Business Dissolutions and Restructurings in West Virginia
Being faced with the challenges of dissolving or restructuring your corporation or business entity is never easy.
Perhaps the business is failing, it can’t live up to its original mission, or maybe you accrued debt that you can’t repay because your business is in the red for any number of reasons. When situations like this arise, having the assistance of a qualified West Virginia corporate defense attorney not only benefits your business but also you, any other owners, board members, and shareholders, as well as your future business ventures.
Hendrickson & Long, PLLC specializes in handling complex corporate cases and has the skill and experience to help with your business dissolution or restructuring.
Ways a Company Can Be Dissolved
While one of the most common reasons a company may close its doors is low cash flow, there are often other factors in play. Dissolving your business is not an easy choice; however, sometimes that choice is made for you, depending on the details of your specific case.
Most corporate dissolutions fall into one of the following categories:
Administrative Dissolutions
An administrative dissolution is an action taken by the Secretary of State (SOS) that results in a business entity’s loss of rights, powers, and authority.
This dissolves a domestic corporation, LLC, or other statutory business entity if it has failed to pay fees imposed by the West Virginia SOS, failed to have a registered agent for thirty days, the period of duration has expired, or the business has failed to file its annual report within 60 days after its due date.
This type of dissolution is generally the least expensive and the easiest.
Still, it may leave a corporation exposed to potential liability as it doesn’t provide the same legal protections as a voluntary dissolution does.
Voluntary Dissolutions
When a corporation, namely the board of directors and/or shareholders, voluntarily decides to formally close their business, it ensures the following:
- Any taxes, fees, or penalties do not continue to accrue
- The length of time claims can be made is shortened
- Board members and shareholders are protected against personal liability
- The business is not considered a “sham” entity
In order to avoid potential legal challenges to your corporation’s dissolution, your lawyer will likely advise you to carefully follow all requirements and procedures in the articles of incorporation and the bylaws, and keep detailed records of the decision and process.
Formally dissolving a corporation may also preserve your business reputation for future ventures. If you wish to follow through with a voluntary dissolution, you can defer to your attorney for the next best course of action.
Additionally, if your corporation never commenced business, your lawyer can assist you with filing the necessary forms.
Judicial Dissolutions
This is the rarest type of corporate dissolution, when a judge or court decides to dissolve a corporation.
It’s only applied in cases of corporate fraud or internal discord. If this is the case with your business, trust that our firm has your back and will assist with the legal process.
In West Virginia, you have two years after the date of dissolution to reinstate your corporation. If you choose to do so, you must file an application for reinstatement with the SOS and include the necessary fees for the application, filing, and all past-due annual reports.
Why Restructure Your Corporation?
When a corporation decides to restructure, it’s generally because something is broken. Maybe the internal hierarchy needs to shift, or perhaps you’re under financial duress for any number of reasons and may be facing bankruptcy or liquidation. This could be due to poor earnings, excessive debt, or too much competition in your specific industry.
Whatever the reason(s) may be, sometimes a significant change is the best thing you can do to save your company and your future. Corporate restructuring is a complex process. There are laws and rules that must be followed in order to avoid potential bankruptcy or any other issues that may arise.
Legal Options To Help Your Business
To save your business, you should first consult with a corporate defense attorney from our office, who will help guide you through the entire restructuring process in a way that will best benefit you and your business.
By choosing to restructure with the assistance of our attorneys, you can rest assured that your best interests are held to and that things will progress more smoothly.
If you find yourself and your company facing these challenges, or you might be soon, don’t hesitate to reach out to our office to discuss your concerns. At Hendrickson & Long, PLLC, we strive to provide the best legal support to businesses across the entirety of the Mountain State, and we have decades of expertise to back it up.
When your business and your future are on the line, we’re here to help.
