Why You Should Hire A Lawyer When Dissolving A Business
The law makes it possible to establish, operate, and close a business without ever hiring a lawyer, but as in other situations where representation by professional attorneys is not a requirement, it is a good idea if large amounts of money are at stake. People can and do represent themselves in family court, workers’ compensation disputes, and probate court, but when the case is sufficiently complicated, they usually choose to hire a lawyer. Working with a lawyer when you are just establishing your company can help you prevent problems down the road; you can be sure that you are choosing the right business structure and that your articles of organization make the company operate the way you want it to. It is even more important, though, to work with a Los Angeles business litigation lawyer when you are winding up your business activities and dissolving an LLC.
Preventing Disputes Among Business Partners
Some people choose the limited liability company (LLC) business structure without putting a lot of forethought into it, simply because they like the idea of their personal assets being safe from creditors in pursuit of debt repayment from the business, but there is a lot more to an LLC than simply a “get out of debt free” card. Every LLC must make detailed rules, but which rules you set for your LLC are up to you. Your LLC’s articles of organization should include procedures for dissolution, but not every LLC includes these provisions. If you and the other members of the LLC have decided to dissolve the LLC, and your articles of organization do not indicate how you should do this, you should hire a business dispute lawyer. If your articles of organization document has provisions about dissolution, a lawyer can still help you follow them properly and avoid disputes about them.
Like Probate for Recently Deceased LLCs
Once you dissolve your LLC, you are not finished. There are still winding up procedures you can do before the LLC files its final tax return and ceases to exist. It is a little bit like how the estates of recently deceased people must go through probate before the heirs can get their inheritance, except that, with LLCs, the process need not take place in court. For example, you must settle with creditors before canceling the LLC. You can’t negotiate the amount of tax obligations and court judgments, but you can almost all other debts. The fairest way to do this is to offer every creditor the same percentage of the amounts you owe them. For example, you might offer every creditor 50 percent of the face value of the debt. Therefore, if you owe Entity A $100,000, offer to pay them $50,000, and if you owe Entity B $60,000, offer to pay them $30,000.
Speak With a Los Angeles Business Litigation Lawyer
A Los Angeles business dispute lawyer can help you dissolve an LLC and wind up its unfinished business. Contact Obagi Law Group, P.C. in Los Angeles, California to discuss your situation or call 424-284-2401.