Many Pennsylvania business owners are aware of the possibility that their business will not generate enough profit to warrant staying open. Even business owners who are successful may want to pursue other endeavors or to spend time with family.
Business owners who want to cease all business operations may consider formally dissolving their companies. However, the dissolution process will depend on the location of your business, as well as the type of business you have formed. In this post, we will cover the basics of dissolving a limited liability corporation (LLC) in Pennsylvania.
If you have decided to dissolve your LLC in Pennsylvania, an attorney experienced in business law can make sure that you complete every step of the dissolution process. Key steps include:
- Obtaining other members consent regarding dissolution, as specified in operating agreement (if no operating agreement exists, state laws require unanimous consent).
- File dissolution certificate to formally dissolve business (optional).
- Wind up process
- Notify claimants of dissolution (optional, but recommended to protect LLC and members).
- Distribute assets (creditors first, then non-creditor members).
- Pay taxes and apply for tax clearance certificates.
- File for Certificate of Termination with Pennsylvania Department of State.
While walking away from a business you worked so hard to build is never easy, it is often necessary to pursue exciting new opportunities or save yourself and your family from financial difficulties. Your attorney can advise you on whether dissolution is best for you and help you through the process if you choose to shut down your business.