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What steps should you take in the dissolution of a business?

New Jersey residents start businesses to make a profit. However, not all businesses stay open for decades at a time. Sometimes, it becomes necessary to close a business down, also known as "dissolving" or "winding up" the business. This isn't always a bad thing, as in some cases it means that the inventory of the business has been sold and the business owner is all set to retire. Or, maybe it is because the assets and employees of the company will merge with another company in a business purchase.

But, what do business owners need to know about business dissolution? Well, as our readers can probably imagine, there are quite a few steps to consider in this process. And most of those steps have to do with finances.

First, it is important for companies that are dissolving to get the right information that they need from the Internal Revenue Service to ensure that they are in compliance with tax laws. Next, it is important to get a complete view of the company's assets, and then decide how those assets will be distributed, sold or donated. After that, companies will need to makes sure that any and all outstanding debts are paid.

Most companies will need to contact the New Jersey Secretary of State in order to inform that government entity that certain trade names will no longer be in use. The Secretary of State may also require additional filings, such as articles of dissolution. Companies in New Jersey that follows these steps in the dissolution process will be in good shape, but it can be important to get more information about the potential business law issues that can pop up in the process.

Source: FindLaw, "Dissolution and Winding Up Checklist," Accessed May 29, 2017

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