How to Dissolve a Business in Utah?
The process involves many of the same steps and Utah has a few additional provisions governing shareholder distribution of stocks.3 min read
Need to know how to dissolve a business in Utah? The process involves many of the same steps as dissolving a business in another state, but Utah has a few additional provisions governing shareholder distribution of stocks.
Dissolving your business doesn't mean just locking the doors of your shop or taking down your website. Every business, regardless of their jurisdiction, must follow the necessary steps or it could face serious administrative consequences and time-consuming legal difficulties.
Steps to Dissolve a Business in Utah
- Review your business's Articles of Incorporation - This document will list the steps necessary to dissolving your business. You may need to hold a vote and obtain two thirds of the company's shareholders' consent in order to continue with dissolution. You may also need to provide written notification. An LLC may choose to dissolve according to the company's operating agreement or though unanimous consent of the members. Regardless of which method is used, the vote must be included within the meeting minutes.
- Notify creditors of dissolution - Prior to the formal dissolution you are responsible for paying all debts, liabilities, and obligations.
- File your Certificate of Dissolution with the Utah Secretary of State - You may need to submit a tax clearance letter with your Articles of Dissolution, which certifies that your company does not owe any outstanding taxes. In Utah you're required to submit a statement of dissolution form to the Division of Corporations and Commercial Code, which can be found online. There is a mandatory fee for regular processing, and additional fees for optional expedited processing. Regular processing takes about five to seven business days. By filing an LLC's Articles of Dissolution, you formally terminate it as a state-registered business entity. Utah does not require tax clearance prior to LLC dissolution.
- Contact the Internal Revenue Service (IRS) to file Form 1065 - You must file it within three months of your business's closure. You'll still need to keep paying payroll, liquidation, capital gains, and quarterly and annual taxes for the current and previous years. Local tax authorities have their own business tax requirements as well.
- Cancel your business license - Only after you've completed the previously mentioned steps will you be ready to cancel your business license. If you haven't already, contact your creditors and notify them that your company is going out of business. Provide them with the appropriate contact information, including a mailing address, and a time frame during which all outstanding claims must be filed.
- Settle all outstanding debts and collect money owed to the company - Resolve any outstanding claims. If your business has shareholders, let them know about the dissolution and make sure to give them adequate time to consider any decisions that affect them.
Once all debts and incoming payments have been settled, your company's assets may be sold and distributed among partners, members, or owners. Keep in mind that if you're legally authorized to conduct business in other states, you'll need to adhere to any additional local or state requirements associated with business dissolution in those jurisdictions.
Fair Value in Utah
If the shareholders of a private company can't get along and resolve their differences, two Utah State statutes may govern the outcome of these types of situations.
The first is called a judicial dissolution statute. This may apply when shareholders are deadlocked. A shareholder may request the court to dissolve the corporation, or the corporation may repurchase shares for fair value.