Steps to Dissolve Your Colorado Business Today
- Establish a valuation of your Colorado business
- Compile a full account of your Colorado business’s debts
- Identify Colorado’s official dissolution document
- Follow instructions in your Colorado business’s operating document
- Cancel your Colorado business’s permits, licenses, and registrations
- Wrap up your Colorado business’s legal and financial obligations
- File your Certificate or Statement of Dissolution for your Colorado business
As a Colorado business owner, you may have any number of reasons for wanting to dissolve your business. Sometimes, it’s time to dissolve your business because you’re ready to retire or open a new venture. In other cases, you need to know how to dissolve a business to avoid bankruptcy. Regardless of your business’s financial position upon closing, proper dissolution of your business is extremely important to your future success. If your business isn’t properly dissolved, the state may still expect you to file taxes, annual reports, and other routine paperwork and penalize or fine you if you don’t.
If you fail to properly dissolve your Colorado business, it could also negatively impact business owners’ or members’ credit and future business ventures. This is problematic if you’re closing your doors to open a new business. To help clear up confusion about Colorado voluntary dissolution, we’ve put together some helpful information about how to dissolve a business in Colorado.
An important thing to remember as you get ready to form your next company is that we can help you file your formation paperwork. Our fast, easy Colorado limited liability company (LLC) formation and Colorado incorporation services can help make doing business in Colorado easy from formation to dissolution.
Before dissolving your Colorado business
When you prepare to file Articles of Dissolution in Colorado, which is the key document that tells the state you want to close your business, you will need to have a clear record of your business information to prevent any issues in closing your doors. If you don’t have a record of all your assets and liabilities, you may encounter difficulty in dissolving your Colorado business. Don’t put yourself in that situation. Keeping a secure and thorough record of all business dealings is important.
Step 1: Establish a valuation of your Colorado business
When dissolving your Colorado LLC or corporation, you’ll need to value your real estate, inventory, assets, and basically anything of value within your business. Don’t be afraid to hire a professional if you’re not sure how to value things. You’ll also need to gather all documents related to business operations. Focus especially on locating your contracts with third parties and your tax information.
Our Worry-Free Compliance Service can help you throughout the life of your Colorado business. Our handy dashboard keeps your business documents organized to make gathering dissolution information easier.
Step 2: Compile a full account of your Colorado business’s debts
Part of preparing to dissolve your Colorado business means understanding your company’s debts. Just because you’re closing your business doesn’t mean debts disappear. Possible legal repercussions for not handling your company’s outstanding debts include:
- Creditors holding members and owners of the company personally liable for the company’s debts during dissolution
- Creditors holding you personally liable if debts aren’t paid
- Creditors attempting to pierce the corporate veil to locate your personal assets
As you can see, it’s very important to understand what your business owes as you go to close your doors!
Step 3: Identify Colorado’s official dissolution document
Dissolving your Colorado LLC is a straightforward process. First, you’ll need to find your business’s information on the Colorado Secretary of State’s business search tool. Then, you’ll need to complete the online Statement of Dissolution. This form can only be completed and submitted online to the Secretary of State.
Dissolving your Colorado corporation is a very similar process. You’ll need to locate your business information using the Secretary of State’s search tool. Once you’ve done that, you can access a pre-filled Certificate of Dissolution form. Once completed and signed, you’ll be able to submit that form online to the Secretary of State. There’s no paper form or mailing option for the Certificate of Dissolution.
Step 4: Follow instructions in your Colorado business’s operating document
Your Colorado company’s own governance documents can help guide you to a successful Colorado dissolution. Your LLC’s operating agreement or your corporation’s bylaws may even contain dissolution instructions.
Don’t have a governing document in place? We offer LLC operating agreement templates to help you customize an operating agreement during the formation process. But remember, no matter what your governing documents say, you must still file the proper dissolution paperwork with the state.
Step 5: Cancel your Colorado business’s permits, licenses, and registrations
When you formed your Colorado LLC or corporation, you probably applied for a variety of permits or licenses. As you think about how to dissolve a business in Colorado, you’ll need to terminate those licenses. Some permits and licenses renew automatically each year, so make sure you know the renewal dates. As soon as you know you will be dissolving your business, cancel licenses as soon as you’re able to do so. You don’t want to be stuck with costly automatic renewals!
Step 6: Wrap up your Colorado business’s legal and financial obligations
As you wind up your affairs, confirm whether you have any employment law obligations to your employees. Consult with a Colorado employment lawyer if necessary. Be certain you understand any rules pertaining to terminations and layoffs, since any misunderstandings or lawsuits can delay your ability to dissolve your Colorado business.
You’ll also need to file final tax returns. This includes both state and federal returns, if applicable. Once that is complete, you’ll be able to cancel the business’s Employer Identification Number (EIN).
Step 7: File your Certificate or Statement of Dissolution for your Colorado business
While we already told you what a Certificate or Statement of Dissolution is, it’s important to note that you need to take care of all the business wind-up logistics before filing it. Once you’ve taken care of valuing the business, terminating all the employees, filing all the tax returns and paperwork, and settling all the businesses debts, then you can file your Certificate of Dissolution. You need to file it electronically with the Colorado Secretary of State.
We’re here to help you with your Colorado business’s needs
Let us take some of the complicated business compliance tasks off your shoulders. We can help you form your LLC or corporation. Our formation services take care of this for you quickly and efficiently so you can focus on the business you love. Our Worry-Free Compliance Service has also helped many business owners keep track of all their business documentation, making transitions through the different phases of business a breeze. Whatever your business needs are, we’re here to help you move from one phase of growth to the next.
Disclaimer: The content on this page is for information purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
- How do I dissolve a business in Colorado?
Once you’ve gathered all the appropriate information and settled all the business’s debts, you dissolve a Colorado business by filing a Statement of Dissolution or a Certificate of Dissolution. The document you file will depend upon your business type.
- How much does it cost to dissolve an LLC in Colorado?
The cost depends upon your business entity type and the complexity of your business.
- How long does it take to dissolve an LLC in Colorado?
Timing to dissolve a Colorado business can vary greatly. Processing of a Statement of Dissolution by the Secretary of State is generally completed within a few business days. However, the work of preparing to file the Statement of Dissolution can take months.
- How do I dissolve a nonprofit organization in Colorado?
A charitable organization can withdraw its Colorado registration by completing a form and submitting it to the Colorado Secretary of State.