San Diego Corporate and LLC Attorneys Help Transition Your Business
There are several reasons to dissolve an LLC in San Diego. The underlying business may no longer be viable. Minority members may feel they are being mistreated and their rights under the corporate documents and operating agreement are not being honored. There may be an impasse or disagreement among the managing members, or there may be issues related to commingling, mismanagement of money or even fraud. The experienced business attorneys at the Watkins Firm bring decades of practical knowledge and expertise to these situations to ensure that the process is as smooth as possible and that all legal requirements are completed. We are almost always able to help establish common ground in situations where there is duress between the parties, and help to achieve the best outcome for the LLC based upon the situation at hand.
The Processes Involved with Dissolving an LLC
The process for the dissolution of an LLC can be as simple as a few steps, or it can a complex process involving a lawsuit brought by one or more of the members. The owner(s) or member(s) associated with the LLC want to be protected from any future liability, and most want to ensure that the process is managed completely and thoroughly. The core issues in a business dissolution include:
- bring the operational aspects of the LLC to a close
- resolve any outstanding business litigation or disputes
- retire all debts, taxes and liabilities owed by the company
- file all appropriate tax returns and forms with appropriate taxation and governing entities
- distribute any remaining profits and assets
The operating agreement should specify a process for ending the company’s business operations and closing the doors. If the LLC was formed for a specific purpose – such as the acquisition of a restaurant, and the deal doesn’t go through the operating agreement and corporate documents usually dictate the dissolution of the LLC. In many cases, a formal meeting be convened and a vote must be taken amongst the members.
In more contentious situations, a judicial dissolution may be sought by one or more of the members. There are specific reasons why an LLC might require a judicial dissolution including abandonment of the company, deadlock in the management team, or in cases of abuse of authority or fraud. Judicial dissolutions are quite costly in terms of time and capital, and can drain valuable corporate resources. Alternative resolution may be sought through negotiation or mediation, but in some cases it is in the best interests of our clients to file the lawsuit and force the dissolution.
Closing Up and Completing Dissolving the LLC
Usually one party is appointed as the “liquidating member” to manage the process of the dissolution, to disburse payments to creditors and appropriate parties, and to complete all filing requirements necessary to conclude business operations. The end of an LLC is usually not a pleasant experience, and emotions are often raw. The attorneys at the Watkins Firm will work with you closely each step of the way to ensure that all matters are handled and that all loose ends are secured.
If you are a member in an LLC and need to close a business, are concerned about the direction of the business or are interested in learning more about dissolving an LLC, we invite you to contact us or call 858-535-1511 for a complimentary and thorough consultation. We will discuss the unique circumstances surrounding your business, and provide sound counsel and strategic options to resolve the issues at hand and help you to move on to your next opportunity.