A business may end for any number of reasons. Just as creating a business creates many legal questions and obligations, so too does the process of business dissolution. No matter how or why the company needs to come to an end, owners must follow the steps prescribed by state law.
A Minnesota business dissolution lawyer could provide essential support during the winding down of a company. An experienced business lawyer can help take care of all the business-related and legal requirements that come with business dissolution to help the process go as smoothly as possible.
Companies may cease doing business for a variety of reasons and under several differing circumstances. However, it can be helpful to separate these reasons into the categories of voluntary and involuntary dissolutions.
A voluntary dissolution describes the end of any company when the owner maintains control over that choice. This may be the result of retirement, an inability to continue working, or a death. In these cases, Minnesota Statute §302A.721 says that companies must inform all shareholders of the decision to dissolve and provide a notice of the meeting to take a vote. If that vote comes back with an approval to dissolve, the company must send a notice of dissolution to the Secretary of State. Under MN Statute §302A.723, this notice must contain information regarding the decision to dissolve as well as confirmation that the dissolution has taken place.
Involuntary dissolution generally involves a failure on the part of the company to comply with state law. A typical example of this is a failure to reregister the company with the Secretary of State as required under MN Statute §302A.821. Involuntary dissolution can also be the result of a court order. A Bloomington lawyer can provide more information about the various types of business dissolution and guide companies through that process.
Just because a company dissolves does not mean that it no longer has legal obligations to its shareholders and other parties. Under MN Statute §302A.725, companies must follow a strict procedure to dissolve the company regardless of the reason or motivation for the dissolution. The first step is to settle all debts of the company. This includes collecting and distributing money to vendors and creditors.
A corporation must also serve notice to all creditors or people who have outstanding legal disputes with the company. This allows these parties to make a claim for owed money before the company ceases to exist. A Bloomington lawyer could provide insight on the legal obligations of companies after filing a notice of dissolution.
Ending a business does not just sever all ties with other companies and shareholders. It also creates a legal obligation under state law to follow specific procedures to protect the legal rights of all involved parties. Whether a company begins the dissolution process by voluntary choice, court order, or as the result of the actions of the Secretary of State, companies still have legal requirements.
A Minnesota business dissolution lawyer could help with any aspect of this process. They can work to explain the requirements under the law to end a company. To get started, call today.