Steps to Dissolve Your Indiana Business
- Establish a valuation of your Indiana business
- Compile a full account of your Indiana business’s debts
- Identify Indiana’s official dissolution document
- Follow instructions in your Indiana business’s operating document
- Cancel your Indiana business’s permits, licenses, and registrations
- Wrap up your Indiana business’s legal and financial obligations
- File the Articles of Dissolution for your Indiana business
Even the most successful businesses may one day choose to close. This isn’t uncommon at all. In fact, there are many reasons a business might choose to dissolve:
- To avoid having to file for bankruptcy
- So that the owners may retire
- To move on entirely and start a new business venture
No matter what the reason for the dissolution, however, it’s imperative that the process is done correctly. Failure to do so can lead to consequences such as:
- Continued tax liability
- Further reporting requirements with the state
- Possible fines and other financial penalties for the business entity itself and its individual owners
- Impacts on the credit and future business ventures of the owners of the business
To avoid these types of negative impacts, you’ll want to ensure that you know how to properly dissolve a business in Indiana. However, before ever even starting the process, it’s important to make sure that the business was formed properly to begin with.
The better you plan out your business from the start, the less likely you’ll be to run into problems later on. Looking to set up a business in Indiana? Use our LLC and corporation formation services to help you start your entity off on the right foot.
Before dissolving your Indiana business
Work now can save a significant amount of work later. Thus, before dissolving your Indiana business, there are a few things you will need to do.
Dissolving a business is more complex than you might think. There are a number of steps you’ll need to take and a great deal of information to gather ahead of time to ensure that the process is completed as efficiently as possible. This is why it’s crucial to establish a secure and thorough record of all dealings for your business.
Doing all this legwork at the outset might feel tedious. However, know that this will pay off in the long run.
Want to know more about what it takes to dissolve an Indiana business? Look no further. Use our guide to learn more about how to close a business in Indiana and what you can do to make the process smooth and efficient along the way.
Step 1: Establish a valuation of your Indiana business
The first step to properly dissolve an Indiana business is to establish a valuation. Importantly, however, you will want this valuation to be as accurate as possible.
To determine a proper valuation for your entity, first gather all available information about the business’s assets, including any real estate, inventory, equipment, and other items of value owned by the business. Also, be sure to gather any documents related to the business and its operations, such as tax information or contracts with third parties.
Determining an accurate valuation for your business prior to dissolution is critical. Thus, if you’re uncertain about how to value parts of the business, don’t feel like you have to guess. Instead, err on the side of caution, and hire a professional who can assist.
Gathering this information can feel overwhelming, but we’re here to help. Use our Worry-Free Compliance service and our easy-to-use dashboard to help keep your business documents organized and make gathering your business information easier.
Step 2: Compile a full account of your Indiana business’s debts
As with your business’s assets, you will want to compile a full accounting of the business’s debts. Just because a business is dissolving doesn’t mean it no longer has to worry about its existing debts. Thus, you’ll need to capture how much money the business owes and to whom.
In fact, failure to do so can result in severe consequences for the business and its owners such as:
- Individual member/owner liability
- Fines and other financial penalties
Don’t get your soon-to-be-dissolved business into trouble if you can avoid it. Instead, obtain an accurate accounting of your business debts as soon as you’re able.
Step 3: Identify Indiana’s official dissolution document
After determining the assets and debts of the business, you’re ready to move forward and identify the official dissolution document in your state.
This is called the Articles of Dissolution for both corporations and LLCs (limited liability companies) in Indiana. The form can be completed and filed electronically online with the Indiana Secretary of State Business Services Division.
Step 4: Follow instructions in your Indiana business’s operating document
While you must of course follow the proper statutes and regulations for filing your dissolution paperwork with the state, you must also be sure to follow any applicable instructions in your business’s governing documents.
If your LLC has an operating agreement that discusses dissolution, you must comply with those rules. This is also true for corporations whose bylaws address rules for dissolution. However, if no such governing documents exist for your Indiana business entity, the default statutory rules will govern how to dissolve an LLC in Indiana or a corporation.
While not all entities must draft governing documents, having such documents can ensure that there are clear rules in place regarding the governance, management, and structure of your business. If your Indiana LLC doesn’t have an operating agreement, use our LLC operating agreement template to help you get started. From there, you can more easily and effectively customize the rules and procedures to fit the needs of your business, which can in turn help to prevent confusion and disputes in the future.
Step 5: Cancel your Indiana business’s permits, licenses, and registrations
Next, it’s time to cancel any business-related licenses, permits, and registrations that you’ve previously obtained for the entity. Many businesses are required to obtain some form of permit or license and pay the appropriate fee to legally operate within the state. Additionally, many of these licenses and permits can be renewed automatically.
However, once you stop operating your business, you’ll no longer need these licenses. Thus, don’t get stuck paying for anything you don’t need. Rather, make sure you promptly and properly cancel and permits and registrations the business no longer requires.
Step 6: Wrap up your Indiana business’s legal and financial obligations
At this stage, you can start to wrap up any remaining legal and financial obligations of the business. This might include:
- Making final payments or other earned benefits to any business employees
- Filing final state and federal tax returns
- Canceling your Employer Identification Number (EIN)
And as always, if you have questions about remaining tax obligations and implications for the business moving forward, be sure to consult with a certified tax professional.
Step 7: File the Articles of Dissolution for your Indiana business
Finally, it’s time to file the Articles of Dissolution to formally dissolve the business entity. Once you file the requisite paperwork with the Secretary of State, you will have completed the process to legally dissolve your Indiana business entity.
We’re here to help with your New York business’s needs
Not all businesses last forever. In fact, most won’t. Thus, it’s important to know how to dissolve an Indiana business so that you’re ready if and when the time comes. Properly forming your Indiana business and staying legally compliant with the state along the way can help to simplify the eventual dissolution process. Let us help you start, manage, and grow your business and help you stay compliant with Indiana law along the way.
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 Indiana?
To dissolve your Indiana business, you must file Articles of Dissolution with the Secretary of State. First, however, there are a number of preliminary items to take care of to make the dissolution process as smooth as possible.
- How much does it cost to dissolve an LLC in Indiana?
Fees vary depending on the type of document, entity submitting the filing, and a number of other factors. Additionally, such fees are always subject to change. Thus, make sure to check the Indiana Secretary of State’s website periodically to ensure that you have the most up-to-date filing fee information.
- How long does it take to dissolve an LLC in Indiana?
Filing the dissolution paperwork doesn’t take much time at all. However, it can take a significant amount of time to gather all the information about the business that you’ll need to submit the filing.
- How do I dissolve a nonprofit organization in Indiana?
The process for dissolving a nonprofit organization in Indiana is similar to the process for dissolving a for-profit organization. However, there is a specific Articles of Dissolution form that Indiana nonprofit corporations must complete.