The decision to close your business is not an easy one to make. When you started your company, you never expected it to close. Unfortunately, there may come a time when you must dissolve your business. A percentage of businesses fail, and those numbers are increasing due to the problems associated with COVID-19. You cannot simply walk away from your business. There are some essential steps you must take in order to legally dissolve a business in Wisconsin. Before you close your business, it is helpful to seek guidance from an experienced business law attorney.
Make the Decision to Close the Business
If you are the sole proprietor of the business, you can make the decision yourself. However, many businesses are partnerships or LLCs. These companies require consent and approval through the proper process before you can take action to dissolve the business. Review the by-laws of incorporation to determine the correct way to move forward. Generally, a majority vote, or sometimes a unanimous vote, is necessary to dissolve a company. In partnerships, the partnership agreement should address the process for dissolution. If it does not, you must make sure that you follow Wisconsin business statutes.
Notification to Creditors
You must provide written notification of the dissolution of your business to creditors. Creditors have a period of time to submit a claim. You may need to publish a notice so any unknown creditors have notice as well. It is critical to notify creditors in a timely manner because they could file a lawsuit against the business, even after you dissolve it. Therefore, make certain that you inform creditors properly. It is also essential to notify the Internal Revenue Service of the dissolution of your business and pay outstanding taxes. Once you complete this step, the IRS will issue a document that allows you to dissolve the business.
Articles of Dissolution
Most businesses must file articles of dissolution with the Wisconsin Department of Financial Institutions (DFI), Division of Corporate and Consumer Services. You can use a standard form or you may draft your own. Either way, you should make sure that you have completed the steps necessary before you submit the document. An attorney will review the document and ensure that it provides you with the necessary protection under the law. Submit the form, along with the required fees either in person or by mail. Typically, it will take about five business days to process the request. After you dissolve your business you will no longer be allowed to use your company name.
Help from an Experienced Attorney
There can be complications involved in the process of closing your business. It is essential that you follow the correct legal process to avoid problems now or in the future. A skilled attorney will answer your questions and assist with the process from start to completion. If you do not dissolve the business, you could face penalties and the DFI will close your business administratively. To learn more about dissolving your business and for help, contact our legal team at Moen Sheehan Meyer, Ltd. online or at (608) 784-8310 for a consultation.