Rhode Island Dissolution
When it is time for you to close a business, you should be ready to deal with the process that the state implements. Make sure you know each step and do them properly. At first, the tasks may seem complicated. But you can try to lessen your confusion by trying to understand them.
What Is Rhode Island Dissolution?
If a company in Rhode Island has decided to end its business operations, it has to go through the process known as dissolution. Through this process, the business entity will formalize its closure and deal with all its remaining obligations.
Why Does A Company Dissolve?
Why do companies need to dissolve? – Rhode Island requires business entities to submit formal paperwork when they start their companies. Likewise, all companies that wish to end their operations have to file paperwork with the state. This way, the state will know that the company will no longer conduct business and not hold it liable for filing reports and pay fees or taxes.
Who makes the decision to dissolve? – The dissolution of Rhode Island LLCs will depend on the decision of members. Meanwhile, Rhode Island corporations rely on the recommendation of the board of directors to dissolve the company and the approval of the shareholders through a voting process.
How long does it take to dissolve a business? – It may take weeks for your company to accomplish all tasks. Start preparing your documents as soon as the company finalizes its decision. This way, you will be able to start dealing with the process as soon as possible. After filing the paperwork, you should give the state 7-10 days to process your documents.
What Happens If Your Company Does Not Formally Dissolve?
Unless you dissolve your business formally, it will remain registered with the state. Thus, it will still have an obligation to file annual reports and pay fees. Failure to comply with Rhode Island’s requirements may put your business in, “Not Good Standing” status. Furthermore, your company will be open to possible claims as long as it exists.
Steps To Dissolve Your Business
Rhode Island has a dissolution process that business entities operating within the state have to follow.
1. File Articles of Dissolution with the state – Business entities in Rhode Island have to file a completed Articles of Dissolution with the Secretary of State in person or by mail. Only companies in good standing with the state can apply for dissolution. Include a letter of good standing that is issued from the Rhode Island Division of Taxation and the filing fee to your filing documents.
2. Remove all liabilities and obligations – Your company may continue to exist following its dissolution for winding up. Your company may designate one member or manager or a team to handle the task. Liquidate all the assets of the company. Remove its liabilities according to the priority outline the law states. After dealing with all obligations, your company can distribute the remaining assets to shareholders or members.
3. Give notice to any claimants –You may send a written notice to all known creditors and claimants to inform them about the dissolution and provide instructions on how they can submit their claims. You can check their mailing addresses in the record books of your company. You may also publish a notice in a newspaper if you think there may be some unknown claimants that need to know about your company’s dissolution.
4. Tax clearance – Rhode Island requires businesses to submit a letter of good standing along with the Articles of Dissolution. Your company may request a letter from the Division of Taxation. You may download the application form for the letter of good standing on the website of the Rhode Island Division of Taxation. You may also request them to mail an application form to you.
5. Close all bank accounts, credit lines, permits, and licenses – To avoid having to deal with legal problems in the future, close all bank accounts and credit lines under the name of your company. Additionally, your company may have secured permits and licenses when it started. Cancel all these to prevent reporting or any fiscal obligations.
How DoMyLLC can assist with streamlining the process
Dissolving a company may require a better understanding of each step you need to go through to complete the process. If you need the guidance of professionals, check out our services. We also offer personalized solutions and live support from our team of experts. Contact us now and find out how we can help your Rhode Island company.
Rhode Island Dissolution FAQs
Is There A Filing Fee To Dissolve The Business?
The filing fee for dissolution in Rhode Island is $50. Additionally, your company has to pay an additional $50 for the letter of good standing.
Do You Need The Department Of Revenue Clearance Before The Secretary Of State Will Accept Your Dissolution?
Rhode Island requires business entities that want to dissolve to obtain a letter of good standing from the Rhode Island Division of Taxation.
How Long Does The State Take To Process The Dissolution?
Normally, the Division of Taxation takes four weeks to process your request and release the letter of good standing. The processing time may also depend on the taxpayer and the information he or she provided.
The Secretary of State normally takes 7-10 business days to process dissolution documents. If you submit in person before 4 pm, the state will process your document within the day.
When Can Another Business Use Your Company Name?
Normally, the Division of Taxation takes four weeks to process your request and release the letter of good standing. The processing time may also depend on the taxpayer and the information he or she provided.
The Secretary of State normally takes 7-10 business days to process dissolution documents. If you submit in person before 4 pm, the state will process your document within the day.