Business Dissolution (Closing a business)

Dissolution (Closing a Business)

Even if your business did not make money or file annual reports for several years, it may not be officially closed. Excluding trade names (DBAs), a business is not closed until a dissolution has been filed. If you receive an annual report reminder from our office, your business is still considered active and may be subject to business entity tax. Please take time to file a dissolution online and save yourself unnecessary taxes and other fees. Filing is free.

Please also note that “dissolution” is a term only used for domestic LLCs, stock, and nonstock corporations. If your business is not one of these entity types, the document you need to file may be a “cancellation” “withdrawal” or “renunciation.”

Steps to file a dissolution

There is no charge to file a dissolution. Please follow these steps to file:

Step 1: Refer to your Operating Agreement, which should tell you how to dissolve your business. Common steps include:

• Meet with business members to vote on closing the business.
• Split up business assets.
• Decide on a closing date.
• Make arrangements to pay off business debt.
• Contact your creditors.

Step 2: Review Business Tax Accounts - Make sure you pay all outstanding balances for:

• Sales and use tax.
• Employee withholding tax.
• Unemployment insurance tax.
• Interest and fees.

Step 3: Close Your Tax and State Accounts - Usually, you need to send a final tax return to the right agency to close your tax and state accounts. Check with your CPA for the exact details.

Step 4: Close Your Business Tax Withholdings - You need to stop your business tax withholdings, which means you’ll stop paying employee wages. Generally, you should:

• File the correct forms.
• Issue W2 forms to your workers.
• Send copies of these forms to the tax authority.

Step 5: Close Your Unemployment Tax Account - Contact the Connecticut Department of Labor to close your unemployment tax account.

Step 6: Close Your Business Bank Account - Contact your bank to find out how to close your business bank account. Make sure to leave enough money in the account to pay off any debts and creditors. If not, creditors might go after your business members for payment.

For more details, talk to your legal team and accountant to ensure you properly dissolve your business.

Once you have successfully filed the dissolution, your business will be dissolved. There will be no additional review by our office, and you won’t be required to file past due annual reports.

You will also have to submit a close request through our ReEmployCT website. If you don't have credentials you will have to create them.

Notify CT Paid Leave of Business Closing

Please note that if you had one or more employees in Connecticut, you will need to take the additional step of notifying the CT Paid Leave Authority that your business is closed. For details on how to complete this process, visit CT Paid Leave Frequently Asked Questions --> Compliance --> What are the procedures companies must follow to notify us that they are closed/permanently shut down?