Nothing lasts forever. This includes businesses and corporations that, at some point in time, will, for whatever reason, decide to cease operations. When this occurs, the business, before it can completely dissolve, will be required to go through a period of “winding up.” This process involves several legal steps necessary to “tidy its affairs” and handle the disposition of any remaining assets and/or debts.
There are certain rules and procedures with which a corporation will need to comply during the “wind up” process. Corporate employees and directors who do not dissolve the business per these rules and procedures may face a litany of legal issues. That is why it is critical to contact the seasoned team of Tennessee corporate dissolution attorneys at Douglass & Runger who will help to ensure that your business follows all of the legal steps necessary to successfully wind up your business.
How Is Winding Up Supposed To Work?
Once a business has decided to wind up and cease all operations, it is generally not permitted to take on any additional liabilities except those that are necessary for winding up the business’s affairs. The assets of the corporation are supposed to be collected and identified along with the liabilities and obligations of the corporation. These assets are then used to pay the debts and liabilities of the corporation so as to satisfy its creditors. Any remaining assets of the corporation are then distributed to the corporation’s owners – its shareholders.
At all times during the winding-up process, any employee or director involved is to continue acting in the interest of the business. A manager or director, for example, is not permitted to take advantage of his or her position during this time at the expense of the company, nor are they permitted to bind the corporation to new liabilities and obligations.
What Potential Issues Can Occur During Winding Up?
Disputes and legal conflicts can arise during the winding-up process. These disputes are most often connected to the obligations that managers and directors have toward the business as it winds up.
Contact A Skilled Tennessee Corporate Dissolution Attorney For Help
You likely obtained experienced legal assistance to form your corporation. As such, you should also obtain experienced legal counsel to help you manage the dissolution of your business. The knowledgeable and talented team of Memphis corporate dissolution attorneys of Douglass & Runger is able to guide you through the process of winding up the affairs of your business.
Business Law Matters
When starting a business, consider the legal structure: partnership, LLC, or corporation. Formation services can help. Plan for business succession and legal issues such as disputes and dissolution. Understand business law and legal resources for help.
