Steps to Dissolve Your Iowa Business
- Establish a valuation of your Iowa business
- Compile a full account of your Iowa business’s debts
- Identify Iowa’s official dissolution document
- Follow instructions in your Iowa business’s operating document
- Cancel your Iowa business’s permits, licenses, and registrations
- Wrap up your Iowa business’s legal and financial obligations
- File a Statement of Termination or Articles of Dissolution for your Iowa business
When the time comes to dissolve your Iowa business, you need to follow a few simple steps to do it correctly. If you don’t, the business will still be responsible for paying taxes, filing reports, and any other state requirements for an Iowa business. Even if your company is in a bad financial position and you just want to walk away, you can’t without repercussions. You, the other members or owners, and the business entity could face fines, penalties, and difficulties with future business ventures. The only way to avoid all this is to properly dissolve your company. Let’s walk through how to dissolve a business in Iowa and how we can help.
If you’re in the beginning stages of forming a business in Iowa, check out our Iowa limited liability company (LLC) formation service and corporation formation service. Our experts can help you start your Iowa business today!
Before dissolving your Iowa business
There are actually three different ways for a business to dissolve. In this article, we’re only covering an Iowa voluntary dissolution, where the business owners or members actively choose to shut down the business. Having secure, thorough, and accurate records of all business dealing is key to a smooth dissolution process.
We can handle your ongoing state filings with our Worry-Free Compliance service. We’ll send you reminders of upcoming deadlines and help you maintain your good standing status. It also includes our easy-to-use dashboard so you can keep all important documents in one place.
Step 1: Establish a valuation of your Iowa business
Knowing your company’s worth gives you a good understanding of where your company’s at going into the dissolution process. You’ll know whether you have to satisfy debts and what to distribute. Start by taking into account all your company’s assets, such as accounts payable, real estate, equipment, intellectual property, and inventory. You’ll also need to gather all documents related to business operations, which includes any contracts with third parties and tax information. With our Worry-Free Compliance service, we keep your business documents secure and organized on your personal dashboard. That way, you have access to this information whenever you need it.
If the whole valuation process seems daunting, don’t be afraid to call in the professionals. Having an accurate valuation is important, so you want to be sure it’s done right.
Step 2: Compile a full account of your Iowa business’s debts
Business debts factor into the valuation of your company. You need to know how much you owe and to whom you owe it. Remember, just because you’re closing up shop doesn’t mean your debts disappear. Your business must still satisfy its financial obligations or else the business owners could face personal liability.
Step 3: Identify Iowa’s official dissolution document
To officially dissolve an Iowa business, you need to file dissolution paperwork. For an Iowa LLC, the document to file is called a Statement of Termination. For Iowa corporations, you need to file Articles of Dissolution. Unfortunately, Iowa’s Secretary of State doesn’t provide a form for either document, so you need to create your own and include the information required by Iowa law.
A Statement of Termination document to dissolve an Iowa LLC must include the LLC’s name and a statement that the company is dissolved. To dissolve an Iowa corporation, the Articles of Dissolution need to have the following information:
- Corporation name
- Date dissolution was authorized
- If shareholders approved the dissolution, a statement that the approval was done in accordance with the law and the articles of incorporation
The Iowa Secretary of State handles all business filings. You can file your dissolution documents online, by mail, or in person. The Secretary of State’s office won’t accept any filings without the correct fee, so check their website for the most current amounts.
Step 4: Follow instructions in your Iowa business’s operating document
Most companies require owner approval to dissolve. To know your business’s specific dissolution instructions, check the company’s operating document. LLCs use an operating agreement, and corporations use corporate bylaws. Corporations have formalities when it comes to dissolving, and the process typically includes providing a resolution to dissolve for the shareholders to approve by voting. Although LLCs don’t have these same formalities, there is usually some sort of approval process necessary to dissolve. Regardless of what your operating agreement or corporate bylaws say, you must file the dissolution paperwork with the Secretary of State.
If your company doesn’t have an operating document, look to state law for instructions on how to dissolve a business in Iowa. We can provide your Iowa LLC with an operating agreement template if you’re still forming your business. Having the right language in your operating agreement will make the dissolution process much easier down the road.
Step 5: Cancel your Iowa business’s permits, licenses, and registrations
If you’ve done any business, it’s likely you have some combination of licenses, permits, registrations, or certificates. Federal, state, and local agencies provide authorization for business activities in the form of licenses and permits. Sometimes these automatically renew. It’s up to you to do your research and cancel any license, permit, or registration you may have before it renews.
Step 6: Wrap up your Iowa business’s legal and financial obligations
Ending your business doesn’t end your obligations. Some things you may need to take care of include, paying taxes, settling debts, and canceling your Employment Identification Number (EIN).
You must notify the IRS and the state that your business is closing. Check out the IRS’s Business Closing Checklist for some helpful information.
If your business has employees, make sure you’re abiding by federal and state laws regarding paying final wages and other earned benefits. An accountant or tax advisor can explain what’s required in your situation.
There’s no requirement in Iowa for you to notify the public that your business is dissolved. However, it may be a good idea to publish a notice of dissolution in the event someone brings a claim against your business at a later time. The publication is proof that you notified creditors and gave them the opportunity to bring their claim.
Step 7: File a Statement of Termination or Articles of Dissolution for your Iowa business
By filing a Statement of Termination or Articles of Dissolution in Iowa, your business is officially dissolved. It only exists for the purpose of “winding up” any business affairs, such as closing bank accounts, distributing assets, and tying up any other loose ends.
We can help you keep your Iowa business running smoothly from formation and beyond
If you follow the steps listed above, you’ll be on your way to closing one chapter and taking on whatever’s next. Maybe it’s retirement or a brand new business venture. Whatever your goals, we have the tools, expertise, and resources to help you with your business needs.
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 Iowa?
Dissolving a business in Iowa is a multi-step process that involves valuing your business, satisfying legal and financial obligations, and filing paperwork with the state. To officially dissolve your business with the state, you must file a Statement of Termination (for LLCs) or Articles of Dissolution (for corporations).
- How much does it cost to dissolve an LLC in Iowa?
This all depends on whether you bring in professionals to help dissolve your business. For example, you may hire an attorney to look over your operating agreement regarding the process to dissolve, or you might bring in a valuation expert.
There are also fees to file the dissolution documents, which are subject to change. It’s best to check the Secretary of State’s fee schedule for the most current fee information.
- How long does it take to dissolve an LLC in Iowa?
Since there are multiple steps to the dissolution process, the time it takes to dissolve an LLC in Iowa varies. For example, a small LLC with a few assets will likely dissolve much more quickly than a large company with locations in multiple states. Regarding the processing time to file the dissolution paperwork, it all depends on the office’s current workload. However, filing online is typically the quickest method.
- How do I dissolve a nonprofit organization in Iowa?
To dissolve a nonprofit in Iowa, you need to file Articles of Dissolution with the Iowa Secretary of State, in addition to winding up the organization’s affairs. The Articles must include the name of the organization, the date the dissolution was authorized, and a statement that the dissolution was approved by a valid method.