BUSINESS LAW IN CONNECTICUT AND NEW YORK

John Takes it Personally

It may be your Business, but John takes it personally.

Plain and simple, he solves business problems, not legal problems.

John is a different kind of lawyer.  He has run small businesses and participated in large ones.  He knows that you need practical solutions that can be implemented.  He knows the solutions have to blend the law, finance, business, and people.

He can read your financial statements as well as your accountant.  He knows tax as well as your tax adviser. He can review your insurance issues as well as your agent.  He has had to worry about 40 people, making payroll, getting health insurance, signing leases, and keeping the IT running.  He’s seen how both small and big companies do it.

He also knows that business is about people.  You, your family, your employees, and your partners.

Focus on Local Businesses

John solves problems for small and medium sized local businesses in Connecticut and New York.  He helps corporations, limited liability companies and partnerships.  He enjoys helping entrepreneurs and businessmen.

He addresses issues from from start-up to sale.  He solves issues related to succession planning and other transitional events.  In between, he addresses the operational issues.

So whether your business is in Brookfield CT, Mount Kisco NY or you are looking for Business Lawyer Danbury, CT John can help.

Talk to John to avoid missteps that can cost real money.

Issues He Addresses

• Contract Drafting, Review, Contractual Issues & Negotiation
• Business Entity Formation (LLC, Corporation, Partnership)
• Start up Capital Structures
• Shareholder, Partnership, and Operating Agreements
• Outside General Counsel
• Purchase and Sale Agreements
• Structuring Reorganizations, Mergers and Acquisitions and other types of business combinations, and divestitures
• Due Diligence
• Dissolution of Businesses
• Business transactions
• Partnerships
• Corporations
• Limited Liability Companies
• Business Planning
• Business Structuring
• Employment Agreements
• NDA’s and Confidentiality Agreements
• Employment Issues
• Insurance Considerations
• Business Financing

Connecticut and New York often have unique laws which require special planning.

Steps to Take When Starting Your Business

Working with a business lawyer Danbury, CT business owners rely on will tell you that to see your business thrive, several planning steps will need to be taken. For many starting their own business begins with an idea and chances are, you are willing to do anything to see your business become a success. Turning that idea into a successful business will take the assistance of an experienced lawyer to advise you on the proper steps to take. Contacting Sweeney Legal, LLC, can help start a business, and advise you on critical legal matters for years to come. 

Step #1: Determine Business Structure

When starting a business, you will first need to determine the proper formation of your business. This will ensure that you are following legal requirements and tax implications as you begin operating. There are several formations that you may choose from, and a lawyer can help determine the most appropriate type by learning about your business and listening to your needs. Common types of business structures include:

• Sole Proprietorship
• Limited Liability Company
• Limited Liability Partnership
• Corporation
• General Partnership
• Cooperative

Step #2: Register Your Business Name

It will be critical to register the name of your business. Choosing a name sets you apart from your competitors and attracts your clientele. Once you have selected a name, you will want to do everything you can to protect it. First, you will need to make sure that the prospective name is not already in use, which our Danbury, CT business lawyer can help you with. You will then need to file paperwork to trademark your business name, as this will ensure that the name is protected. 

Step #3: Federal Tax ID 

You will need a federal tax identification code so that you can function as a business. Your Employer Identification Number (EIN) can be obtained through the IRS website and will be critical to hire employees, pay employees, file taxes, and open bank accounts for the business. Be aware that in some states, you may require a state identification code as well. 

Step #4: Permits and Licenses 

Depending upon the type of business you have formed and the service or product you are offering, you may need to obtain permits and licenses. Both federal and state licenses may be necessary. Examples of licenses and permits include zoning and land use permits, health department permits, liquor licenses, and more. 

Step #5: Obtain Insurance

Obtaining the right insurance will be critical to ensure that your business is protected should the unexpected occur. Without insurance, your assets could be at risk, and you could face financial ruin, which could be the downfall of even a successful business. Necessary coverage includes workers’ compensation insurance, general liability, product liability, disability insurance, and commercial property insurance. 

Dissolution of a Connecticut LLC

Wrapping up a Connecticut LLC is not rocket science, but it is a lot of work.  If you want to ensure you don’t have liability, you better do it right. Chances are you will need some help from a good Business Lawyer and perhaps a good Tax Lawyer.  You’ll probably involve your accountant too.

There are various steps necessary to dissolve and wind up a CT Limited Liability company.  

Summary

The Business Lawyers know that CT law allows the LLC to dissolve under state law and then wound up by its legal representative.    The person winding up the affairs of the LLC should settle items, pay creditors, discharge the liabilities of the LLC, wind up the corporation, pay the taxes, close the business, dispose of and transfer property, and distribute any remaining assets. The representative also has to handle any lawsuits on behalf of the LLC and will need to consult a Business Lawyer on these.  The LLC essentially continues to exist during its winding up phase and can bring a lawsuit or face a lawsuit.

The CT law governing Limited Liability companies can be found at the Uniform Limited Liability Company Act, Chapter 613a CGS 34-243 to 291 and you can certainly read it even if you are not a lawyer.

The procedures to wind up an LLC are as follows:

• First, the LLC members should approve a resolution to dissolve the company and adopt Articles of Dissolution.
• Second, the company should be dissolved with the CT Secretary of State and withdraw from any other jurisdictions in which it was authorized to do business.
• Third, the representative should settle and close the LLC’s activities and affairs and the creditors should be paid and assets distributed.
• Fourth, the tax returns should be filed, and tax accounts terminated, and you may need a Tax Lawyer to help here.
• Fifth, business licenses and permits should be canceled.

The Secretary of State has a website portion addressing dissolution and the DRS has a website portion addressing the tax winding up process.

Detailed Explanations

Corporate Action: LLC members should approve a resolution to dissolve the company and articles of dissolution to document the corporate authority for the dissolution.  These are normally drafted by your Business Lawyer. A meeting should be held for a vote or it can sometimes be done by unanimous consent.

State Action:  CT requires the filing of a Certificate of Dissolution with the State, which can be done online at http://portal.ct.gov/-/media/sots/CommercialRecording/AllForms/llc-2017/certificate_of_dissolution.pdf?la=en.  In addition, the LLC should withdraw from any other states in which it was authorized to do business.

Permits and Licenses:   All licenses and permits held by the business should be terminated.

Assets and Creditors:  In the big picture, the creditors should be paid and then the assets should be distributed.  Or the creditors should be noticed and then not paid, avoiding liability.

Giving notice to creditors and other claimants of your LLC’s dissolution is optional. However, doing so will help limit your liability and allow you to more safely make final distributions to members.  There are separate notices and ways to notify known and unknown creditors.

There are various actions required to notify creditors prior to distributing the assets.  Notification procedures are detailed in CGS 34-267a. These may get tricky and require a lot of specific steps and you may want to get your Business Lawyer involved to ensure they happen properly.  They require:

• Notifying the known creditors with specific information.\
• Publishing a notice to notify unknown or non-noticed creditors.
• Adopting a deadline for claim filing at least 120 days out.
• The claim should be either be paid or rejected and then the claimant has 90 days to file a lawsuit.

If these procedures are followed, the members will be protected against the LLC claims.  Note that tax liabilities have different rules for discharge and it is particularly important that you pay all outstanding taxes to avoid personal liability.  

Tax Issues:

It is extremely important to pay your tax liabilities because taxes can may not be discharged in a state liquidation.  In addition, some taxes such as payroll taxes and sales taxes have personal liability to the members or people in control of the money.  You may want to consult your Tax Lawyer on these to ensure you don’t have liability.

For federal tax purposes, check the “final return” box on your IRS Form 1065 (if your LLC is classified as a partnership for tax purposes) or IRS Form 1120 (if your LLC is classified as a corporation for tax purposes).

You also must address the state tax obligations.

The basic CT tax steps are on the DRS website

If you have a Sales and Use Tax Permit, you should file a final sale and use tax return (Form OS-114). 

Fill out the back of the Sales and Use Tax Permit (blue card) with your last date of business and enclose it with the final return.

For income tax purposes, file a final Form CT-1120, Connecticut Corporation Business Tax Return. The corporation business tax applies to any year or part of a year when the corporation was in existence or was winding up.  

If you were withholding on employees, you have to close the Withholding Tax account.  File Form CT-941, for the current quarter. You should check the box indicating that the employer no longer has employees and enter the last payroll date on the line provided on Form CT-941.   

An employer must also file Form CT-W3, Connecticut Annual Reconciliation of Withholding, issue Forms W-2 to all employees showing their wages and withholding and submit copies of all Forms W-2 to the Department of Revenue Services.

Contact a Lawyer

Businesses may face many legal issues, employment law issues, contractual issues, intellectual property, business formations, and more. When building your business, Sweeney Legal, PLLC can help you make the necessary legal decisions to set your business up for success. To learn more about our Danbury, Connecticut business lawyer, schedule an appointment today.