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Business Dissolution Attorneys in Murfreesboro, Tennessee

According to an analysis by Business Insider, over 9,300 retail stores closed in the United States in 2019. A business can close by simply shutting down its operations. However, closing a business legally and in good faith requires dissolving the business thus, ending any responsibility to handle debts, taxes, and other commitments. If you are considering dissolving a business entity, it is important to consult with a knowledgeable Tennessee attorney immediately for proper guidance.

With more than 40 years of combined legal experience, our attorneys at McCarter | East PLLC can help you understand the business dissolution process and determine what best suits your needs. Whether you are dissolving an LLC, corporation, or sole proprietorship, our team can offer you the comprehensive guidance and advocacy you need to navigate key decisions. We are proud to represent business owners throughout Murfreesboro and Berry Hill, Tennessee.

Reasons for Dissolving a Business

Business dissolution can be described as the act of dissolving or closing a business entity formally or legally. Closing a company legally can help you avoid fines, fees, future taxes, or continued liability. Some of the more common reasons businesses close include:

  • Low cash flow

  • Negligent accounting practices

  • Excessive debts through loans

  • Mismanagement of business operations

  • Bankruptcy

  • Disagreements between business partners

  • Failure of succession-planning

  • Product liability

  • Failure to comply with mandates

The process of closing a business will depend on the business structure.

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Dissolving an LLC

The process for dissolving a limited liability company (LLC) in Tennessee involves:

  • Approval from Members: Members of the LLC must approve the dissolution through a vote.

  • Notice of dissolution: A notice of dissolution must be filed with the Division of Business Services (DBS) of the Secretary of State. The dissolution notice should contain the following:

    • The name of your LLC

    • The date of the dissolution meeting where it was approved to dissolve the business

    • The effective date for the notice

  • Winding Up: Once LLC members have voted to dissolve the company and a notice has been filed, there are important tasks that need to be finalized including:

    • Collecting all known debts

    • Paying all known debts

    • Selling, leasing, or transferring all assets and property belonging to the LLC

    • Distributing remaining property and money to LLC members

  • Notice to Creditors: Creditors and other claimants should be notified of the company's dissolution. Tennessee law requires an LLC to notify creditors through a properly written document.

  • Tax Clearance: Obtaining tax clearance isn't necessary to dissolve an LLC. However, you can notify the Department of Revenue ("DOR") through a call.

  • Cancel Permits: All regional, state, city, and county business licenses and permits should be canceled.

Dissolving a Corporation

The process for dissolving a corporation in Tennessee involves:

  • Scheduling a board of directors' meeting to create a resolution to dissolve the corporation

  • Holding a shareholders' meeting to approve the motion to dissolve the corporation

  • Submitting a written Consent to Dissolution and other required annual reports to the Tennessee Secretary of State

  • Paying off any outstanding business debts, administrative fees, and taxes

  • Distributing any remaining property, assets, and money

  • Closing all corporate bank accounts

  • Canceling all regional, state, city, and county business licenses and permits

  • Filing Form 966 (Corporate Dissolution or Liquidation form) within 30 days of approval to dissolve the corporation

  • Canceling the tax account that is connected to the corporation's Employer Identification Number (EIN)

Failure to properly dissolve the corporation can result in continued liability and expense.

Dissolving a Sole Proprietorship

The process for dissolving a sole proprietorship in Tennessee involves

  • Notifying customers and employees that you will be closing

  • Ending all business operations

  • Giving employees their final paychecks

  • Paying all outstanding business debts

  • Canceling any professional or occupational licenses

  • Canceling business permits with local and state authorities

  • Closing any tax accounts connected to the business

Ensuring that each step is accurately performed is critical in releasing the business owner(s) of the ongoing accountability.

Work With Experienced Legal Counsel

Regardless of your entity type, dissolving a business involves a lot of complexities. Steps such as filing the Certificate of Dissolution, filing federal, state, and local taxes, and notifying creditors can make the process even more complicated and overwhelming. While you may have the best intentions, it’s possible that you may overlook a critical step and end up being held responsible for a debt, issue, or situation that you incorrectly believe to have been resolved.

At McCarter | East PLLC, we are dedicated to providing outstanding legal services and comprehensive guidance in matters of business formation and dissolution. Our attorneys can help you file the necessary forms and taxes, address existing liabilities, and help protect your own assets. As experienced Tennessee business dissolution attorneys, we can offer you proper direction and review your options for a streamlined process.

Experienced Business Dissolution Attorneys in Murfreesboro, Tennessee

If you are looking to close or dissolve your business, contact McCarter | East PLLC today to schedule a free one-on-one consultation. Our attorneys can provide you the comprehensive legal counsel and advocacy you need to navigate key decisions. Based in Murfreesboro, Tennessee, and with our office just a stone's throw away from the courthouse, we proudly serve clients throughout Murfreesboro, Berry Hill, and the surrounding areas. Call us today to speak with a skilled business attorney for reliable guidance.