Any business can simply close its doors and shut down. However, if a business owner in Alberta wants to legally terminate the concern, a formal dissolution with the acknowledgement of authorities is necessary. Based on applicable business and commercial law, the concern will have no additional commitments related to taxes and debts, and further fines and fees will be avoided if the business is closed properly.
Reasons for deciding to dissolve a business often include cash flow problems that make it untenable to sustain operations. Sometimes, accounting systems that don’t track income and expenses properly may be the issue. Other times, tax obligations become insurmountable.
Under any circumstances, running a business is a challenge. Despite the hard work, a lack of skills in some areas may sink the ship. Of course, many times the problems are larger than the business itself, particularly when market or economic conditions impact the bottom line. In other circumstances, partnership disputes may breed discontent and the need to dissolve. The prospective retirement of the business owner may also lead to a need to close up shop, particularly when there is no apparent successor to run the concern.
Ongoing litigation is a threat to any business, particularly when products liability claims involve massive amounts of money. Simply shutting the doors of the business will not forestall liability, but a formal dissolution will. A Alberta business owner can consult with an experienced business and commercial law attorney at the first sign of any of the above problems. Together, they might find a way to save the business, but if dissolution is the appropriate remedy, doing it with skilled guidance and support is typically the best course of action.
Source: chron.com, “Reasons for Dissolving a Business“, Valerie Bolden-Barrett, Accessed on March 24, 2017
