Speak with a Rochester Accountant before Dissolving a Business Entity

May 14, 2013

Most individuals that have businesses have done so in an effort to protect certain individuals. While some entities offer no actual protection, others can provide a safety net in some cases. When you dissolve these entities, you do open yourself for some problems and it will be important that you speak with your Rochester accountant to understand the risks that you are going to have when you go through this process. While a Rochester CPA might find minimal problems if a company has been properly managed, businesses that are behind on bills and taxes might actually encounter some headaches when dissolving their business entity.

This means that no matter if you have a LLC or corporation, if there are taxes owed, someone from the business will need to pay any outstanding taxes. Typically, the first group that has liability will be those that are in charge of the company. This can be directors, the president or others who would have some kind of responsibility at this time.

As a Rochester Accountant will tell you, the IRS will take action on all those involved until the funds are paid. This can include assets being seized, warrants being issued and even damage done to the credit scores of those who were in charge before the company’s entity ended up being dissolved. If all the taxes are properly handled and there are no liabilities, then there are minimal risks that will be associated with the dissolution of the business entity.

While working with a Rochester CPA, you will also find that personal guarantees will need to be addressed. At the time of dissolution, companies will require that all funds owed will be paid to them at this time. This means an additional liability will be incurred by those that remain ultimately responsible for these debts. It will be important that you finalize responsibility with all company vendors on who is responsible for each debt. It can be a good idea for you to reduce these debts prior to dissolving the business entity, as that can help you to reduce the liabilities that are faced and help to reduce complications that might otherwise arise at this time.

It is important that you do work with a professional when it comes time to dissolving a business entity. What you are going to find is that more often than not, this process is going to be a complicated one that will have its own set of liabilities and legal factors that you will need to take into account. By working with a Rochester consulting firm, you can ensure that your best interests are protected during the entire process.

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