End of the Road? How to Properly Dissolve Your Small Business

The coronavirus pandemic has been hard on businesses. While some small business owners are finding creative solutions to move forward, others are making the difficult decision to call it quits and move onto their next chapter. If you fall into the second group, you may have questions about the technicalities of shutting down your business. While every business is different and your exact path will depend on your company’s size and business structure, the following tips can help you get started. Before you get started, remember you should consult with an experienced business law attorney. The Drucker & Mattia team is standing by to assist.

Making Your Decision

If you own your business by yourself, the decision-making process is pretty straightforward. However, if you have investors, a business partner, a board of directors or other interested parties, officializing the decision and getting everyone’s go-ahead can be more complicated. In that case, you need to have an official vote as to whether or not you will dissolve the company. If a consensus cannot be reached, you will need legal assistance to find a way to move forward or choose an alternative.


You will need to document the dissolution of your business with the proper state and federal offices. If you fail to do this, you may end up getting charged for renewals of your business licenses in the future. The specific paperwork you’ll need to fill out will depend on whether your business is an LLC, corporation, s-corp, or another structure.

Notify Creditors and Other Impacted Parties

Inform the appropriate parties (creditors) that new debt can no longer be taken out against the business as it is being dissolved. You also need to inform anyone else who will be directly impacted. Depending on the number of employees you have, you may have to give them significant notice that they are losing their jobs. Even if you aren’t legally required to give people notice, it is the best moral option to let people know what is happening as soon as you can so they can make the necessary financial and practical changes in their lives. 

Sell Assets and Repay Debts

You will also need to sell any assets that your business will no longer be using, such as office furniture and manufacturing equipment. Ideally, this money can be used to settle any outstanding debts. If there’s more debt than you can pay, it may be necessary to file for bankruptcy. 

Remember that even though you are closing down your business, a lot is still at stake. It’s important to get this process right. Drucker & Mattia is here to help. Give us a call at (718) 458-2312 if you’re ready to get started. 

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Drucker & Mattia PLLC

When you’re facing legal issues or pursuing a lawsuit, skilled legal counsel makes a big difference. At Drucker & Mattia, PLLC, we specialize in a wide range of legal areas to meet the needs of a diverse client base.

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