyer will provide you with assistance to make sure that your business dissolution is properly coordinated.
Each form of business presents challenges when it is dissolved. Corporations are from a business standpoint often the most complex to close, especially if the company is large or multi-national. Generally speaking, there are three ways to dissolve corporations:
- Voluntarily: Shareholders elect to dissolve the corporation with a majority vote.
- Involuntarily: Based upon a complaint filed in state court, an involuntary dissolution can be implemented.
- Failure to Pay Taxes: If the corporation fails to pay state taxes, a forced dissolution can be initiated in order to recoup what is owed.
Limited liability corporations are akin to corporations in some ways, but are dissolved in a somewhat different manner. Closing an LLC can occur through several means:
- Voluntarily: This is the case only if the operating agreement specifically states that dissolution can be initiated.
- Through a Vote: A specific percentage of the voting members agree to initiate a dissolution as per the operating agreement.
- Judicial Dissolution
While corporate dissolution can pose challenges, partnerships also can be difficult to dissolve. This is in part because they are so often built from personal or business friendships, and these naturally evolve over time. Dissolving a partnership can take a bit of finesse, given the delicacy of relationships and feelings among the partners, not all of whom may be pleased with the decision. A College Station business lawyer can be a useful outside party in helping iron out differences as the dissolution proceeds.
Four reasons are recognized for dissolving a partnership:
- The business was set up initially to continue for a specific amount of time, and that time is expiring.
- The partnership is for some reason no longer in accordance with state laws.
- The partnership agreement explicitly states an agreement for dissolution.
- A court order is given.
For Assistance in Closing a Business
Should you determine that the time has come to cease operations and dissolve your business, working with a College Station business lawyer is essential. Peterson Law Group will provide the highest quality legal guidance. Call us today at 979-703-7014.