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How To Cancel A Company In The USA?

What is a company dissolution?


A company, whether it is registered as a corporation or a limited liability company is required to dissolve with the secretary of state or division of the corporation formally , if it has decided to discontinue the operation permanently in the state where it was incorporated to conduct business. A company files a dissolution with the singed consent of all stockholders', members and managers of the company.


A company can be dissolved voluntarily by an owner or involuntarily by the state automatically, if it was not renewed on time or did not file the franchise taxes.


What is involved to cancel the company permanently?


All final returns are required to file to the concerned federal and state agencies before filing the article of dissolution, such as a final company returns, payroll returns, final sales tax returns and the franchise tax returns.


A company cannot file dissolution if owe any withholding of sales and payroll taxes. It is a fiduciary duty of a company owner to release all the funds which are held in the trust fund for an employee or the government agency. Additionally, all business permits and licenses are required to cancel prior to dissolve the company.


Bank accounts and credit lines must be closed upon closing the company. In addition, a notification should be sent to customers and vendors about dissolving the company.


There is no standard procedure to close company, rather it depends on each state and the type of entity. For example; in the state of New York, the state issues a consent letter to a close corporation in New York, where as a consent is not applicable to file a dissolution to cancel a limited liability company in New York.


What happens if you do not formally close company?


It is highly recommended to file a formal dissolution of a corporation or an LLC rather than, you presume to informally die itself to avoid the future lawsuits by the vendors or accumulate the outstanding liabilities with the aggregating penalties and interest by the state and federal agencies.