What has to happen before selling or liquidating your business
If you have been doing business as a corporation, limited liability company (more than one member) or partnership, all shareholders or Partners must agree to the sale or liquidation. In order to dissolve the entity, follow the procedures you and the others involved set out in the original Articles of Incorporation, or the Organizational Agreement set up at the start of the business. There will be requirements from the State wherein the business resides, so make sure you are on board with that entity’s business closure certifications or statements. Usually, this set of documents require a majority of the shareholders or partners to agree on the sale or dissolution, or there could be a two-thirds directive or the majority rules on the opening of the business documents. Make certain those documents are handy, and have not been amended or changed. In this instance, the follow up or new amending documents are the rule. Yes, in the instance of a corporation, the Board of Directors must take a vote, in a partnership, the members do the voting.
There will be, in the case of dissolution, upon voting, and the final documents with the taxing authorities the cancellation of DBA, licenses, permits, rental agreements, utilities, bank accounts and final tax payments. Notifying your employees of the closure will be quite involved, so will the closure of credit accounts with vendors, credit cards and your customers. When you have outstanding business loans, your lender will want to know the strategy in place for paying them off. The lender may look at any business collateral used originally on the loan, or other business assets, and concur that the assets are in sellable condition.