No matter what kind of business you have, there are times when you need to close it down and move on. Dissolution is part of the lifecycle of a business. Maybe you want to dissolve the business to avoid bankruptcy. Maybe your partnership didn’t work out. Or maybe you’re ready to retire or open a new business venture. Whatever the case, whether the business has a positive financial situation or has lots of debt, dissolution is important when it’s time to close your business.
If the state doesn’t know that the business has dissolved, it will expect it to pay taxes, file annual reports, and renew its licenses. This could lead to possible fines and financial penalties for the individual owners or members as well as the business. It could negatively affect your credit or future business ventures. Luckily, we have experience with business dissolution and can help you dissolve your New Hampshire business properly. We’ve compiled this list of steps for you to learn how to dissolve a business in New Hampshire.
If you haven’t yet formed a business, we have experience with that, too. In fact, our team of experts can help you form a New Hampshire limited liability company (LLC) or start a New Hampshire corporation. Start your business with us today, and we’ll be there for you every step of the way.
When you started your business, you likely didn’t think much about what would happen when it was time to close the business. But work now saves work later. It’s important to establish a secure and thorough record of all your corporate or LLC dealings. This includes information about customer accounts, employees, and third-party contracts. It’s also important to keep your tax records in a similar, secure location. The more organized your business records are now, the less you’ll have to worry about gathering them later.
To begin a New Hampshire voluntary dissolution, you’ll start by establishing the value of your business’s assets. First, you’ll collect all the documents related to business operations, especially third-party contracts and tax information. Then, you’ll determine the value of everything the business owns, including all the real estate, inventory, and goodwill you’ve formed.
If you’re not sure how to value things, you can hire a professional. Hiring a CPA or other business valuation professional can save you time and worry during this step. When you sign up for our Worry-Free Compliance Service, in addition to keeping your business in good standing during its operation, we’ll keep your business documents organized and make gathering all this information easier.
After you’ve valued the business’s assets, you need to compile a full account of the business’s debts. You need a good grasp of how much and who you owe. Just because you’re closing your business doesn’t mean debts go away. As an owner, member, director, or officer, you have a responsibility to properly close the business. If you don’t pay off the business’s debts, you could face legal repercussions as an individual — even if you run an LLC or corporation. For example, shareholders can sue officers or directors individually through a process known as “piercing the veil.” To avoid personal liability, you need to have a full picture of the business’s debts and have a plan to pay them off.
An essential step in dissolving the business is filing an official dissolution document with the New Hampshire Secretary of State: Corporation Division. This will let the New Hampshire Corporate Commission know that you’re winding up the business and intend to dissolve. To dissolve a New Hampshire corporation, you need to file Articles of Dissolution.
To dissolve a New Hampshire LLC, you need to request a Certificate of Dissolution from the Department of Revenue Administration. This certificate will state that the LLC has paid all its taxes due. Once you’ve finished winding up the LLC’s affairs, you can let the state know by filing a Certificate of Cancellation with the Corporate Division. You can file your Certificate of Cancellation or Articles of Dissolution in New Hampshire online, by mail, or in the Secretary of State’s office.
When you started your LLC or corporation, you likely created an operating agreement or corporate bylaws to govern the business operations. These documents usually contain instructions for dissolving the business as well. In particular, an LLC’s operating agreement usually specifies the events that cause dissolution, like a majority vote of the members or if all the members dissociate. The corporate bylaws might contain the number of shareholders who must approve of the corporation’s dissolution. If you don’t have operating documents, you need to follow the defaults in the New Hampshire Business Corporation Act or the New Hampshire Revised Limited Liability Company Act.
If your LLC is still in the formation stage, we recommend that you create an operating agreement. We offer an LLC Operating Agreement Template, which can make dissolution easier. No matter what the operating agreement or corporate bylaws say, you still need to file the proper dissolution paperwork with the state to let them know of your dissolution.
While you’re following the dissolution process in your operating documents or the default legal process, it’s important to cancel all the licenses or permits that your business applied for. You probably have licenses at the state, local, and federal levels. Don’t forget about any activity-specific licenses or employment licenses from the federal government or the New Hampshire Employment Security Office. Some of these permits might automatically renew, so it’s important to research and be careful that you’ve canceled them all.
One final step in winding up your business is to wrap up the business’s legal and financial obligations. You’ll alert the IRS to your closure by filing final tax returns and canceling your EIN. You also need to file final tax returns with the state, pay any business profit or enterprise taxes, and cancel any Unemployment Compensation Tax accounts. If the business has employees, remember to follow all federal and state laws regarding writing final employee paychecks, sending W-2s, and paying out other earned benefits.
Finally, when the business has completed its winding up, your business will file Articles of Dissolution or a Certificate of Cancellation with the Corporation Division. An LLC needs the signatures of the manager or member. A corporation needs the signature of the chairman of the board of directors, president, or other officer. In addition, an LLC needs to provide the reason for dissolution. A corporation has to provide a statement that the required number of shareholders approved of the dissolution. Once the Corporation Division accepts your documents for filing, you will have officially dissolved the New Hampshire corporation or LLC.
We know that running a business is hard work, no matter where you are in your business’s lifecycle. But if you feel overwhelmed, we are here to help make things easier. Know that when you sign up for our business services, we’ll be there for you for formation and beyond, so that you can focus on doing what you love: working on your New Hampshire business.
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.
The first step to dissolving a business in New Hampshire is to assess your business’s debts and assets. You’ll need to take care of all your New Hampshire business’s obligations to the government, close all your tax accounts, and cancel all your licenses and permits. If you’re an LLC, you’ll need to obtain a Certificate of Dissolution from the New Hampshire Department of Revenue Administration. Finally, corporations need to file Articles of Dissolution and LLCs need to file a Certificate of Cancellation with the New Hampshire Secretary of State.
When you dissolve a New Hampshire LLC, you’ll pay a fee to the Department of Revenue Administration for a Certificate of Dissolution. Also, you’ll pay a fee to the Corporations Division when you file a Certificate of Cancellation.
The time it takes to dissolve an LLC in New Hampshire depends on the time it takes to wind up your business obligations. In addition, the New Hampshire Department of Revenue Administration can take 60 days to respond to your request for a Certificate of Dissolution.
However, the Certificate of Cancellation is a simple statement of the reason for the LLC’s dissolution and the signatures of the members. If you file online, the Certificate of Cancellation takes effect the same day.
At least two-thirds of the members or stockholders must vote for dissolution. Then, the treasurer and a majority of the directors or trustees need to sign and file a Statement of Dissolution with the Corporation Division.
New Hampshire Business Resources
Business Dissolution by State