What Is Utah Dissolution?
When a company finds that the best decision is to close, it has to understand that the only way to move forward is to end the business properly. A company can do this through the dissolution process. Dissolving a company means the owners are ready to remove the name of the business entity from the register of the state. It will no longer exist.
Why Does A Company Dissolve?
Why do companies need to dissolve? – When you formed your company in Utah, you registered it with the state through the filing of paperwork. Likewise, your company will have to submit paperwork to the state to inform them about the closing of the business. This way, the state will know that the company will no longer have liability for filing reports and paying taxes.
Who makes the decision to dissolve? – Closing an LLC requires the approval of its members. As for a corporation, it will need the approval of the board of directors and the votes of the shareholders. There are certain cases when the state decides to dissolve a company administratively.
How long does it take to dissolve a business? – The time frame to finish the whole process may vary for each company. The way your company handles the necessary steps will determine how long it will take. Generally, it may take weeks to finish everything. You also have to give the state 5-7 days to finish processing your documents.
What Happens If Your Company Does Not Formally Dissolve?
If you do not dissolve your company in Utah, it will continue to exist. It will still be liable for filings, taxes, and all corporate acts in the past. You will also remain vulnerable to possible claims against the company.
Steps To Dissolve Your Business
To dissolve a business entity in Utah, your company has to follow the multi-step process.
1. File Articles of Dissolution with the state – A Utah LLC has to file completed Articles of Dissolution of Limited Liability Company. There are two forms that corporations can use. If your corporation has issued shares, use Articles of Dissolution After Issuance of Shares. Otherwise, submit Articles of Dissolution Prior to the Issuance of Shares. File the appropriate form with the Division of Corporations and Commercial Code by fax, mail, or in person.
2. Remove all liabilities and obligations – Liquidate all the company’s assets and settle all obligations according to the priorities that the law has outlined. If there are any remaining assets, distribute them according to the ownership interests of members or shareholders.
3. Give notice to any claimants – Inform all known claimants about the company’s dissolution and where and until when they can submit their claims. You may also choose to publish in a newspaper to inform other unknown claimants. The proof of publication may also be helpful in case someone raises questions about claims.
4. Tax clearance – The state does not require Utah business entities to obtain tax clearance. However, you have to make sure that your company has no pending tax obligations. You should also state in the IRS Form of the company that it will be the final return.
5. Close all bank accounts, credit lines, permits, and licenses – Use the company’s funds to help settle its obligations. After that, close all bank accounts and credit lines under the name of the company. You should also cancel all business permits and licenses your company acquired.
How DoMyLLC can assist with streamlining the process
The process of dissolving a business entity in Utah includes several tasks. Trying to handle them by yourself can be overwhelming. You can lessen the burden by contacting someone who has knowledge of the process and experience in handling it. If your Utah company has decided to start dealing with the dissolution process, our team of experts can offer live support. We also provide personalized solutions, so you can be sure that the service we give you is right for your company. Contact us now and find out how your Utah company can use our services.
Utah Dissolution FAQs
Is There A Filing Fee To Dissolve The Business?
Filing Articles of Dissolution in Utah is free. However, if you want to request for expedited service, you will have to pay $75.
Do You Need The Department Of Revenue Clearance Before The Secretary Of State Will Accept Your Dissolution?
No, you do not. Utah does not require business entities to obtain tax clearance before dissolving.
How Long Does The State Take To Process The Dissolution?
The normal processing of dissolution documents is 5-7 days. If your company chooses expedited service, you can expect the division to finish processing the documents within 48 hours.
When Can Another Business Use Your Company Name?
Utah protects the name of the business entity for 120 days. It is to give the owners time to revoke the dissolution if they change their mind. After this, the name will be available for other entities to use.
For companies that the state has administratively dissolved, the names will be safe for two years.