New York Dissolution
If you are thinking of putting an end to the business operations of your company, you need to understand that there is a process that you need to follow. The process may be different depending on the state where you formed your company. However, you will have to go through with it to protect yourself from possible problems that may occur.
What Is New York Dissolution?
Formally closing a business in New York involves the process known as dissolution. It involves a variety of tasks that your company must accomplish to formalize its closure.
Why Does A Company Dissolve?
Why do companies need to dissolve? – New York requires business entities to file paperwork to formally dissolve the company. It will officially end a business entity’s existence as a state-registered company. It can also help put the company beyond the reach of creditors and claimants.
Who makes the decision to dissolve? – The decision for LLCs relies on the members, while corporations require the vote of shareholders on a resolution that the board of directors approved and recommended.
How long does it take to dissolve a business? – How long it will take to dissolve the company will depend on the preparation of documents and settling of all its obligations. Once you submit the documents to the state, you can expect another 7 business days for processing.
What Happens If Your Company Does Not Formally Dissolve?
Business entities that fail to dissolve properly will still have obligations to the state. Thus, the state will be expecting you to continue to file annual reports and pay taxes. The Department of State does not impose penalties for failure to file reports. However, it may put your company in the delinquent status.
Steps To Dissolve Your Business
Make sure you follow each step carefully to avoid having problems in dissolving your New York company.
1. File Articles or Certificate of Dissolution with the state – To formally dissolve an LLC in New York, a company has to submit a completed Articles of Dissolution form. A corporation has to file a Certificate of Dissolution. Companies should file these with the Department of State by mail, fax, or in person. Corporations have to include 2 copies of written consent to dissolve, which will come from the Department of Taxation and Finance. If your corporation has conducted business in New York City, you will have to obtain consent from the New York City Department of Finance.
2. Remove all liabilities and obligations – Under the LLC Act of New York, 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. It states that a corporation that wants to dissolve should fulfill or close contracts, collect its assets, dispose of its properties that it cannot distribute in kind, make provisions to pay for its liabilities, and distribute the remaining assets among shareholders depending on their interests.
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 or publish a notice in a newspaper of general circulation once a week for at least 2 consecutive weeks. It should describe what type of information they should include in the claim, where they can send the claim, and the deadline, which is usually six months after the date of the publication.
4. Tax clearance – New York does not require LLCs to get a tax clearance before the dissolution. However, corporations need written consent from the Department of Taxation and Finance. Corporations that have conducted business in New York City will also have to get consent from the Commissioner of Finance.
5. Close all bank accounts, credit lines, permits, and licenses – Once you officially closed your business and finished dealing with all its responsibilities, close all bank accounts under the company name. It will also be best for your company to contact agencies and cancel all the permits and licenses with them.
How DoMyLLC can assist with streamlining the process
The steps can be a bit overwhelming for beginners. Aside from this, it takes a lot of time. That is why we’re here to help. We offer personalized solutions and live support. Ensure that your company legally and formally closes without hassle. Contact DoMyLLC now and let us help you dissolve your New York company properly.
New York Dissolution FAQs
The filing fee for the dissolution of a business entity is $60, there is an additional $10 fee for a certified copy. Expedited processing requires an additional $25 for 24 hours, $75 for same-day service, and $150 for two-hour processing.
LLCs do not, but corporations do.
Normal processing takes 7 business days. You can request for a 24-hour expedited service if you submit during between 9 am and 4 pm. The same-day processing is for in-person and fax filings before noon. The state may also offer 2 hour expedited processing for in-person and fax filings they receive by 2:30 pm.
Other business entities can immediately use your company name the day after the dissolution.
New York Business Resources:
New York Office of Secretary of State
New York Department of State
99 Washington Ave. 6th Floor
Albany, NY 12231