Preparing for the Year End

Hour glass showing 2020 moving into 2021

Preparing for the Year End

Is there anyone not cheering for 2020 to come to a close?

2020 is a year we’ll be talking about for generations to come. Never mind the old folks’ legends of hiking miles in the snow to go to school. Our kids will be telling their kids stories that are truly inconceivable. Yup, kids couldn’t go to school for 9 months…and counting, couldn’t play with their friends, couldn’t hug their grandparents, and we all had to wear masks everywhere we went… Thankfully, this too shall pass, hopefully, sooner rather than later. In addition to the disruptions to our personal lives, unfortunately the pandemic has also resulted in devastating business operations disruptions which will force many businesses to shut down or perhaps withdraw from states where employees have been laid off.

Dissolutions and Withdrawals

In addition to IRS responsibilities, timing is everything when it comes to dissolutions and withdrawals. In Delaware, if an entity exists on January 1st, another year of franchise taxes is immediately assessed.

Effective Date

In most states, you can opt for an effective date that falls within 30 days of submitting the filing. So, for instance, a dissolution could be filed on December 1, with an effective date of December 31.  Clearly, it is wise to strategize regarding the process and timing of dissolving and withdrawing.

Tax Clearances

Certain states, in particular, Arizona, Louisiana, Missouri, New Hampshire, New Jersey, New Mexico, New York, Pennsylvania, Tennessee, Texas, Utah, Washington, West Virginia each require some tax (and sometimes employment) clearance in order to dissolve or withdraw. In states that require clearances, it is never too early to get started by making sure all state tax returns have been filed.

Annual Reports

Most companies will need to file an annual report for the current year before filing a certificate of dissolution. Again, timing is important because in some states, such as MA limited liability companies, does not require an annual report so long as the company is dissolved prior to its anniversary date. This saves the company $520! Therefore, it is financially beneficial to determine requirements ahead of time.

Dissolution/Cancelation Process

Whether your client needs to dissolve an LLC or a corporation, Velawcity Legal Support Services paralegals can assist with the process by drafting, coordinating signatures, and filing:

             Corporations             LLCs
·  Consent of Directors and Stockholders·  Consent of Members/Managers
·  Notify creditors, if required·  Annual Reports, if applicable
·  228 Notices, if applicable·  Certificate (or articles) of Cancelation
·  Plan of Liquidation·  State Withdrawals
·  Annual Reports·  IRS Notification
·  Certificate (or articles) of Dissolution
·  State withdrawals
·  Tax Clearances
·  IRS Form 966

 

Summary

If you need assistance with dissolutions and withdrawals, we’re happy to help! Velawcity Legal Support Services will handle as much or as little of the dissolution or withdrawal and correspond with your client, if you’d like.  Or we can report to you and never contact your client. Velawcity provides on-demand support for virtual and traditional law offices. Contact us to learn more about how we can help maximize operational efficiency, meet client expectations, and adhere to legal and ethical rules.

More About Velawcity Legal Support Services

Velawcity Legal Support Services is an Alternative Legal Services Provider (ALSP) that provides competitive edge solutions to empower lawyers nationwide with high-quality, efficient and cost-effective paralegal services. Velawcity paralegals are virtual, on-demand senior paralegals, each with a minimum of fifteen years’ experience working in law firms and corporate legal departments. Whether you need assistance with year-end dissolutions, a daily addition to your legal team, periodic paralegal support, quick research or assistance on a specific project, Velawcity Legal Support Services is your cost-effective, responsive team member.

DISCLAIMER: Velawcity Legal Support Services provides services exclusively to lawyers and their clients. Velawcity does not provide legal advice. To determine which entity is best suited for your business, please consult a licensed business attorney or contact us to be put in touch with one of our attorney clients. 

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