Winding Down A Business

Unfortunately, this information may come in handy for some people…

When winding down a business, the type of business will determine the necessary steps that need to be implemented in order to dissolve an existing entity. This article will focus on a few of the more common types of business entities.

The Corporation

According to the Model Business Corporation Act (MBCA), the directors must adopt what is known as a dissolution resolution, and the majority of shareholders, or the shares outstanding must be in favor of the proposed resolution. The corporation must file articles of dissolution with the secretary of state, a procedure that can vary from state to state. The dissolution becomes effective after the filing.

After the proper paperwork is filed, a corporation continues to exist, but may only operate for the purpose of winding up, which is the collection and distribution of the proceeds from the corporation’s assets. Any existing creditors will be paid first, followed by preferred shareholders (if any), and then common share holders. When this process is completed, the existence of the corporation is terminated. However, this may not release a person from liability if they are action on behalf of the dissolved corporation. There may be issues such as back taxes, or failure to file annual reports that this individual would have the responsibility of resolving.

The Partnership

The dissolution of a partnership can have many of the same aspects of a corporate dissolution, however, the details can be markedly different from articles of incorporation in that partners may have made business agreement that suit the specific partners. Although laws vary from state to state, generally the distribution of the liquidated assets would be as follows: creditors, followed by what is owed to partners for other than capital or profits, then to partners capital and profit. Again, laws vary from state to state, and the individual business entity may have a general agreement regarding winding up of a business. If a partnership does not have such an agreement, the liquidation of the partnership can, and most likely will encounter legal challenges and other hurdles that could have been avoided by a dissolution agreement.

The Limited Partnership

In a limited partnership, the limited partner has the rights of creditor upon dissolution, although their priority is behind that of the general creditor. For example, if the limited partner loaned money to the partnership in the capacity of an outside entity, not a partner, then upon winding up, the limited partner may have a claim to recover the loan. Again, laws vary from state to state. As in the partnership, a dissolution agreement can help avoid such a possibility.

Sole Proprietorship

Winding down this type of business is potentially the easiest of all business forms, mainly since it quite often has no formal structure. In this case, liquidating assets and dissolving a sole proprietorship does not release the sole proprietor from incurred liabilities related to the business. The sole proprietor is responsible for any debt or legal issues stemming from the business.

With all of the above scenarios, it almost goes without saying to retain an attorney. Depending on how complicated the winding down of a business is, an attorney may be able to save corporations and/or partners a significant amount of money and potential legal trouble. Even if there does not appear to be anything that would prevent the smooth liquidation of a business, an attorney can at least examine the process and spot any potential problems.

Technorati Tags: business, dissolution

Los Angeles Mayoral Campaign Coverage Virtually Non-Existent

Did you know Los Angeles has a mayoral election coming up March 3? Many Angelenos aren’t aware of it either. But the fact that there has been virtually no press coverage regarding the election is no excuse.

It’s an embarrassment that the turnout is so low in this city. The current mayor, the racist, lech scumbag Antonio Villaraigosa, doesn’t even see a need to run a campaign at all. He runs a commercial here and there, but didn’t even feel the need to debate any of the candidates. Why should he? Without press coverage, many people are flat unaware that an election is upcoming, and for those that do know, Villaraigosa will be the only name they recognize.

It’s easy to hoodwink this town though. In the last election, voters approved a tax hike for themselves, thinking it was a tax cut. They didn’t understand the ballot measure, but voted on it anyway. Same deal extending term limits for the useless city council. People didn’t understand what they were reading (if indeed they could read at all), and voted the opposite of what they wanted. What do you expect? This is the same town that votes in the same hacks again and again, and when term limits finally do kick in, these crooks just move on to a different office and start the clock all over again.

Yes, Diebold plays a role in Los Angeles, but the people play an even bigger role, and these hacks are playing them like a violin. Los Angeles has one more chance in my opinion. His name is Walter Moore, and although he would be alone in a sea of sharks should he win, at least he would try, because he actually cares what happens to Los Angeles.

Walter Moore for mayor of Los Angeles, March 3.

Technorati Tags: Los Angeles, mayor, racism

Cap And Trade Assault

As if the U.S. economy needed a new way to lose jobs and lay siege to American business (the business that is still here), Barack Obama’s new budget includes a cap and trade scheme that amounts to the biggest tax increase ever. And that’s just for starters. No, they won’t use the “T” word in this case.

Even as scientists struggle to study global warming due to the huge frozen ice masses at the poles, Obama continues the global warming charade, and plans to make more than a few bucks from it (Remember, they’ve only been tracking this ice melt for 30 years). The scheme is to penalize businesses that emit more than a set amount of greenhouse gases. If that business exceeds that set amount, they would have to buy credits to continue emitting. It’s not clear what would happen if those companies just didn’t have the money to buy the credits. Layoffs? Almost a certainty. Shut down? Another potential consequence. Off-shoring? Companies are already looking that way. After all, there are plenty of exploitable cheap labor markets with no kind of cap and trade laws. Those would be American jobs heading over there.

Depending on who you ask, this could cost American businesses billions of dollars and millions of jobs. Just what we need right now.

You could make an argument that all the great empires of history were ultimately destroyed from within. Is this how the U.S. will go down?

Government Looking To Turn Your Children Over To The U.N.

The usurping convention, signed by Bill Clinton but never ratified by congress, has raised its ugly head again, this time being pushed by the Democratic lush Barbara Boxer. With the blessings of Barack Obama, all it will take is for the American public to continue to not pay attention, and your child’s ass will belong to the U.N.

The U.N., one of the most corrupt, slimiest, useless cancers ever created has come up with a document that would take complete control as to the way your child is raised. The language is so broad that virtually anything you do regarding the decisions being made for your child could not only be called into question, but overridden all together.

If this piece of shit is ratified by congress, where your child lives, what your child says and does, what your child’s religion is, and who they associate with will no longer be up to you. If junior wants to hang with a Frank Marshall Davis clone, you’ll have no choice but to allow it. If the child tells you to fuck off, well, that’s just freedom of expression. If the child doesn’t even want to live with you-well they have that covered as well.

This would be become the law of land if ratified, citing the same Constitution that is currently being dismantled by the bogus Obama administration. How’s that for nerve?

Senate Against-And For Fairness Doctrine

Called it ambivalence, call it party politics, call it politicians once again not reading what they’re voting for, but the Senate has managed to pass an amendment that would bar the FCC from reinstituting the fairness doctrine.

The amendment put forth by Republican Jim DeMint passed easily in the Senate, despite the fears that a Democratic controlled Senate would try to ram something like the son of fairness doctrine through. Well it didn’t happen. Or did it?

At the same time DeMint’s measure was passing handily, the same Senate was passing the polar opposite, submitted by Democrat Dicky Durbin. His amendment would require the FCC to twist media arms throughout the country in an effort to induce radio stations to create business killing programs that nobody wants. Those are business killing programs that even the Dems don’t want. But that’s not the point is it? Durbin’s point is to silence anybody who doesn’t agree with the messianic agenda.

I wonder if Dick’s doctrine would apply to television as well. How about a Dobbs/Maddow show? Olberman/O’Reilly? Beck/Matthews? That would be entertaining. Not informative, but entertaining.

Funny though, the Repubs and Dems battle over what’s fair, but throw and independent in the mix and they’re both on the same team. Hypocrites all around…