Frequently Asked Questions
Q. What is a dissolution?
A. A Dissolution is the termination of a the legal existence of a company.
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Q. What are some of the reasons why a business might dissolve?
A. Voluntary dissolution of a business might occur for a variety of reasons with the most common being management deadlock or unprofitability. A company’s state of formation can enact involuntary Dissolution on a company if that company has failed to file annual reports with the state, pay annual fees and/or taxes, or is encountering bankruptcy.
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Q. Is the dissolution process different for a limited liability company (LLC) than for a corporation?
A. The existence of LLCs is less stable than that of corporations in the sense that an outside occurrence, such as a death of an owner, can end the company’s existence (depending on the operating agreement). Otherwise, the dissolution process is the same for both entities.
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Q. What steps should I take when dissolving my business in order to minimize any risk to my personal assets?
A. There are several steps involved in properly dissolving a business. Please refer to our article “Dissolving Your Business” for additional information on this topic.
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