A Limited Liability Company—commonly referred to as an “LLC”—is a hybrid legal entity that combines some of the advantages of partnerships and corporations. An LLC is flexible, it can operate with less formality, and it is often ideal for many small businesses. Our attorneys assist clients in setting up Idaho LLCs and in preparing the important Operating Agreements. Whether you are doing business in Boise or Nampa, we offer legal advice throughout the Treasure Valley.
With our uncertain economy, we know that several Boise start-up LLCs and even more established Idaho companies have encountered financial difficulties. Some businesses stumble, and the LLC must be dissolved or substantially restructured. Occasionally this leads to disputes between Members regarding LLC assets and liabilities (particularly if LLC documentation is limited or if the entity’s financial records have been casually maintained). Let our attorneys know if you need some direction on what steps you should be taking to either keep the LLC going or if it is time to close the doors for good.
Winding up is the term used for closing a business for the final time. It is the time period between dissolution and filing a Statement of Dissolution with the Secretary of State. There will be questions on who is the proper person to see it through to the end, and what liability comes with closing the business. The gathering of assets and resolving liabilities will take time and effort. You should have a plan in place to prepare everyone for possible bumps in the road during this time.
From a practical perspective, winding up is complete when all debts of the Limited Liability Company have been paid in full, or some provisions has been made for all of them, and the remaining property has been distributed to the LLC members. However, the business isn’t fully closed until the proper filings have been made.
The key to properly closing your business is ending the same way you started. With a clear written document defining the relationship between the LLCs members. Having an Operating Agreement that addresses the winding up of your LLC is not setting the company up for failure. It is intelligent business planning that will provided a clear path during the good times, and guidance if things don’t go as you had hoped.
If you find yourself just starting out or if you are in a struggling LLC, please contact our attorneys to discuss your options.