Business owners sometimes come to a point when they ask themselves if it is still right to continue the company or if it is time to call it quits. That is a hard decision that requires a lot of thinking. However, when you have made up your mind, it is necessary to ensure that the company follows the procedure to end its activities properly.
What Is Hawaii Dissolution?
What is known as dissolution refers to the process a company has to go through to formally close. It is when the owners end the company’s operations and deal with all its obligations.
Why Does A Company Dissolve?
Why do companies need to dissolve? – When you organized your company in Hawaii, you went through a process to register it with the state. Likewise, the state requires companies to file paperwork to close their businesses. The filing will inform the state that the company will no longer be in business and will not have any more liability to pay annual fees and taxes.
Who makes the decision to dissolve? – The approval of members is necessary to dissolve an LLC in Hawaii. Meanwhile, the board of directors of a company should draft and approve a resolution. The shareholders have the final say and will vote to approve or deny the dissolution. Make sure the company has a record of the decision.
How long does it take to dissolve a business? – The time frame to finish the whole process may take days or weeks. It will depend on how long it takes the company to deal with all its responsibilities. As for the state, it normally takes 5 days to process dissolution filings once submitted.
What Happens If Your Company Does Not Formally Dissolve?
Your company will continue to exist until the dissolution is filed with the state. Thus, it will continue to be responsible for filing annual reports and paying for business taxes. Failure to file the report and pay for the fee will lead to penalties.
Steps To Dissolve Your Business
Business entities in Hawaii have to go through certain steps to dissolve formally.
1. File Articles of Dissolution with the state – Hawaii LLCs that want to dissolve have to fill out Form LLC-11 Articles of Termination. Corporations have to use Form DC-13 Articles of Dissolution. File the proper form by mail, fax, or in-person with the Department of Commerce and Consumers Affairs Business Registration Division.
Filing by fax requires legible signatures, filing fee, credit card and contact information of the sender, and a clear specification if it will be a regular or expedited processing.
2. Remove all liabilities and obligations – Liquidate all the assets of the company and settle its obligations depending on the rights and interests. You also have to take care of all lawsuits, actions, and proceedings. Dispose of or transfer the properties and distribute the remaining assets.
3. Give notice to any claimants – Sending a notice to claimants may help limit your liability. It will also let you distribute assets safely. Make sure the notice includes information on where and until when they can submit claims. You may also publish a notice in a newspaper to inform unknown claimants about the company’s dissolution.
4. Tax clearance – Business entities in Hawaii do not have to obtain tax clearance to dissolve. However, your company has to settle all its taxes and fees. You must certify that it has paid or closed out its debts and obligations. Additionally, you should also include in the certification that you have distributed the company’s properties according to the rights and interests of members or shareholders. Lastly, you should also certify that there is no pending litigation against the company.
5. Close all bank accounts, credit lines, permits, and licenses – You have to close all accounts under the name of your Hawaii company to prevent any liability and obligations that may possibly lead to legal problems in the future. Furthermore, your company has to cancel its permits and licenses. Failure to do so may lead to fiscal obligations or reporting.
How DoMyLLC can assist with streamlining the process
The process of Hawaii dissolution may be too much for a person to handle. You may need the services of an expert to help you deal with each step. If you wish to have a personalized solution that is suitable for the needs of your company in Hawaii, contact DoMyLLC now.
Hawaii Dissolution FAQs
Your company will have to pay for the $25 filing. Expedited processing requires an additional $25.
No, you do not need to secure clearance.
Normal processing takes around 5 business days, while expedited service takes about 1-3 business days.
Once the state processes your company’s documents, the business name will be available for other entities to use.
Hawaii Business Resources
Hawaii Office of Secretary of State
Department of Commerce and Consumer Affairs
PO Box 40
Honolulu, HI 96810