Experienced Maine business owners know that there are many reasons to dissolve a Maine business. You may need to shut the shop to avoid bankruptcy. As an owner, you may want to retire to a chair on the beach. Or maybe you want to close your Kennebunk clog business to sell strawberries in St. Barth. There are many reasons for a business owner to know how to dissolve a business in Maine. Properly dissolving your business is important to your future success. This is true no matter what the business’s financial situation is. If your business isn’t properly dissolved, you may still need to file taxes, annual reports, and complete other filings.

Failure to properly dissolve your Maine business may also result in fines for you or the company. It could also negatively impact business owners’ or members’ credit and future businesses. To help you navigate the challenge of how to dissolve a Maine business, we’ve compiled some helpful information about Maine business dissolutions.

And to help you prepare for your next venture, our fast, easy Maine limited liability company (LLC) formation service or Maine incorporation service can get you started. We can help make doing business in Maine easy through the whole lifecycle of your business.

Before Dissolving your Maine Business

The document that you file to dissolve your Maine business is called the Articles of Dissolution. When you prepare to file Articles of Dissolution in Maine, you will need to have a clear record of your business information to prevent any delay in closing your doors. If you don’t have a record of all your assets and liabilities, you may encounter difficulty in completing your Maine voluntary dissolution. Keeping a secure and thorough record of all business dealings is important to a speedy wind up of your business.

Step 1: Establish a valuation of your Maine business

Part of dissolving your Maine business means you’ll need to value your real estate, inventory, assets, and anything else your business has. 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. Identifying contracts with third parties and your tax information is especially important.

Our Worry-Free Compliance service can help you throughout the life of your Maine business. Our easy-to-use dashboard keeps your business documents organized to make gathering dissolution information easier.

Step 2: Compile a full account of your Maine business’s debts 

Understanding your Maine business’s debts is essential to dissolving your Maine business. Your debts don’t disappear just because you’re closing your doors! Possible legal repercussions for not taking care of your company’s outstanding debts can 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 locate your personal assets for the company’s unpaid debts

As you can see, it’s very important to understand what your business owes. You definitely don’t want to be the one left having to pay the company’s debts out of your personal funds. Having a handle on this information will help ease the process as you dissolve a Maine corporation or LLC.

Step 3: Identify Maine’s official dissolution document

The process of dissolving your Maine company is slightly different depending on whether your business is an LLC or corporation. If your company is formed as a Maine LLC, you’ll need to file a Certificate of Cancellation with the Maine Secretary of State. This certificate, once filed, cancels the statutory registration of your LLC. You can select normal or expedited filing for this form.

Dissolving your Maine corporation follows a very similar procedure. If your company is a Maine corporation, you’ll need to file Articles of Dissolution. This form confirms, in addition to all other relevant information, that the corporation’s shareholders have voted to endorse the dissolution of the company. Once filed, your Maine corporation can be duly dissolved.

Step 4: Follow instructions in your Maine business’s operating document

Your company’s internal governance documents can be a great guide to a successful Maine company dissolution. Your LLC’s operating agreement or your corporation’s bylaws often contain dissolution instructions. Those instructions can lead you to a clean, easy wind-up of your business.

We can also provide Maine LLCs with templates to help you customize an operating agreement for your business. Having a high-quality operating agreement that has been tailored to your business makes dissolution easier.  Putting a tailored-by-you governance agreement in place from the start makes life so much easier when you move on from your business. But remember, no matter what your governance documents say, you must still file the proper dissolution paperwork with the state.

Step 5: Cancel your Maine business’s permits, licenses, and registrations

To start your Maine business, you likely also applied for and/or paid for a number of federal, state, and local permits, licenses, and registrations. As you think about how to dissolve a business in Maine, you’ll need to terminate each of those licenses and registrations. Some permits and licenses renew automatically each year, so make sure you know renewal dates. Cancel licenses as soon as you’re reasonably able to do so. You don’t want to be stuck with costly renewal liabilities as your business shuts down. You also don’t want your dissolution delayed because of unpaid fees or a registration that did or didn’t properly renew.

Maine business owners are often so consumed with the administrative and logistical affairs of dissolving their Maine LLCs or corporations that they overlook some of their other obligations. When dissolving your Maine business, confirm you understand state and local employment obligations if you have employees. Consult with a Maine employment lawyer if necessary. Sometimes, individual municipalities have specific rules that employers must follow when terminating their workforces or shuttering a physical place of business. Any misunderstanding of the law can delay your ability to dissolve your Maine 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 a Certificate of Cancellation or Articles of Dissolution for your Maine business

After you’ve taken care of all the logistics, located all the paperwork, and taken a vote of the shareholders or members, then you can file the Certificate of Cancellation or Articles of Dissolution. You can file it by mail with the Maine Secretary of State’s office. 

We’re here to help you with your Maine business’s needs

Your Maine business’s needs are going to change through the life of your business. We can help from the day you first get the idea for your Maine business to the day you decide to dissolve it and move on. We can help you quickly and efficiently form your LLC or corporation. Our Worry-Free Compliance service has also helped many business owners keep track of their business documentation, making transitions through the different phases of business a breeze. Whatever your business needs are, we’re here to help you.

Dissolution FAQs

  • Dissolving a business in Maine means filing a Certificate of Cancellation (to dissolve an LLC) or Articles of Dissolution (to dissolve a corporation).

  • It depends on several factors, including the size and complexity of your business, how much work you’ll need to do to get your dissolution documentation in order, and the speed at which you want to file your documents.

  • The size and complexity of your business are factors in how long a dissolution may take. Processing the paperwork through the Secretary of State’s Office takes approximately two to three weeks.

  • A Maine nonprofit can be dissolved through a vote of its members, a board resolution, and by filing dissolution forms similar to for-profit organizations. Nonprofit organizations may want to consider seeking appropriate tax and legal advice before taking steps to lose their not-for-profit status and tax exemption.

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.

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Written by Team ZenBusiness

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