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Why is filing a business dissolution important in New Jersey?

Sometimes, New Jersey business owners decide to close. But, they may make the mistake of failing to inform the state of their business dissolution. This is an important clerical maneuver because it will remove the company from the tax and public records.

For businesses that were formed before March 20, 2013, a domestic corporation will use dissolution, while a limited liability company (LLC), limited liability partnership or limited partnership will cancel. Foreign corporations will withdraw. Businesses formed on or after that date must dissolve and terminate.

With dissolution, the LLC has the chance to clear their affairs prior to ending the business. It is also possible to do both at the same time. For any of these methods of closing, the business must be in good standing. Once all payments, information and a tax clearance certificate with a for-profit entity have been received, the closing of the business goes into effect. Failure to dissolve the corporation, according to the law, can cause problems.

Failure to dissolve the business can lead to taxes, penalties and interest. When the New Jersey State Treasurer, through the Division of Revenue, is notified that the business has been discontinued, the dissolution will be considered filed and effective. When this is not done, and necessary payments have not been made, the case will be sent for collection action. This can lead to debts and fees that would otherwise not be assessed, if the dissolution was done as the state law requires.

It is not unusual for there to be a business dissolution in New Jersey. Some companies make the mistake of failing to file the proper paperwork and inform the relevant agencies that they have moved forward with the dissolution of a business. For assistance, with a business dissolution, it is important to have legal help to avoid these obvious mistakes that can end up being very costly. A legal professional can help with this matter of due diligence.

Source: NJ.us, "Dissolve, Cancel, Or Withdraw A Business," accessed on Aug. 8, 2017

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