Packing Up A Business Entity
New business owners often have an understanding that certain legal formalities must be taken when a business opens – but they may not know that similar formalities apply if and when the business closes. In fact, if a limited liability company (“LLC”) or other business entity has ceased operations, it must be formally terminated through a process called dissolution.
Under Ohio law, a limited liability company (“LLC”) must be dissolved if it has fulfilled its purpose or there is a unanimous agreement amongst the members to dissolve the company. A court may also instruct the LLC to wind up its business. As a final step after its affairs are concluded, the LLC and/or member must file a Certificate of Dissolutionwith the Ohio Secretary of State.
Depending on the type and purpose of the entity, other actions may need to be taken at the time of dissolution. For example, businesses which are closing may also have certain federal or state tax responsibilities to fulfill before the company is officially out of business.