Becoming a business owner takes tenacity and fortitude. Regardless if you run a small or a large company, it takes a lot of time and effort. In addition, societal changes can impact the success of any type of business. The COVID-19 pandemic has resulted in not only a global health crisis but an economic downturn as well. With many Illinois establishments forced to close their doors, business owners may be taking a long, hard look at their losses and whether or not they can afford to stay in business. For those considering dissolving their Illinois business, it can be a very emotional decision, and there are also many legal aspects to be aware of. A skilled business law attorney can help protect your rights while you navigate the steps of the dissolution of your company.

Illinois Business Laws

Under Illinois law, businesses may be dissolved involuntarily by court order as a result of a lawsuit by creditors, or by the Illinois Secretary of State for failing to file an annual report or pay annual fees. They may also be dissolved voluntarily by shareholder consent.

Closing a business is a complex, multi-step process that must be done with the utmost efficiency. Failure in any aspect can result in serious consequences with both legal and financial implications. If you are facing the closure of your business, the following information can help. It also explains where and how to find experienced assistance.

Creating an Exit Strategy

No two companies are exactly the same, and it is unlikely that any two will go through closure in exactly the same way. This is why exit strategies are so critical. An outline of whom you will need to talk to, tasks that will need to be completed, an overview of what you hope will come of the closure, and an examination and possible solutions to any issues that may arise, this critical step can help to ensure you have covered all the aspects of your company's closure. It can also help you stay focused on the next task at hand as you navigate through the arduous process.

If you are considering dissolving your business, there are many things to be aware of before you begin the proceeding. The first is that you should speak with a business attorney to determine the bests steps to take and whether or not your business is applicable for tax breaks and what financial legal burdens you have to handle before you walk away. Also be aware that you have to file an annual tax return for the year that you go out of business, even if your business closes in the first quarter. Other financial burdens that must be resolved include the closing of all accounts and the resolution of all business debt.

These tax returns are in addition to the reports that you must file to officially dispose of your business, which must be filed no matter what type of business you operate. This is true for a corporation, S corporation, LLC, or trust. If you fail to file these dissolution papers, you could still be liable to pay taxes and filings. If you are operating as a partnership or sole proprietorship, you may not be required to fill out these dissolution papers. If you have any question as to whether or not you should file these, it should be discussed with a legal professional.

Another major step is to make sure that you have canceled all registrations, permits, licenses, and business names. This ensures that you will no longer be responsible for any additional payments and responsibilities. Most of these filings will be done at the state or local level, which is why it is important to work with a legal professional who is in your area and familiar with local laws.