I have discussed how to form a Virginia LLC and Virginia corporation before, which is definitely a hot topic. But I also get questions from company owners regarding how to properly "shut down" or dissolve their limited liability company or corporation. The process is similar for both types of entities but has some differences worth noting.
If you would like to shut down your Virginia LLC, the first step is to wind up the affairs of the LLC. This involves collecting all of your outstanding accounts receivables (money that is owed to you), paying all of the LLC’s bills (money the company owes to others – wages, vendor invoices, rent, etc.), and distributing the excess (or profits) to the LLC members per the terms of your Operating Agreement. Once that is done, the LLC files Articles of Cancellation with the Virginia State Corporation Commission. The Virginia SCC will process the Articles and send back a Ceritificate of Cancellation stating the effective date of termination. Once you have that, the LLC is done. Be sure not to do any business under the LLC name after that point.
If you would like to shut down your Virginia corporation, you start by filing Articles of Dissolution with the Virginia State Corporation Commission. Once you have filed Articles of Dissolution, the only activity allowed to be done by the corporation is the "winding up" of its affairs. Like with an LLC above, this means amounts due to the corporation are collected and bills are paid. Once this is completed, the corporation files Articles of Termination with the Virginia SCC that end its existence. The Virginia SCC will then return a Certificate stating the effective date of termination to you and the corporation no longer exists.
The above information just relates to the organizational issues involved with terminating your existence. There are also tax issues that must be dealt with as part of this process, which a good CPA should be able to help you navigate.
Posted: July 13th, 2007 at 7:36 am | | Email Post |
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