Steps to Dissolve Your Arkansas Business Today
- Establish a valuation of your Arkansas business
- Compile a full account of your Arkansas business’s debts
- Identify Arkansas’s official dissolution document
- Follow instructions in your Arkansas business’s operating document
- Cancel your Arkansas business’s permits, licenses, and registrations
- Wrap up your Arkansas business’s legal and financial obligations
- File Articles of Dissolution or a Statement of Dissolution for your Arkansas business
There may come a time when you choose to close your business. Maybe you want to take on a new business venture or the financial forecast for your company isn’t looking great. Whatever the reason, there are several important steps to take to officially dissolve an Arkansas business. Failing to follow the dissolution process could have negative impacts on you, other members or owners, and the company as a whole.
Even if your business isn’t in a great financial position or has a lot of outstanding debts, it’s important that you properly dissolve it. Otherwise, your business still exists, and the state expects tax payments, reporting, etc. To help avoid penalties or other consequences of not officially closing up shop, we’ll walk through how to dissolve a business in Arkansas and how we can help.
Before dissolving your Arkansas business
It’s important to have thorough documentation of all business transactions prior to dissolving your Arkansas business. Dissolution is part of what is known as “winding up,” which is essentially the process of shutting down a business. There are things you need to do before and after you file for dissolution with the state. Having your business documents in a safe and organized place will make the entire process much easier.
We also want to note that dissolution comes in three different forms. First, a voluntary dissolution is when the company’s members or owners decide it’s best to close the business and initiate the dissolution process. In this article we’re covering an Arkansas voluntary dissolution. Second, judicial dissolution is when a court orders that a business dissolve for failure to meet the state’s requirements. Third, administrative dissolution is when the Arkansas Secretary of State’s office dissolves the business because it’s not satisfying certain obligations, such as filing annual reports.
Step 1: Establish a valuation of your Arkansas business
Once you decide to move forward with dissolving your business, start by valuing your company. To determine its worth, take into account everything the business owns or is owed and subtract out debts and losses. Business assets include anything from real estate to inventory to brand and reputation. Collect any documents related to the business operations, such as tax information and contracts with vendors or other third parties. If this task seems a bit daunting, don’t hesitate to hire a professional to do the job. You want to make sure you’re getting an accurate valuation.
With our Worry-Free Compliance Service, we make it easy to gather the information you need to value your business. We keep your business documents organized right on an easy-to-use dashboard so you can access them at any time.
Step 2: Compile a full account of your Arkansas business’s debts
Business debts and liabilities factor into the value of your company. You need to account for business loans, outstanding credit, accounts payable, accrued expenses, etc. Again, bring in a professional to value your business if you’re not comfortable doing it.
Dissolving your business doesn’t make your debts go away. You’re still obligated to pay them and can face possible legal repercussions for failing to do so, such as personal liability.
Step 3: Identify Arkansas’s official dissolution document
Just as you file registration documents with the state to form an Arkansas LLC or corporation, you must also file dissolution documents to close your business. The Arkansas Business and Commercial Division is responsible for accepting and processing all business dissolution paperwork.
To dissolve an Arkansas LLC, you’ll file a Statement of Dissolution, which requires the LLC’s name, date of filing organizing documents, reason for dissolving, effective date of dissolution, and an authorized signature.
To dissolve an Arkansas corporation, you must file Articles of Dissolution. You’ll need the following information to complete the articles:
- Business name
- Date dissolution was authorized
- Number of shareholder votes that approved the dissolution, if shareholder voting was required
- Authorized signature
You can file the dissolution documents online, in person, or by mail. Be sure to check the fee schedule and include the correct filing fee with your paperwork.
Step 4: Follow instructions in your Arkansas business’s operating document
When you form a business, typically you adopt an operating document that governs how the business functions. LLC’s call this document an Operating Agreement, and corporations refer to it as their bylaws. An operating document is key when closing a business because it typically includes dissolution instructions. If your business doesn’t have an Operating Agreement or corporate bylaws, you default to Arkansas law.
Keep in mind that no matter what your operating document says, you must still file proper dissolution paperwork with the Arkansas Secretary of State’s office.
If you have an LLC, we can provide an operating agreement template to customize to fit your business’s needs.
Step 5: Cancel your Arkansas business’s permits, licenses, and registrations
Almost every business needs some sort of license, permit, registration, or certificate to run their company. Some of these automatically renew, so it’s up to you to do your research and cancel any sort of authorization you’ve been issued.
Step 6: Wrap up your Arkansas business’s legal and financial obligations
Dissolution doesn’t discharge or cancel your business obligations. Part of dissolving your Arizona business includes satisfying any legal and financial responsibilities, such as:
- Filing final tax returns (state and federal, if applicable)
- Cancelling the business’s Employment Identification Number (EIN)
- Paying off creditors
- Litigating any legal proceedings currently pending
If your business has employees, pay attention to the federal and state requirements regarding paying employees and providing earned benefits after the business closes. Bring in an employment lawyer if you’re unsure of your obligations to your employees.
Step 7: File Articles of Dissolution or a Statement of Dissolution for your Arkansas business
To legally dissolve an Arkansas business, you need to file a Statement of Dissolution or Articles of Dissolution in Arkansas with the Business and Commercial Division. Once the Division approves your dissolution paperwork, your business exists only for the purpose of “winding up.” During this period, you can’t conduct any more business since legally your company doesn’t exist. What you’ll be doing is paying off creditors, selling stock, distributing remaining assets, and tying up any loose ends related to the business. Once that’s all complete, your shop’s closed for good.
We can help you with your Arkansas business
Hopefully this article gives you a better understanding of how to dissolve a business in Arkansas. Yes, there’s a lot to do, but as long as you get your documents and paperwork in order, it’s totally manageable. With our Worry-Free Compliance service, we keep your business documents in a secure and organized place so you can get the information you need quickly.
Disclaimer: The content on this page is for information purposes only, and does not constitute legal, tax, or accounting advice. If you have specific questions about any of these topics, seek the counsel of a licensed professional.
- How do I dissolve a business in Arkansas?
To officially dissolve your business, you must file dissolution documents with the state. LLCs file a Statement of Dissolution, and corporations file Articles of Dissolution with the Business and Commercial Division. Once the office receives and accepts the paperwork, your company only exists for the purpose of winding up any final business matters.
- How much does it cost to dissolve an LLC in Arkansas?
The fees for filing dissolution documents are subject to change. It’s best to check the fee schedule for up-to-date fee amounts.
- How long does it take to dissolve an LLC in Arkansas?
The Business and Commercial Division usually takes two days from the date of receipt to complete a filing, but these times can vary based on the current workload. Keep in mind, however, this is just the processing time for the dissolution paperwork. As discussed above, there are many things to do to dissolve an Arkansas business, and it’s unknown how long each of those will take.
- How do I dissolve a nonprofit organization in Arkansas?
Dissolving a nonprofit is generally similar to dissolving a for-profit company. However, nonprofit organizations need to file Articles of Dissolution of a Nonprofit Corporation, which are different from the dissolution articles for profit organizations.