If you've spent the last several decades building up a small limited liability corporation (LLC) but have decided it's time to retire and enjoy the fruits of your labor, you may be loath to leave the future of your business in the hands of your current partners—particularly if this business is emblazoned with your name. Are you able to dissolve an LLC without the consent of your partners or other stakeholders? Read on to learn more about what you'll need to do to dissolve your LLC if you anticipate push-back from other company members.
Do you need consent from other stakeholders in order to dissolve your LLC?
The answer to this question largely depends upon your LLC's governing body of documents—the bylaws or articles of organization (AOO). If these documents require a vote by shareholders, officers, or other members of the Board of Directors in order to dissolve the company, you may have little recourse for forcing the closure of your business without taking your fellow stakeholders to court.
On the other hand, if you're the sole owner of your LLC (even if a Board of Directors or other governing body handles company issues and management) or if your bylaws are silent on the issue of dissolution, you should be permitted to dissolve your company without others' input.
How should you dissolve your business?
While getting to the point of dissolution can sometimes be onerous when dealing with angry partners, the actual dissolution process is usually quite simple. In most cases, you'll simply need to notify the Secretary of State of the state in which your LLC is incorporated (as well as the IRS) that your LLC is closing. If your LLC holds any assets and/or debts, these assets can be liquidated to satisfy the debts, and any remaining assets will flow to the LLC owner(s).
What can you do if you're facing opposition to the closure of your business?
In some cases, litigation is the only option to help bring closure for two (or more) parties who simply cannot agree on the future of their business. However, there are a few options that may help make the dissolution of your LLC more palatable for your remaining business partners or stakeholders.
If you're simply worried about your name being used to promote a business that is no longer your own, you could opt to sell your LLC to the remaining shareholders, including as consideration for this sale a clause preventing the remaining shareholders from using your name (or the LLC's former name) in any promotional materials or other documents.
You may also be able to persuade your business partners or stakeholders to incorporate under a new name, allowing "your" LLC to dissolve without impeding their ability to continue on in the business. For more information, contact companies like FactorLaw.
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