Connecticut Dissolution

Make sure you follow each step of Connecticut dissolution carefully to avoid having problems.

1. File Articles or Certificate of Dissolution with the state – To formally dissolve a business entity in Connecticut, the business owner has to submit Articles of Dissolution for LLCs and Certificate of Dissolution for Corporations. Companies should file these with the Secretary of State Commercial Recording Division. The state offers ready-to-use forms, but your company may also draft its own as long as it includes all the necessary information. You may submit the documents by mail, fax, or in person.

2. Remove all liabilities and obligations – Under the LLC Act of Connecticut, an LLC should prosecute and defend lawsuits, settle its business, dispose of or transfer its properties, remove its liabilities, and distribute the remaining assets to the members.

On the other hand, corporations must follow the Business Corporation Act of Connecticut. It states that a corporation that wants to dissolve should collect its assets, dispose of its properties that it cannot distribute in kind, remove or make provisions to pay for its liabilities, and distribute the remaining assets among shareholders depending on their interests. Additionally, the law also states that there’ll be no final liquidating distribution of the company’s assets to shareholders before it obtains a statement from the Department of Revenue Services and the administrator of the state’s unemployment compensation law, which indicates that:

•   The company has already paid all its taxes and contributions;
•   It wasn’t liable for any tax or contribution;
• Or, it made adequate provisions for the payment of unpaid taxes and contributions in the future.

3. Give notice to any claimants – This task is optional. However, it’ll help limit your liability and allow you to distribute company assets safely. Under state law, your company can send a written notice directly to known claimants. It should describe what type of information they should include in the claim, where they can send the claim, and the deadline, which shouldn’t be fewer than 120 days from the effectivity date of the notice. You should also make sure they know that your company will no longer accept claims after the deadline.

4. Tax clearance – Connecticut doesn’t require business entities to acquire a tax clearance before the dissolution. But your company will still have to pay for the business entity tax for the year that you formed it and for the years that it’s registered with the Secretary of State.

5. Close all bank accounts, credit lines, permits, and licenses – Once you officially closed your business and finished dealing with all its responsibilities, you’ll no longer be able to use the bank accounts and credit lines under the company name. Thus, you may have to close them. Contact your bank about this process.

It’ll also be best for your company to contact agencies and cancel all the permits and licenses with them.