A business owner may decide to dissolve the business for a variety of reasons, ranging from the business not being profitable to wanting to retire and not being able to sell the business or have a family member take over the business.

Dissolution of a business operating as a limited liability company or corporation will usually include filing articles of dissolution with the secretary of state’s office.

A business owner wanting to dissolve a company may want to wind up the business’s affairs, terminate its tax reporting obligations and the payment of annual registration fees, and liquidate any remaining assets.

But a business owner should understand the implications of these actions and the business’s obligations to secured and unsecured creditors, employees, and state and federal tax authorities.

In Delaware, the dissolution of a limited liability company (LLC) or corporation involves several legal steps. The business owner must file Articles of Dissolution with the Delaware Secretary of State's office. This is a formal declaration of the business's intent to dissolve. Prior to filing, the company must settle its debts, obligations, and handle the distribution of remaining assets. This process is known as 'winding up' the business. The company must also notify its creditors, settle claims, and comply with state and federal tax authorities by filing final tax returns and paying any outstanding taxes. It's important to adhere to the specific requirements set forth by Delaware law to ensure that the dissolution is handled properly and to limit potential liability for the business owners. An attorney can provide guidance on the dissolution process, including the proper notices to creditors, compliance with tax obligations, and the distribution of assets to ensure that all legal requirements are met.