If you want to dissolve a Washington business, then you need to follow some specific steps to fulfill your commercial and government obligations. Businesses dissolve for many reasons, both positive and negative. A positive reason is the sale of the business’s assets to an investor for a substantial gain. A negative reason is the accumulation of vendor debt that the business can’t pay back.
Whatever the reason, businesses that dissolve often have many open commercial and government matters. Each of these matters need to be closed to avoid accumulating ongoing charges, fees, and other unforeseen liabilities. If you don’t dissolve your business properly, you and the other owners could be personally liable for the business’s debts. In addition, a drifting and inactive business could affect owner creditworthiness and prevent participation in future financing or investment opportunities.
On the other hand, if you wish to start a business rather than close one, we can help with our easy and efficient Washington Corporation Formation Service or Washington Limited Liability Company (LLC) Formation Service.
Your business is probably a corporation or LLC. If that’s the case, then legally it’s its own person. As a legal person, the business grants the benefit of limited liability to the owners. The best way to preserve this benefit is to conduct all business activities in the business’s name. Records of all these activities (e.g, leases, vendor contracts, permits etc.) need to be in writing and filed in a central location. Therefore, before you dissolve a Washington business, gather all its documents in one place and have them handy. It’s much easier to gather documents before dissolution begins, rather than during it when you might need to locate or generate an important business document.
Dissolving your business requires wrapping up its commercial obligations. To do that, you have to determine what your business is worth. A business is usually worth the combined value of its tangible assets such as real estate, inventory and office equipment minus its debts. Sometimes intangible assets like copyrights and patents are also included, but only if they can be easily transferred or sold.
A final part of determining value is gathering and reviewing all the tax information about the assets and the business as a whole. Tax treatment can significantly affect valuation. Determining what your business is worth can be difficult and overwhelming. Don’t hesitate to hire a professional to help you. Getting an accurate overall value of your business is very important in the dissolution process.
We can make this step much easier with our Business License Report and Worry-Free Compliance Service. With these services, you can gather some of the information we just discussed to dissolve a Washington corporation or dissolve a Washington LLC.
Any business that’s been operating for a while has some sort of debt, and we assume your business is no different. Simply because you decided to close and dissolve your business doesn’t mean that it won’t have to pay its debts. The law generally requires that a business use its assets to pay all its proper commercial and government debts. If it doesn’t, the owners can be personally liable. Accordingly, make a list of all the business’s creditors and the amounts owed to each. It’s very important that this list is accurate and thorough. If you fail to include a creditor on the list that should have been there, it may expose the owners to personal liability.
Whether you want to dissolve a Washington corporation or dissolve a Washington LLC will indicate what type of articles of dissolution in Washington you need to file. For your ease of reference we have included both forms below:
You file these documents with the Washington Secretary of State, and you can file your dissolution document either online or through the mail (the address is on the dissolution document).
Corporations and LLCs usually have a governing document that tells the owners how to operate the business, and in this case, how to dissolve it. For corporations, this document is known as the bylaws, and for LLCs, it’s known as the operating agreement. Check your business’s governing document for the dissolution procedures and follow them. It’s also good practice to have all these dissolution activities in writing and file them in a central place.
In addition to following the procedures in your governing document, check and follow the Washington statutes about dissolution. There are dissolution statutes for both corporations and LLCs. Make sure you follow the right set because requirements can be different. If your business doesn’t have a governing document, then follow the Washington statutes that apply for your business’s entity type (e.g., corporation, LLC, etc.).
If you lack a governing document for your business, we can help with our Washington Operating Agreement Template. Having a governing document can make the dissolution process more clear and easy.
If you have been operating for any period of time in Washington, your business likely has one or more licenses, permits, or registrations. Check with the State of Washington, and its counties and cities for any licenses, permits, or registrations for your business and file the proper paperwork to cancel them. Automatic renewal costs, late fees, or fines accumulate quickly and can result in personal liability for the owners. Also, don’t forget to check with any federal agencies from which you may have a license or permit and cancel those too.
You will need to give notice of the business’s dissolution to its creditors; this is where the work in Step 2 comes into play. The notice will give them an opportunity to file a claim for payment with the business. Generally, Washington requires that you publish the business dissolution in a newspaper for three consecutive weeks. However, check the applicable Washington dissolution statutes to determine the exact notice period for creditors. It’s very important to give business creditors the full notice period to present a claim. If you don’t, the creditor could go after an owner for payment.
If the business has employees, make sure that you file any final documents with the Department of Labor and Industries. Regarding taxes, check with the Washington Department of Revenue (DOR) about final filing requirements for tax returns, and also cancel any state tax I.D. number. Keep in mind that the Washington Secretary of State requires a Revenue Clearance Certificate from the DOR before corporate Articles of Dissolution can be filed. At the federal level, check with the IRS about any final tax returns and also cancel your business’s federal tax I.D. number.
You can now file either your corporation’s Articles of Dissolution or the LLC’s Certificate of Dissolution with the Washington Secretary of State.
Our LLC or corporation formation services can help you start your business quickly and easily, while our Worry-Free Compliance service and dashboard help you stay organized and compliant throughout the life of your business. From formation to dissolution, let us help you every step of the way with your Washington business’s 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.
To dissolve a Washington business, you need to file Articles of Dissolution or a Certificate of Dissolution with the Washington Secretary of State.
Filing fees are subject to change, but generally they’re listed on the official Washington dissolution document.
It will take approximately 30 days to dissolve a Washington LLC. Expedited services will dissolve the LLC in about 2 days. However, keep in mind that your business creditor notice period needs to expire before you dissolve your LLC.
In Washington, you dissolve a nonprofit corporation in the same way as a for-profit corporation. Keep in mind that the dissolution process first requires a DOR Revenue Clearance Certificate.
Washington Business Resources
Business Dissolution by State