Dissolved Company Bank Account: Everything You Need to Know
A dissolved company bank account can be used for certain tasks when winding up your company.3 min read
2. Articles of Dissolution and Winding Up
3. Questions About Dissolution
A dissolved company bank account can be used for certain tasks when winding up your company. After you have completed the dissolution process, however, the account will no longer be accessible.
Using Your LLC Bank Account After Dissolution
After dissolving a limited liability company (LLC), it's common for business owners to wonder if their business bank accounts will remain active. Your company's bank account will remain active for as long as it takes to wind up your company, and the funds in your account are available for any associated costs. You won't, however, be able to use your account for any new business.
Your LLC will form under state law, and these laws will also dictate how you can end your company. Dissolution is the act of closing an LLC, and you must be sure that you're following the proper steps in order to satisfy all of your obligations and debts.
If you want to end your company, your first step should be researching the LLC statutes in your state. In your state's statute, you should be able to find the steps you will need to complete to end your company. The general steps for LLC dissolution are as follows:
- Your LLC members make the decision to end the company and vote on its dissolution.
- You file dissolution paperwork with your state.
- You sell company assets and use the proceeds of the sale to settle outstanding debts.
- You pay your company's remaining taxes.
Articles of Dissolution and Winding Up
Every state will have its own rules for ending an LLC, but in the majority of states, you will need to file Articles of Dissolution, or Articles of Termination. Establishing the end date of your LLC is the most important part of this document. While your end date can be the same day you file your Articles, you may want to give yourself a little extra time to wind up your company.
Some companies choose to file their Articles of Termination after the winding up process is complete, while others file their Articles right away and list a future end date.
Members of the LLC will have a certain period of time to wind up company affairs after dissolution has occurred. The main focus of the winding up process is resolving your company's remaining debts and liabilities. If your company is involved with any lawsuits, you will need to deal with these suits as part of the winding up process.
Your LLC members should maintain your company bank account for a period of time. You should make sure that your account contains enough money to settle your remaining debts, including those of which you may not be currently aware. If you discover a creditor after your company has dissolved, and your bank account does not have enough money to pay the creditor, they might be able to pursue LLC members' distributed assets to satisfy the debt.
After dissolution, you cannot use the funds remaining in your business bank account for new business. LLC members no longer have the authority to conduct business or do anything that would indicate that the LLC is still active. Your bank account can cover only essential winding up affairs.
Questions About Dissolution
When dissolving an LLC, it's common to have questions about the process, including what happens to your bank account. For instance, many people want to know if they can leave their company bank account open after the company's dissolution. When you end your LLC, you must dissolve the company completely, which means that you will need to close your bank account after winding up your business.
All of your company's assets should get distributed and your liabilities settled. If there is money left in your account after paying all of your creditors, the remaining funds should get distributed to your LLC's members based on their ownership percentage.
Your bank probably won't keep track of your LLC's status, so you will need to directly request that the bank close your account when your company is dissolved. Leaving your account open may expose you to personal liability, so you should make sure to close it.
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