What Is Virginia Dissolution?
If it is time for your Virginia company to cease its business activities, it has to go through the process of dissolution. It includes some necessary steps that will officially end your company’s existence in the state.
Why Does A Company Dissolve?
Why do companies need to dissolve? – All business entities operating within Virginia have to submit paperwork to register their activities. Likewise, the state also requires any company that wants to close to file formal paperwork. Doing this will inform the state that the business entity will no longer be liable for tax obligations.
Who makes the decision to dissolve? – LLCs need the approval of members while corporations require the recommendation of the board of directors and the approval of the shareholders.
How long does it take to dissolve a business? – Finishing all tasks may take weeks. The time frame varies depending on how a company handles each step. Your company may start with the process as soon as it finalizes the decision to close. As for the state, the processing time for the documents may vary depending on the workload of the staff. However, they normally finish in 1-2 weeks.
What Happens If Your Company Does Not Formally Dissolve?
Business entities in Virginia have obligations to the state. They have to file reports and pay taxes. If you do not dissolve your company formally, it will remain liable for the said obligations. Failure to comply with the requirements may lead to penalties.
Steps To Dissolve Your Business
Follow the steps to properly dissolve your Virginia company.
1. File forms with the state – A Virginia LLC has to complete Form LLC-1050 Articles of Cancellation of a Virginia Limited Liability Company. The form must have the signature of a manager or member. It should also state that the company has completed its winding up affairs.
There are 2 types of forms for corporations. If your corporation has not conducted business or issued shares yet, use Form SCC751 Articles of Termination of Corporate Existence. It should have the signature of the majority of the company’s initial directors or incorporators. If your corporation has conducted business and issued shares, use Form SCC7423 Articles of Dissolution and Form SCC750 Articles of Termination of Corporate Existence. These forms should have the signature of the chairman of your company’s board of directors, the president, or other authorized officer.
File appropriate forms with the Corporation Commission by mail or in person.
2. Remove all liabilities and obligations – Your company will have to complete its winding up affairs. Liquidate all company assets and settle its obligations. Follow the priorities based on the outline the law has set.
3. Give notice to any claimants – Send a written notice to known creditors and claimants. Doing this will help limit your liability and allow you to distribute the company’s remaining assets safely. The notice should have information on where and until when they can submit claims. You may also publish a notice in a newspaper to inform other possible claimants.
4. Tax clearance – Business entities do not have to obtain tax clearance. However, you should make sure that your company is current with all its tax dues, as well as the fees and penalties it owes the Corporation Commission.
5. Close all bank accounts, credit lines, permits, and licenses – Contact the bank to find out how to close all accounts and credit lines under the name of the company. You should also cancel all business permits and licenses your company has acquired.
How DoMyLLC can assist with streamlining the process
A business owner usually wants to finish the process as soon as possible, so he or she can move forward. However, the process requires you to handle different tasks. If you want to close your business formally but are not ready to deal with all the steps, you can ask for help. Our team of experts is always ready to provide live support to clients. You can also leave the handling of the Virginia dissolution paperwork to us. We also offer personalized solutions to ensure that the service is right for your company. Contact us now and find out how we can be helpful to your Virginia company.
Virginia Dissolution FAQs
The filing fee for LLC dissolution is $25. You can request same-day processing for $200, or next-day processing for $100.
Corporations that have not issued shares or conducted business have to pay $10. Meanwhile, corporations that have commenced business or issued shares must pay $20 since they have to file 2 forms. Next-day service will cost an additional $50.
No, Virginia does not require businesses to obtain tax clearance.
The normal processing time is 1-2 weeks. LLCs can request a same-day or next-day expedited service. Corporations, on the other hand, can have the next-day expedited service.
The name of your company will be available for other entities to use immediately after the dissolution.
Virginia Business Resources:
Virginia Office of Secretary of State
Virginia State Corporation Commission
1300 East Main Street – PO Box 1197
Richmond, VA 23218