Steps to Dissolve Your Connecticut Business Today
- Establish a valuation of your Connecticut business
- Compile a full account of your Connecticut business’s debts
- Identify Connecticut's official dissolution document
- Follow instructions in your Connecticut business’s operating document
- Cancel Connecticut business’s permits, licenses, and registrations
- Wrap up Connecticut business’s legal and financial obligations
- File a Certificate of Dissolution or Articles of Dissolution for your Connecticut business
Dissolution is the method of formally terminating a company’s existence. This action can be either voluntary or involuntary. Voluntary dissolution occurs if all the members decide to end the business. It’s involuntary if a court orders a business to dissolve over some or all its members’ objections. In this article, we’ll be talking about how to voluntarily dissolve a Connecticut business.
There are many reasons to dissolve a business. Life happens and things change. Market crashes may require you to close the business to avoid bankruptcy. You may choose to retire, in which case, congratulations! Dissolving your business may also give you the freedom to pursue a new business venture.
If the business isn’t formally terminated through the dissolution process, the state will continue to expect payment for taxes, annual reports, and more. You could end up being responsible for late fees and penalties if the business still exists on the books. This lack of compliance could also negatively impact your credit and potential for future business ventures.
If you’re looking to form a new business, we can assist you with our Connecticut limited liability company (LLC) formation service or corporation formation service.
Before dissolving your Connecticut business
Organization is the key to a successful business and a successful business dissolution. It’s important to keep up with all Annual Reports, amendments, and other recorded documents while the business is operating. Maintaining accurate financial records and business dealings can be the difference between smooth sailing and a potential hurricane.
Step 1: Establish a valuation of your Connecticut business
The accurate valuation of your company is important. You want to ensure that you understand the resources available to pay off debts, distribute assets, or understand what you may be able to offer to potential buyers. This can be a large undertaking and you may want to consider hiring a professional to help with valuation. Make sure to gather documents related to your business contracts with third parties and all tax information. Our Worry-Free Compliance dashboard keeps all of your business documents organized so that this information is much easier to find.
Step 2: Compile a full account of your Connecticut business’s debts
Unfortunately, dissolving your business doesn’t mean your debts disappear. Determine who you own and how much you owe them. Failing to pay all debts upon or prior to dissolution could result in litigation and the ability for a creditor to pierce the corporate veil. This means that the court may hold individuals, rather than the business entity, personally liable for the debt.
Step 3: Identify Connecticut’s official dissolution document
Whether your business is a limited liability company or a corporation will determine which dissolution document you need to file with the Connecticut Secretary of State.
- Corporation: Certificate of Dissolution
- Limited liability company: Articles of Dissolution
You may submit your Connecticut business dissolution paper online, in person, or by mail.
Step 4: Follow instructions in your Connecticut business’s operating document
Your corporation’s bylaws or limited liability company’s operating agreement are legally binding documents that govern how your company conducts business. Well thought-out operating documents often include strategies for the dissolution of the company. If there are no instructions, your business will need to follow state law.
If you haven’t drafted an operating agreement for your limited liability company, consider using our operating agreement template, to help make sure you don’t miss anything important. Operating documents allow your business to function according to your specific needs, rather than relying on state processes. Regardless of your operating documents, you still need to file dissolution paperwork with the state.
Step 5: Cancel Connecticut business’s permits, licenses, and registrations
Just like those streaming services you meant to cancel after the trial period, automatic renewals can sneak up on you. Make sure to cancel all licenses and permits associated with your business. No one wants to be hit with a charge for that thing they forgot to cancel.
Step 6: Wrap up Connecticut business’s legal and financial obligations
Wrapping up the last bit of business involves fulfilling all remaining obligations. Make sure that your employees are compensated in accordance with federal and state laws. File your final state and federal tax returns. After you have done that, cancel the business’s employer identification number (EIN).
Step 7: File a Certificate of Dissolution or Articles of Dissolution for your Connecticut business
Once all the details are taken care of, file the appropriate dissolution paperwork to officially dissolve your Connecticut business. File your dissolution document online using the Connecticut state government website business portal, or you can submit it via mail or in-person.
We are here to help support your Connecticut business
We are here to help you with your Connecticut business needs from formation through dissolution. Our LLC or corporation services can help you form your business quickly and properly. Our Worry-Free compliance service and dashboard also help you stay organized every step of the way. Whatever your business needs, we are here to help.
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 Connecticut?
File a Certificate of Dissolution or Articles of Dissolution for your Connecticut business.
- How much does it cost to dissolve an LLC in Connecticut?
Fees are subject to change and can be found on the state business website.
- How long does it take to dissolve an LLC in Connecticut?
Processing typically takes three to five days. The wrapping up process depends on the size and scope of your business.
- How do I dissolve a nonprofit organization in Connecticut?
Draft a proposal to dissolve. Once the proposal is affirmed, file a Certificate of Dissolution with the Secretary of State.