BUSINESS DISSOLUTION ATTORNEY
IN KNOXVILLE AND FARRAGUT, TENNESSEE
If you’re involved in a business partnership and one or more partners decide that it’s time to dissolve the company for any number of personal, professional, or financial reasons — what does the process of dissolution entail? Can these individuals just close the doors, walk away, and move on?
Generally speaking, dissolving a business is typically not that simple. Depending on what type of business it is — a traditional corporation or a Limited Liability Corporation (LLC) — and the number of partners there are, there can be a number of different important legal steps that need to be taken to successfully dissolve the business.
If you’re facing a business dissolution dilemma in or around Knoxville or Farragut, Tennessee, contact the Law Office of Joshua S. Reed today. We have the legal knowledge and resources to guide you through the entire dissolution process and will work hard to prevent any unforeseen or unplanned side effects or repercussions.
REASONS FOR DISSOLVING A BUSINESS
Partners don’t always agree on the direction of a company, and internal spats can lead one or more of the individuals to decide it’s time to end the enterprise. Too much competition can also make survivability questionable, especially if low cash flow begins to loom large. Product liability and its consequences are another frequent and significant factor in business dissolution decisions.
External pressures from creditors or suppliers can also play a significant role in the decision to dissolve. Employees can also figure in if they fail to perform as expected or reveal trade secrets or conspire to help competitors. Customers are another key to the survivability of any business. Customer complaints and demands can tie up valuable time and resources, and even drive away other customers.
DISSOLVING A LIMITED LIABILITY CORPORATION (LLC)
The dissolution process for an LLC is often spelled out in either the Articles of Organization or the Operating Agreement if one was used to create the entity in the first place. Usually, this involves a vote of the members, or partners, of the LLC, whether by a majority or by a specified number.
Once dissolution is agreed upon, you must file a Notice of Dissolution with the Tennessee Secretary of State. Note that once you do so, your LLC’s name is open for anyone else to assume.
After that, Tennessee’s LLC Act requires that several matters be taken care of. In this process — often referred to as “winding down” — the company must:
Collect or make provisions to collect all debts owed to the LLC
Pay or make provisions to pay all debts, obligations, and liabilities of the LLC, including taxes
Sell, lease, transfer, or otherwise dispose of the LLC’s property and assets
Distribute any remaining property, including money, to LLC members
As part of the process, though it is not legally required, giving notice to creditors individually through direct contact and/or globally through a newspaper announcement can limit the LLC’s liability.
As a final step, you must file Articles of Termination with the Secretary of State.
DISSOLVING A CORPORATION
Dissolving a traditional corporation depends on whether there are shareholders. Sometimes the incorporators themselves may decide to end the corporation before it has issued shares or done any business.
If this is the case, the dissolution process is fairly straightforward. You simply need to file a form titled Articles of Dissolution and Termination by Incorporators or Initial Directors with the Secretary of State. With the filing, both the dissolution and termination can be accomplished simultaneously.
If the corporation is fully functioning with shareholders, the process is a bit more complex. The first step involves a vote by the Board of Directors to dissolve. The board must then file what is called a Written Consent to Dissolution with the Secretary of State. Along with this, they must submit Articles of Dissolution.
After that, similar to the LLC process, you must wind down your business before filing a Written Consent to Termination, along with the Articles of Termination of Corporate Existence.
WORK WITH A BUSINESS DISSOLUTION ATTORNEY YOU CAN TRUST
This brief introduction does not cover all the complex legal issues involved in dissolving a business entity. Internal and external disputes are likely to accompany any plan to dissolve, which can always further complicate the process. Drafting Articles of Dissolution and Articles of Termination also requires the experience and knowledge of an attorney familiar with these matters.
That’s why it is so important to work with a Tennessee business dissolution attorney who you can trust to handle these matters efficiently and effectively. Here at the Law Office of Joshua S. Reed, we have extensive experience working with individuals, LLCs, and corporations to help them dissolve their business, tie up loose ends, and address any issues that arise along the way. If you’re considering business dissolution, don’t face these challenges alone. Call or reach out to the Law Office of Joshua S. Reed today for reliable legal counsel and guidance.
BUSINESS DISSOLUTION ATTORNEY IN
KNOXVILLE AND FARRAGUT, TENNESSEE
If your business, whether a traditional corporation or LLC, is considering taking the final step of dissolution, contact the Law Office of Joshua S. Reed for knowledgeable and experienced legal counsel and guidance. We proudly serve clients all over East Tennessee including but not limited to Knox County, Blount County, Anderson County, Sevier County, Loudon County, and Union County, Tennessee. Call or reach out today to learn more about how we can help you move forward with your dissolution plans.