How to Navigate the Process of Business Dissolution

Dissolution of Deeds happens when any corporation is dissolved by a tribunal, in here the National Corporation Law Tribunal (NCLT) by its order dissolves after the wind up process is completed. The Registrar of Companies (ROC) removes the company name once it dissolves and ends the existence.

Although its a challenging choice as sometime it becomes necessary for shutting down a firm. A firm can get closed cause of variety of reasons, which includes financial setbacks, retirement or change in personal finances.

Process of Dissolution of Deeds

Its much important for understanding the process and taking requires steps. The step by step process of business dissolution is :- 

1. Obtaining business owners’ approval:- Incase of multiple owners everyone’s consent is required to obtain. This involves holding meetings and conducting voting on a resolution for winding up the company.
2. Submit the required document:- After owners have given consent, submit the necessary document to the state where the firm is established. Depending on the state the criteria will change, but you have to normally to file a certificate of Dissolution.
3. Notify Creditors and Pay any Unpaid Bills:- Upon submitting required documentation, you shall inform the creditors of dissolution of Firm. You also have to take care of any unpaid bill which company has.
4. Submit last Tax Returns and Close Tax Accounts:- Deactivate the tax account and file the business’s final tax return. Pay any unpaid taxes.
5. Complete all Business Affairs- It entails liquidating any assets and transfer the money to owner’s and revoke any business permission or licence.

Your company will Dissolve once you finish the Dissolution of Deeds.

Handling Dissolution of Deeds Procedure

1. Reason for Dissolution:- Before starting the business evaluate and understand why are you dissolving the business. It helps in guiding the decision throughout the process.
2. Review legal obligations:- Identify the legal obligation you have as being a business owner when it comes to dissolving the company. It can be notified by government agencies, closing licences and permits and fulfilling any sort of outstanding tax obligations. 
3. Informing Stakeholders- Notifying all the relevant stakeholders about the decision for dissolving the business. It includes employees, customers, suppliers and partners. Be always transparent about the cause of dissolution and provide the information on how it will affect them.
4. Formulate a dissolution plan- Form a detail plan which mentions the step to need for taking decision to dissolve the business smoothly. This include tasks such as cancelling contracts and leases, selling assets and inventory, settling debts and liabilities and distributing any remaining funds between the shareholders and Partners.
5. Complying Legal Requirements- Follow all the legal requirement which are specific to the jurisdiction for dissolution of a business. It involves filing the dissolution documents with the government agencies or the courts.
6. Settling finance matters- Closing bank accounts which are associated with business.
7. Notifying Creditors and Settling debts- Inform all the creditors about the business dissolution and making arrangements for settling any debt. This involves negotiating payment plans and seek legal advice if there is any dispute.  
8. Selling and Transferring Asset- Identify the business assets such as equipment, inventory or intellectual property. Selling them to pay off the debts or transfer ownership to the partners or the Shareholders.
9. Canceling Contracts and Leases- Review all the existing Contract, Leases and Agreements which are associated with business and take necessary steps for canceling them. Beware of termination clauses.
10. File Final Tax Return- Consult with Tax professional for filing any required final tax return for business entity before the dissolution is complete. It includes the payroll taxes, sales taxes, income taxes, etc.
11. Complete required Documentation- Prepare all the required documents for filing a formal dissolution with the government agencies or courts complying with the local regulations.
12. Distributing Assets and Funds- After all these obligations have been settled and the dissolution process is completed. Distribute all the remaining assets or funds between the shareholders/partners according to respective ownership percentage as given in the Dissolution Plan.
13. Informing Relevant Authorities- Government agencies such as the Internal Revenue Service (IRS) about closing the business.
14. Keep Records for Reference- Maintain the copies of important documents which are related to the dissolution process for any future reference.

Conclusion

Dissolution of Deeds can take lot of time and effort. This is important for taking any necessary precaution.

Its important for initiating planning as the dissolution can take months. It provides sufficient time for informing creditors. Completing the required documentation and closing the business activity. Maintain a detailed record of every step taken throughout the process. Keep it organised and steer clear through any issue and keep taking professional help wherever you need it.