Steps to Dissolve Your Utah Business
- Establish a valuation of your Utah business
- Compile a full account of your Utah business’s debts
- Identify Utah’s official dissolution document
- Follow instructions in your Utah business’s operating document
- Cancel your Utah business’s permits, licenses, and registrations
- Wrap up your Utah business’s legal and financial obligations
- File your Certificate or Statement of Dissolution for your Utah business
Utah business owners know that dissolving a business is just as complicated as running one. And making the choice to close your Utah business is often just as difficult as deciding to go into business for yourself in the first place.
You may choose to dissolve your Utah business because you’re ready to retire. Maybe, you want to open a new venture in a different industry. In other cases, you need to know how to dissolve a business in Utah to avoid bankruptcy. Regardless of your business’s financial position, you’ll need to close your business properly to put yourself on the best footing going forward. If you don’t properly dissolve your business, you may still be responsible for filing taxes, annual reports, and other routine paperwork. You may even be penalized or fined if you don’t.
A very important thing to remember is that failure to dissolve your Utah business properly can negatively impact business owners’ or members’ credit. This is especially problematic if you’re closing your doors to open a new business. To help clear up this and other confusion about Utah voluntary dissolution, we’ve put together some helpful information about how to properly dissolve a business in Utah.
As you get ready to form your next company, we can help you file your formation paperwork. Our fast, easy Utah Limited Liability Company (LLC) Formation Service and Utah Corporation Formation Service can help you get started on your next Utah business venture.
Before dissolving your Utah business
When you prepare to dissolve your Utah business, you’ll 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 Utah business. For instance, if a creditor suddenly requests payment on a long-forgotten bill, this can prevent the dissolution of your 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 Utah business
You’ll need to value your real estate, inventory, assets, and basically anything of value within your business to dissolve your Utah LLC or corporation. Many professionals specialize in valuation, so don’t be afraid to hire someone if you’re unsure of what you’re doing. You’ll also need to gather all documents related to business operations. Tax information, contracts with third parties, and business organizational documents may be especially important.
Our Worry-Free Compliance Service can help you throughout the life of your Utah business. We offer our clients a handy dashboard as part of this comprehensive. This keeps your business documents organized to make finding key business information easier.
Step 2: Compile a full account of your Utah business’s debts
Just because you’re closing your business doesn’t mean debts disappear. You’ll need to have a full picture of what your business owes to whom before you can close your doors. 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
- Creditors preventing the dissolution of your business using the courts or other legal process
It’s obviously in your best interest to have a very clear picture of not only the value of your business, but also your debts when preparing to dissolve your Utah business.
Step 3: Identify Utah’s official dissolution document
Dissolving your Utah LLC is a straightforward process. First, you’ll need to complete the Statement of Dissolution. Once completed, you can print it and mail it to the Utah State Department of Commerce. The most up-to-date mailing and fee information is linked through the form.
Dissolving your Utah corporation is a very similar process. You’ll need to complete the Articles of Dissolution form. Once you’ve done that, you can print it and mail it to the Utah Department of Commerce. As with the Statement of Dissolution, the Articles of Dissolution form has a link that provides the most current information about mailing address and filing fees.
Step 4: Follow instructions in your Utah business’s operating document
While filing dissolution paperwork with the state is the thing that actually dissolves your business, your Utah company’s own governing documents can be a great roadmap to guide you through the process. Your Utah LLC’s operating agreement or your corporation’s bylaws may even contain explicit dissolution instructions.
When you form your next LLC, you should know that we offer Operating Agreement Templates. These can help you customize an operating agreement during the formation process of your business. But again, no matter what your governing documents say, you still need to file proper dissolution paperwork with the state.
Step 5: Cancel your Utah business’s permits, licenses, and registrations
You probably applied for a variety of permits or licenses when you started your Utah business. As you think about how to dissolve a business in Utah, one key thing to note is that you’ll need to terminate those licenses. Some permits and licenses renew automatically each year. Knowing your permit renewal dates can save you a bundle in costly, needless, automatically renewed permits. As soon as you know you’ll be dissolving your business, be sure to cancel licenses as soon as you’re able. The more costs and obligations you can eliminate as you begin to close your Utah business, the better.
Step 6: Wrap up your Utah business’s legal and financial obligations
If you’re a Utah employer, be sure to understand any legal obligations you may have to employees as you dissolve your business. Consult with a Utah employment lawyer if necessary. Be especially sure you understand any rules pertaining to terminations and layoffs. Misunderstandings or lawsuits related to employment law can be lengthy and could delay your ability to dissolve your Utah business.
You’ll also need to file your final state and federal tax returns. 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 Utah business
You already know what Articles of Dissolution or a Statement of Dissolution is at this point. You know which version you need to file for your Utah corporation or LLC. But 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 your business, terminating your employees, filing tax returns and any outstanding paperwork, and settling all the businesses debts, only then can you file your Articles or Statement of Dissolution.
We’re here to help you with your Utah business’s needs
We can take some of those complicated business compliance tasks off your plate. Our business formation services can form your LLC or corporation 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 their business documentation, making transitions through the different phases of business a breeze. Whatever your business needs are, we’re here to help you throughout your business’s lifecycle.
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 Utah?
Once you’ve gathered all the appropriate information and settled all the business’s debts, you dissolve a Utah business by filing Articles of Dissolution or a Statement of Dissolution. The document you file will depend upon your business type.
- How much does it cost to dissolve an LLC in Utah?
The cost depends upon your business entity type and the complexity of your business.
- How long does it take to dissolve an LLC in Utah?
Processing of a Statement of Dissolution by the Department of Commerce is generally completed within a few business days at regular processing speed. However, the work of preparing to file the Statement of Dissolution can take months or more.
- How do I dissolve a nonprofit organization in Utah?
A nonprofit corporation in Utah can file Articles of Dissolution just like any other corporation. However, due to a nonprofit’s complex business structure and special benefits conferred, it’s recommended that you speak with legal counsel or a Utah nonprofit expert when dissolving your Utah nonprofit.