New Jersey Dissolution
If you have decided to close your business in New Jersey, there are certain things you should learn. First, you need to know that the state implements a law when it comes to business entities that want to close. Make sure you understand each step and follow the process carefully to avoid encountering problems in the future.
What Is New Jersey Dissolution?
The dissolution process refers to the legal and official way of closing a business. It is the proper way for a company to inform the state that it will no longer continue its operations in the area.
Why Does A Company Dissolve?
Why do companies need to dissolve? – New Jersey requires business entities to file paperwork to ensure that they will no longer have liability in paying annual fees and business taxes, as well as in filing annual reports and other necessary documents.
Who makes the decision to dissolve? – New Jersey LLCs will require the decision of their members. On the other hand, voting to dissolve a company will depend on the board of directors and shareholders of corporations.
How long does it take to dissolve a business? – The time it takes for your company to finish all necessary actions to come up with the resolution to dissolve will affect the time frame. After taking care of your company’s responsibilities, you can wait days or weeks for the state’s processing time. However, it may take longer if the agency has a bigger workload. It may even take a year in some cases.
What Happens If Your Company Does Not Formally Dissolve?
Businesses need to register with the state to legalize their operations. Failure to dissolve means your company still exists. Thus, it must file annual reports. If your company fails to file the report 2 years in a row, New Jersey will revoke its charter. The taxes will continue to add up. A revoked company needs to settle all its obligations before the state allows it to dissolve.
Steps To Dissolve Your Business
Once you have made up your mind about the closure of your business, you should follow multiple steps to dissolve your company in New Jersey.
1. File Articles of Dissolution with the state – Only business entities with good standing can dissolve in New Jersey. The state offers online filing, wherein a company can complete the whole process using the New Jersey Online Business Endings and Cancellation Service. An LLC needs to provide its business entity number and filing date, while a corporation has to give its business ID number and formation date.
Filings by mail or over the counter requires LLCs to use Form L-109 Certificate of Cancellation and corporations to submit the proper Certificate of Dissolution. File the forms with the Division of Revenue.
2. Remove all liabilities and obligations –Liquidate all assets and settle all debts to the extent possible. Remove the liabilities based on the priorities set by the law. Resolve any lawsuits against the company. After that, you can start distributing the remaining assets.
3. Give notice to any claimants – Inform all possible claimants about your company’s impending closure. Notify them about your contact information and the deadline for the submission of claims. You can send a written notice to known claimants and publish a notice in a newspaper.
4. Tax clearance – New Jersey does not require LLCs to submit a tax clearance. However, corporations need to include in its document submission an Estimated Summary Tax Return and an Application for Tax Clearance Certificate. You can download the form through the website of the Division of Revenue.
5. Close all bank accounts, credit lines, permits, and licenses – You will not be able to use the bank accounts and credit lines of your company once the state formalizes its dissolution. Thus, it would be best to close them after using the funds to settle liabilities. You should also request the cancellation of the permits and licenses from the agency that issued them.
How DoMyLLC can assist with streamlining the process
Some people find the process of business dissolution in New Jersey overwhelming. But your company does not have to face these steps alone. You can get personalized solutions from us. You can also expect live support from our team of experts. Contact DoMyLLC and find out how we can make the dissolution process easier for your company in New Jersey.
New Jersey Dissolution FAQs
Is There A Filing Fee To Dissolve The Business?
The filing fee for LLCs is $100. Walk-in filings have to pay another $25. A New Jersey corporation has to pay a $120 filing fee, which includes $95 for the dissolution filing and $25 for the tax clearance. An additional $15 will apply for 8.5 business hours over the counter expedited service.
Do You Need The Department Of Revenue Clearance Before The Secretary Of State Will Accept Your Dissolution?
New Jersey LLCs do not need clearance, but corporations do.
How Long Does The State Take To Process The Dissolution?
The Division of Revenue processes mailed in documents for approximately 3-5 business days. You may have to wait an additional 3-6 days for the mailing. Meanwhile, they can complete over-the-counter filings in 8.5 business hours.
However, the processing time may vary depending on the workload of the staff. There are some instances when it takes about a year to finish the processing.
When Can Another Business Use Your Company Name?
The names of business entities that dissolved will not be available for use for a year after the date of the cancellation or dissolution.