Steps to Dissolve Your Mississippi Business
- Establish a valuation of your Mississippi business
- Compile a full account of your Mississippi business’s debts
- Identify Mississippi’s official dissolution document
- Follow instructions in your Mississippi business’s operating document
- Cancel your Mississippi business’s permits, licenses, and registrations
- Wrap up your Mississippi business’s legal and financial obligations
- File Articles of Dissolution for your Mississippi business
There are many reasons to consider dissolving your business. Sometimes things just change. Whether it’s the industry, your personal situation, a better opportunity that has come along, or just time to retire, it’s important to officially dissolve your Mississippi business before you completely wash your hands of responsibilities related to the company.
If you fail to officially dissolve your Mississippi business, the state still expects you to file business taxes and reports. If you don’t file these documents, you may face fines and financial penalties. Failing to stay compliant with the state could also make it more difficult to obtain credit for future business ventures. Just as you must register your business with the Mississippi Secretary of State, you must also dissolve the business in a similar fashion. If you’re already looking ahead to a new business venture, consider using our Mississippi LLC Formation or Corporation Formation Services.
Before dissolving your Mississippi business
We would be remiss if we didn’t mention things you could do ahead of time to be prepared to dissolve your Mississippi business. Establishing a secure and thorough system for business records is one of the best things you can do to prepare for business dissolution in Mississippi. Some of the most time consuming parts of business dissolution involves gathering information. We can help you keep on top of things as best as possible. Here are steps to take for proper Mississippi business dissolution.
Step 1: Establish a valuation of your Mississippi business
It’s important to understand how much your business is worth. Know what can be or needs to be liquidated. In a perfect world, your assets will cover your debt and have leftovers for you and your business partners, investors, or members.
Assets may include real estate, product inventory, equipment, buildings, and anything else that has monetary value. Information about third-party contracts and taxes should also be included. Some areas of your business may be hard to value. Consider hiring a professional to ensure accuracy in valuing your business prior to dissolution, especially if you’re considering the option of selling the business or business assets. Our Worry-Free Compliance Service and our dashboard can help you stay organized with much of this information, so there is less digging around.
Step 2: Compile a full account of your Mississippi business’s debts
Unfortunately, like your business, your debts won’t just disappear on their own. It’s important to understand how much you owe and to whom. Communicating payment schedules with creditors is important to avoid fees and penalties.
Failing to pay the company debts could result in personal liability for you as well as other owners or members. Debtors may opt to file a lawsuit or seek other legal remedies to be compensated. Generally, most businesses are structured to absorb liability and protect individuals. But if the business doesn’t take appropriate steps to pay creditors as it winds up, it may expose individual owners or officers to personal liability.
Step 3: Identify Mississippi’s official dissolution document
Upon formation, each Mississippi business entity must file a similar but slightly different formation document. Mississippi is one of few states that has both corporations and limited liability companies submit Articles of Dissolution to officially dissolve a business. The document should include the following information:
- Name of your corporation or limited liability company
- Date of dissolution authorization
- Method of dissolution authorization
- Effective date of dissolution
- Signature of an authorized agent
File your Articles of Dissolution online or by postal mail. Mississippi Articles of Dissolution take less than 24 hours to process online or 2-3 business days by mail.
Step 4: Follow instructions in your Mississippi business’s operating document
Operating documents aren’t required to legally operate your business in Mississippi, but they’re strongly encouraged. Each business entity type has a different type of document that includes similar information:
- Corporation: corporate bylaws
- Limited liability company: operating agreement
These operating documents detail how the business should be run, including things like
- Profit and loss distribution
- Member, shareholder, or partner responsibilities
- How to handle conflicts of interest
- Dispute resolution
- Transfer of ownership or shares
- The process for dissolution.
If no operating document exists, your business will have to follow standard state procedures. In most cases, there should be some sort of vote or approval by all invested parties in the business prior to the authorization of dissolution.
Though operating documents should be drafted at the time your business is formed, they can be drafted at any time. If you’re still working on your limited liability company operating agreement or looking ahead to your next business venture, consider using our Operating Agreement Template.
Step 5: Cancel your Mississippi business’s permits, licenses, and registrations
Just like that subscription you meant to cancel and got billed for again, certain permits, licenses, and registrations automatically renew. Make sure you go through everything your business is signed up for and ensure that you cancel it all. This could be anything from zoning permits, to food service licenses, event permits, or general local business licenses. You aren’t going to need them once you dissolve your Mississippi business. Check all federal, state, and local level licenses to make sure you don’t leave anything out. If you used our Business License Report, you should refer back to that document when doing this review.
Step 6: Wrap up your Mississippi business’s legal and financial obligations
Wrapping up your business isn’t going to encompass a simple hard stop. Make sure you’re following all federal and state guidelines for paying employees and terminating benefits. Alert debtors, creditors, and other relevant business partners about the dissolution. Though it may not be mandatory in all cases, it’s good business etiquette. File all final tax returns and cancel your Employer Identification Number (EIN) with the IRS. We can help you get a new EIN if you choose to start another business. Use our EIN Number Service.
Step 7: File Articles of Dissolution for your Mississippi business
Finalize the process by filing the Articles of Dissolution. Once the document has been processed, your business name will become available to other people forming businesses. If you change your mind about dissolving your Mississippi business, you have 120 days from the date of the dissolution to file a Revocation of Dissolution form along with a fee to reinstate your business.
We’re here to help you with all stages of your Mississippi business
Whether it’s formation or dissolution, we’re here to help you achieve your business goals. Dissolving a business includes a lot of steps that you may not anticipate. Let us help you stay organized and in compliance with Mississippi business laws and regulations while streamlining the process so you can get on to your next big thing.
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 Mississippi?
Receive approval from business members or shareholders, have the business valued, wind up all business dealings, and file Articles of Dissolution with the Mississippi Secretary of State.
- How much does it cost to dissolve an LLC in Mississippi?
State fees are subject to change. Check with the Mississippi Secretary of State for the most current fee schedule.
- How long does it take to dissolve an LLC in Mississippi?
Mississippi Articles of Dissolution take less than 24 hours to process online or 2-3 business days by mail.
- How do I dissolve a nonprofit organization in Mississippi?
Mississippi’s Nonprofit Corporation Act (NCA) provides for voluntary dissolution through a vote of the directors or a vote of directors and members, depending on the business structure. File Articles of Dissolution with the Secretary of State and adhere to all NCA provisions.