Business owners choose to dissolve for many different reasons. From retirement to avoiding bankruptcy to starting a new venture, the decision to dissolve isn’t always easy. However, it’s incredibly important to follow each step of the dissolution process so that your business is officially dissolved. Otherwise, your company still exists and the state expects tax payments, annual reporting, and other requirements of doing business in Louisiana. Failure to meet these requirements could result in fines and penalties and negatively impact your credit and future business ventures. In this article, we’ll explain how to dissolve a business in Louisiana and which of our tools and services can help.
If you want to form a business in Louisiana, we offer both Louisiana limited liability company (LLC) Formation Service and Corporation Formation Services. We can help you start your Louisiana business today!
To dissolve a Louisiana business, you need a lot of information about your company. From business dealings to tax filings, having access to your records will make the process much smoother. That’s why establishing a secure, thorough, and accurate record of all business activity is so important. With our Worry-Free Compliance Service, we keep your business documents organized on your personalized ZenBusiness dashboard. This means that you have access to what you need when you need it.
Having a valuation of your business is an important first step in the dissolution process. The economic worth of your company gives an idea of how much you have to pay off business debts and what may be distributed to the owners in the end. Generally speaking, the valuation is made up of assets, profits, earnings, debts, and losses. You have to account for everything, including real estate, inventory, accounts receivable, equipment, etc. Gather all documents related to business operations, especially contracts with third parties and tax information. Remember, when you use our Worry-Free Compliance service, we store and organize your business documents on our easy-to-use dashboard.
There are several different ways to value a business. If you’re unfamiliar with the valuation process, don’t hesitate to bring in a professional to ensure that your valuation is accurate.
Debts are an important component of a business’s value. You need to take into account everything you owe, how much you owe, and to whom you owe it to. Just because you’re closing your business, doesn’t mean your debts go away. There are significant legal repercussions, such as personal liability, for not satisfying business debts.
To formally dissolve a Louisiana business, you have to file the appropriate dissolution paperwork. The Louisiana Secretary of State’s Commercial Division handles all business filings. You can submit the forms either online, in person, by mail, or by fax. Make sure you include the correct filing fee or the office won’t accept your documents. Since the fees change from time to time, check the fee schedule for the most accurate filing fee amounts.
To dissolve a Louisiana LLC, file an Affidavit to Dissolve Limited Liability Company. You must include the LLC’s name and an authorized signature. The form also needs to be notarized. Once the Commercial Division processes the affidavit, you’ll receive a Certificate of Dissolution.
While some states call them Articles of Dissolution, the form you need to file to dissolve a Louisiana corporation is called Simplified Articles of Termination. Now this form is only for corporations that are no longer doing business, owe no debts, have no assets, and have no immovable property. To complete the form, include the corporation’s name and select whether the corporation has issued shares or if it’s not doing business. You also need an authorized signature and notarization of the document. After filing and processing, the Commercial Division will send you a Certificate of Termination.
If your Louisiana corporation has assets, debts, or immovable property, you have to go through the long form dissolution process. The Secretary of State advises that you consult with an attorney if you need to do this because Louisiana’s corporation law is complex.
An operating document sets the groundwork for any business. LLC’s have an operating agreement and corporation use bylaws, but their purpose is the same. An operating document outlines everything including the company’s organization, management, voting process, distributions, capital contributions, and membership requirements. It also typically includes instructions on how to dissolve the business. Often, there needs to be unanimous approval to initiate a Louisiana voluntary dissolution, but each company is different.
If your business doesn’t have an operating document, your process defaults to Louisiana law. Ultimately, no matter what your corporate bylaws or LLC operating agreement says, you must still file the proper dissolution paperwork with the Secretary of State.
To do business in Louisiana, just about every company needs some combination of business licenses, permits, certificates, or registrations. Sometimes these authorizations automatically renew, even if you dissolve your Louisiana business. It’s your responsibility to contact the federal, state, or local agency that issues the permit or license and cancel it. Otherwise, you might be stuck paying renewal fees for something you no longer need.
There’s a lot more to the dissolution process than just filing paperwork. All of your business’s legal and financial obligations are still there and need to be taken care of. Here are just a few examples of things you need to do as part of the dissolution process:
You also have certain legal obligations to your employees — such as paying final wages and other earned benefits after the business closes. It’s important that you comply with federal and state employment law. If you need some guidance, consider hiring an accountant or lawyer to help.
Filing the dissolution paperwork with the Secretary of State is how you officially dissolve your Louisiana business. But at this point, there’s probably still work to do in terms of closing up the business. Your company now exists only for the purpose of tying up loose ends, such as closing business bank accounts and distributing remaining assets. You can’t transact any more business once you file your Affidavit to Dissolve or Articles of Termination.
Dissolving a business takes time and organization. Although there are several steps to the process, it’ll run smoothly as long as you have all of the information and documents you need. Don’t be afraid to call in professionals if you’re unsure about anything. Properly dissolving your business will protect you against personal liability. As always, we’re here to help you with our wide range of business formation and compliance tools and services.
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.
Dissolving a Louisiana business is a multi-step process. To dissolve on paper, you need to file the appropriate dissolution document with the Louisiana Secretary of State Commercial Division. Once you’ve done that, you have to close out every business matter from canceling licenses and permits to paying off debts to closing the business bank account.
There are fees for filing paperwork with the Secretary of State’s office. Since these amounts can change, it’s best to check their fee schedule for accurate amounts.
You may also have costs associated with hiring professionals to help with the dissolution process. For example, you might pull in a valuation expert to help determine your company’s worth. Maybe you need an accountant to look over your finances to figure out how to pay off debts. Or you may want an attorney to advise you on tax laws. It’s difficult to give an average cost to dissolve since each business has different needs.
This varies based on the size of the business and how long it takes to go through each step of the dissolution process.
In terms of processing time to file the dissolution paperwork, typically you’ll have a quick turnaround time if you file online. However, it all depends on the Secretary of State’s current workload.
To dissolve a nonprofit organization in Louisiana, file an Affidavit to Dissolve Corporation with the Secretary of State’s Commercial Division. The affidavit must include the nonprofit corporation’s name and an authorized signature. The form needs to be notarized and filed with the appropriate filing fee. Once the Commercial Division processes the paperwork, you’ll receive a Certificate of Dissolution. You can mail, fax, hand deliver, or file the form online.
As with any other business, you still have to wrap up the rest of the business matters to completely dissolve.
Louisiana Business Resources
Business Dissolution by State