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 North Carolina, the dissolution of a limited liability company (LLC) or corporation involves several legal steps. The business owner must file articles of dissolution with the North Carolina Secretary of State's office. This is a formal declaration of the business's intent to dissolve. Prior to this, the company must settle its debts to both secured and unsecured creditors, ensure that all obligations to employees are met, and address any final tax responsibilities with state and federal tax authorities. The process also includes winding up the business affairs, which involves collecting assets, disposing of properties that will not be distributed to members or shareholders, discharging liabilities, and distributing any remaining assets. Additionally, the business must terminate its tax reporting obligations and cease paying annual registration fees. It is important for a business owner to understand the legal and financial implications of dissolving a business, and it may be advisable to consult with an attorney to ensure compliance with all relevant laws and regulations.