Maryland Business Dissolution Lawyer
Every business owner in Maryland knows that they need to follow specific legal steps to set up their company. Regardless of whether a business is a corporation, a partnership, or a sole proprietorship, or a limited liability company, they are required to register the company with the state and submit articles of incorporation.
These same concepts apply to ending a business. Dissolution is just one part of the process known as “winding down.” This involves notifying the State of the end of business as well as taking appropriate steps to pay outstanding debts, resolve remaining contracts, and distribute profits.
A Maryland business dissolution lawyer could help the owners and executives take the necessary legal steps to go out of business. Whether this is a voluntary choice or the product of necessity, an attorney could help to ensure proper legal compliance during the dissolution process.
Dissolution as an Aspect of Winding Down a Business
At some point, most companies will stop doing business. This can be the result of an owner entering retirement, a decision made by partners to stop working together, or even as the result of a vote from a board of directors. A formal dissolution is one of the first steps in the formal winding down process.
Once the business’s controllers decide to dissolve, it falls to the owner of a company to take the proper legal steps to complete the process. These steps vary based on the business’s organization form. If the company is a sole proprietorship, it may be a sole corporation or a limited liability company with the owner as the sole member. In these situations, the owner must file articles of dissolution with the State Department of Assessments and Taxation. The State provides a form to help with filing the required articles of dissolution. The exact processes will differ based on the type of company with partnerships and PLLCs will having their own unique forms in Maryland.
Other Aspects After Dissolution
Filing a formal dissolution is only one part of winding down a business. Company owners must also settle all accounts before taking any remaining profit. The most pressing matter is ensuring that all debtors receive what is owed to them. These debtors may include:
- The Internal Revenue Service or State of Maryland
- Vendors
- Banks that provided business loans or mortgages on properties
- Employees with past wages or benefits
To pay these debts, it may be necessary to sell real estate, company capital such as machinery, or even owned intellectual property. If money is owed and there is not enough liquidity to pay outstanding debts, selling the company’s assets is required.
The company’s owners would then have the right to any remaining profits. If the company is a sole proprietorship, this money goes directly to the owner. However, corporations, partnerships, and other business structures would state in their articles of incorporation which parties have the right to profits. A proper winding down will ensure a proper distribution to shareholders or members. A dedicated attorney could help to sell assets, pay debtors, and distribute profits according to established agreements.
Let a Maryland Business Dissolution Lawyer Help You Wind Down
Ending a company’s business dealings is never a simple process. Even the smallest companies must formally notify the State of their intent to cease operation. This process varies based on the type of company.
Additionally, filing a formal article of dissolution is only a small part of the formal winding down process. Owners must also pay the company’s debts, sell assets, and properly distribute profits. A Maryland business dissolution lawyer could help guide you through this process. Reach out to an experienced legal team today to learn more.
