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What Is Involved in the Dissolution of an Illinois Business?

Posted on in Dissolving a Business

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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.

If you are the sole owner, the decision is yours and only yours, meaning you do not have to consult with anyone else or get their permission to close down. However, if you have a business partner, officially ending that relationship may require permission from a board of directors, shareholders, or anyone else who may have stock in the company. It may also be necessary to consider the following important factors:

  • Tax implications or liabilities
  • Contracts/leases on rental property
  • Debt owed to creditors/lenders

When going through the dissolution of a business, various issues will determine what kind (if any) compensation you will receive, such as how assets are divided according to business contracts or other written agreements. This can also depend on the company’s cash flow. Complications and disputes often arise during these situations. Figuring out how much your share of the business is worth may require a forensic accountant as well as your attorney. In some cases, it may be possible to negotiate a buyout amount in the event one partner chooses to leave and the other partner keeps the business open. The entire process can take weeks or months, and that can vary depending on how long it takes to settle all of the obligations. Once the proper documents are filed, the state may take 7-10 business days to process them.

Contact a DuPage County Business Lawyer

Building a company from the ground up can be a lifelong dream come true. However, staying in business during these uncertain times can be challenging. If you or someone you know is considering shutting your doors due to the COVID-19 economic crisis, it is important to seek professional legal counsel. Discussing your concerns with an experienced Wheaton, IL business law attorney can help you avoid making costly mistakes when you decide to close your business. The skilled legal team at Stock, Carlson & Duff LLC is well-versed in Illinois business law, and we are prepared to assist you with all of your legal needs. To arrange a private consultation, call us today at 630-665-2500.

Sources:

https://www.ilga.gov/legislation/ilcs/fulltext.asp?DocName=080500050K12.40

https://www2.illinois.gov/rev/businesses/Pages/close.aspx

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