There are countless reasons you may choose to dissolve your Vermont business. Some of them can be great such as a new business opportunity or finally being able to retire. Others can be a little more frustrating such as economic downturn, industry disruption, partner disputes, or just overall financial concerns. Regardless of why it’s happening, it’s important that your business dissolution happens correctly.
Much like when you formed your business by registering with the Secretary of State, dissolving your Vermont business is a similar process. Failing to dissolve your Vermont LLC or dissolve your Vermont corporation will result in the state responding as if your business was still alive and well. You will still be expected to file annual reports and pay taxes. That means also being responsible for late fees and penalties. These fees could become personal liabilities for business owners that can negatively impact credit and the ability to take on new business ventures. If you’re ready for that new business venture, consider using our Vermont LLC FormationService or Corporation Formation Service to get you started.
If you do the work ahead of time, the process is going to be so much easier. Establishing a thorough system of record keeping cuts down on hours of research and countless grey hairs. Much of the dissolution process revolves around information gathering. Consider using our tools and services to help. Here are the steps you will need to follow for Vermont business dissolution.
Your first step is to determine how much your business is actually worth. Real estate, building structures, product inventory, manufacturing equipment, company vehicles, office supplies, and other assets all add up. Remember to account for third-party business contracts and taxes. If it gets complicated (which isn’t unlikely) don’t hesitate to hire a professional to assist in asset valuation. Our Worry-Free Compliance Service and dashboard can help with keeping your business documents organized.
Unfortunately, your business debts won’t go away just because your business does. It’s crucial to know who you owe and how much you owe them. Make sure to communicate with anyone you owe a debt to and set up payment arrangements. The worst thing you can do is pretend like it will all go away on its own.
Failing to pay business debts could result in serious legal repercussions. In most cases, business entities are responsible for debt liability. If the debt can’t be paid by the company, the court can choose to pierce the corporate veil and make members or owners personally liable.
Just as each business entity has its own formation document, each entity has its own Vermont business dissolution document. These documents and instructions are found on the Vermont Secretary of State website.
File the appropriate document with the Secretary of State. Processing times are 7 to 10 days when submitted by mail, and faster when filing online.
Vemont doesn’t require business operating documents to be filed with the state. But keep in mind that these documents are crucial and should be kept with the company’s official business records at the principal place of business. Operating documents detail the structure and inner workings of the company. Provisions should include manager and shareholder duties, profit and loss distribution, conflicts of interest, transfer of ownership or stock, and the process for sale or dissolution of the business. Having these guidelines in place early prevents you from having to follow state guidelines rather than what works best for your business.
Operating documents can help avoid confusion or misunderstanding between members, shareholders, or partners. Regardless of what your operating documents say, you will still have to submit your dissolution information to the state.
By the way, we have an Operating Agreement Template that could really be useful if you have a limited liability company that needs to run smoothly.
Just like that subscription you purchased a year ago, never used, and always meant to cancel, these things can sneak up on you. Make sure to cancel all business permits, licenses, and registrations. Some of these may renew automatically. Even if your Vermont business dissolution is complete, you could still get billed. Remember that license, permits, and registrations can exist at the federal, state, and local levels. If you used our Business License Report service to originally identify your business needs, you may want to look back at that document.
Tie up loose ends according to federal and state law. Ensure that all employee payments are made after closing and additional employment benefits such as healthcare and retirement accounts are properly transferred or closed. File your final business tax returns and cancel your employer identification number. When you are ready for a new EIN, we can help with our EIN Service.
The last step is to file your Vermont business dissolution document with the Secretary of State. If you change your mind and your Vermont corporation wishes to continue, Title 11A, § 14.04 states that you may revoke your dissolution within 120 days of its effective date by submitting for Revocation of Dissolution.
There’s a lot that can happen from the time you file your formation documents to wherever you close up shop. Whether that means dissolution, sale of the company, or perpetual growth, we’re here to support all of your business needs.
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.
Receive approval from all relevant parties including members or shareholders. Value your assets and liabilities. Proceed with the winding up process by conducting all remaining business transactions and filings. Finally, you need to submit your dissolution documentation to the Secretary of State.
State filing fees are subject to change. Check with the Vermont Secretary of State for the most recent fee schedule.
Processing times are 7 to 10 days when submitted by mail, and faster when filing online.
Receive approval from directors and voting members if applicable. Be sure to conduct the winding up process of tying up loose ends. Finally, you will file your Articles of Dissolution with the Secretary of State.
Vermont Business Resources
Business Dissolution by State