There are various reasons why a business owner decides to close a company. It is one of the toughest decisions that an owner has to make and requires careful consideration. Once you realize that it is time to say goodbye to your company, you have to find out the process that the state has set to close it formally.
What Is Iowa Dissolution?
No matter what the circumstances that led to the decision to close a company may be, a business entity in Iowa must go through the dissolution process. It means that the business owners will deal with all the obligations of the company and will end its existence officially.
Why Does A Company Dissolve?
Why do companies need to dissolve? – Iowa requires all companies operating in the state to file paperwork to register the business. Likewise, your company will also have to submit formal paperwork to inform the state that your business will no longer exist and that it has no more reporting and tax obligations.
Who makes the decision to dissolve? – Members of LLCs get to decide if the company has to dissolve or not. Corporations require the board of directors to adopt and recommend a resolution. This resolution will go through the voting of shareholders.
How long does it take to dissolve a business? – The state may take 3 days to process the documents, depending on the workload. However, your company may have to spend weeks to finish all the steps and deal with all its responsibilities. The time frame will depend on how you handle the tasks.
What Happens If Your Company Does Not Formally Dissolve?
Your company will remain active until you dissolve it formally. Thus, it will have to submit biennial reports and fees. Failure to do so may create problems with the state.
Steps To Dissolve Your Business
If you wish to dissolve your business entity, you should follow the process in the state of Iowa.
1. File Articles of Dissolution with the state – Iowa LLCs have to submit a Statement of Dissolution. The state offers no form for these businesses. State the company name and that it has dissolved. Your company will still exist until you finish winding up. After that, your company has to file a Statement of Termination. It includes the company name and states that the company has terminated its activities. On the other hand, corporations need to file Articles of Dissolution. File the documents with the Business Services Division of the Secretary of State by mail, fax, or in person.
2. Remove all liabilities and obligations – Assign one or a team of members or managers to handle the winding up of your company. They can liquidate the assets of your company and remove all liabilities depending on the order of priorities that the law has outlined. Then, they can distribute any remaining assets depending on the interests of members or shareholders.
3. Give notice to any claimants – Notify everyone who may have a claim against your company. You may send a written notice to known claimants. Check your company’s records to find out where and to whom you should send the notice. Make sure you clarify the deadline for the submission of claims. You can also publish the notice in a newspaper to inform unknown claimants. The publication can also serve as evidence in case someone submits claims after the deadline.
4. Tax clearance – Iowa does not require business entities to obtain tax clearance. However, you have to make sure your company has paid for all its taxes and other fees. For federal tax purposes, you may also have to check the final tax return box on the IRS form of your company.
5. Close all bank accounts, credit lines, permits, and licenses – All business accounts will not be useful even if you start a new business. Close them to avoid liabilities and obligations that may lead to legal issues. Additionally, check if your company has secured business permits and licenses. If it did, cancel all of them to protect your reputation and save you from fiscal obligations.
How DoMyLLC can assist with streamlining the process
If you have decided to close your business in Iowa, you may find our services helpful. We offer personalized solutions so you can expect the service to fit your company’s needs. You can also rely on the live support service from our team of experts. Contact DoMyLLC now and find out how we can assist your Iowa company with the Iowa dissolution process.
Iowa Dissolution FAQs
The filing fee for LLCs is $5 for the Statement of Dissolution and another $5 for the Statement of Termination. Corporations need to pay $5 for the filing of its Articles of Dissolution.
Do You Need The Department Of Revenue Clearance Before The Secretary Of State Will Accept Your Dissolution?
No, your company does not need clearance.
The Secretary of State may take 1-3 days to process your company’s documents. But, if you submit in person, you can request expedited processing and wait for them to finish on the same day.
Iowa does not implement name protection for companies that dissolve voluntarily. Thus, your company name will be available after you file the documents.
Iowa Business Resources
Iowa Office of Secretary of State
Office of the Secretary of State
First Floor, Lucas Building 321 E. 12th St.
Des Moines, IA 50319