There are many reasons your business may have come to the end of its current life — merger with or acquisition by another company, bankruptcy, or simply your desire to move on to another project. But how to close the book on a business depends not only on how you are writing its finale, but also on how the story started and developed along the way.
Who Owns What?
A key consideration when a business is merged, acquired, or dissolved is what aspects of the business belong to whom. In some cases, the “what” is obvious: property, assets, finances, etc. But there are more nebulous concerns. For instance, you must determine how to handle intellectual property, such as copyrights and trademarks: who holds the rights and how long will they last? Does control need to be transferred to a partner or company that is taking over the business? Even the name of your business is owned by someone, and might need to be transferred or cancelled. Permits, licenses, client lists, liabilities, stocks, and assets all must be considered during a business’s dissolution or transition.
What Do You Owe?
This is a big one. Companies incur debt or expenses for a variety of reasons. But just because you’ve decided to dissolve the business or transfer ownership doesn’t mean any of those debts go away or are easily passed off to someone else.
If you’re closing your company because of financial problems, bankruptcy can be a way to either settle your debts or even save your business from permanent dissolution. Some of these bankruptcy paths involve sale of company assets to pay creditors, reorganization of the business, and payment plans to eliminate debt over several years.
In some cases, bankruptcy won’t save the business. However, it can provide you with the fresh start you need. If you think your company is no longer financially viable, declaring bankruptcy will stop creditor harassment and will provide you an avenue to dissolve the business.
What Can a Lawyer Do?
A lawyer is just as crucial to the dissolution of a business as it is to its formation, if not more so. Merging with another company; transferring ownership, property, inventory, and assets; settling taxes and other debts; filing for the correct form of bankruptcy; and resolving litigation are all a part of what business attorneys do best. And it’s not just our advice in those areas — we also handle all of that paperwork for you. As you can imagine, all of these aspects require filing forms with entities like the Arizona Corporation Commission, the IRS, and the courts. If you are writing the ending for your business, we are the ones who will put it on paper, literally.
As you consider your company’s final days, contact the business lawyers at Bellah Perez, PLLC at 602-252-9937. We can evaluate your business model and financial situation, and determine a fitting end that will leave you with closure, both legally and personally.
Disclaimer: The answer is intended to be for informational purposes only. It should not be relied on as legal advice, nor construed as a form of attorney-client relationship.