Sadly, some plans don't work out

A small business represents a substantial amount of time, effort and money a person or team put into making a goal or a dream come to life. Unfortunately, those ambitions did not succeed as intended.

While we understand not wanting to let go of a dead small business, not properly dissolving the entity leaves the ownership at a major risk of future liabilities.

Frequently Asked Questions

What is an non-operating small business entity

An non-operating small business entity refers to a company that was once in operation but has ceased its regular activities and remains inactive for an extended period. Typically these entities have no active assets or liabilities tied to the entity; they are merely a shell of a company.

I didn't dissolve my LLC when I closed my business. Is that an issue?

Not dissolving your LLC when you closed your business can potentially lead to various problems and ongoing obligations, depending on your jurisdiction and the specific circumstances of your LLC. Here are some potential issues:

Ongoing Costs: In many jurisdictions, LLCs are required to pay annual fees or taxes, even if they are not actively operating. Failing to pay these fees can result in penalties and legal complications.
Administrative Requirements: Some states may impose ongoing administrative requirements, such as annual reports or filings, on LLCs. Neglecting these requirements can result in the loss of your LLC's good standing.
Liability: If you don't formally dissolve your LLC, you may still be personally liable for any outstanding debts, contracts, or legal obligations associated with the business. This means your personal assets could be at risk.
Taxation: Depending on your jurisdiction, the LLC may still be subject to certain tax obligations, including income tax or property tax, even if it's not generating revenue.
Creditors and Legal Claims: Creditors or individuals with legal claims against your LLC may continue to pursue those claims, even if the business is closed. This could lead to legal disputes and financial liabilities.
Reputation: A non-dissolved LLC with unresolved legal or financial issues can negatively impact your personal and professional reputation, making it challenging to start a new business or engage in other financial activities.

What does it mean my business is in "poor standing"

When your business is in "poor standing," it means it's not in compliance with state or jurisdictional requirements. This can result in an inability to legally operate, loss of limited liability protection, legal consequences, tax issues, and difficulties in obtaining contracts or financing. It can also harm your business's reputation and hinder dispute resolution. To address poor standing, you should rectify outstanding issues with state authorities, such as unpaid fees or compliance violations, to bring your business back into compliance and mitigate negative consequences. Consulting legal and financial professionals can be beneficial in this process.

Why Sell My Old Non-Operating Business?

Selling off a dormant, non-existent shell entity rather than trying to revive it just to dissolve it can be a more practical and cost-effective approach for several reasons:

Minimal Assets or Liabilities: Dormant entities typically have little to no assets or liabilities, making them relatively straightforward to transfer or sell. Reviving such entities would require unnecessary effort and expenses.
Time Efficiency: Reviving a dormant entity just to dissolve it involves bureaucratic procedures, administrative tasks, and potentially legal processes. Selling it directly can save time and effort.
Cost Savings: Reviving an entity often entails expenses such as reinstatement fees, tax compliance costs, and legal fees. Selling the shell entity can avoid these expenditures, making it a more cost-effective option.
Complexity Avoidance: Reviving a dormant entity may involve dealing with past compliance issues, tax filings, or regulatory obligations. Selling the entity as-is allows the buyer to navigate these complexities, sparing the seller from potential complications.
Market Demand: In some cases, there may be buyers interested in acquiring dormant shell entities for various purposes, such as renaming, rebranding, or establishing a new business quickly. This demand can create an opportunity for the seller to generate revenue from an otherwise defunct entity.
Legal Clean Slate: By selling a dormant entity, the seller can transfer any potential legal risks or obligations to the buyer, who can then choose to dissolve it or repurpose it as needed.

Non Operating LLCs are a Problem