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Frequently Asked Questions

What should be done with the company property during the winding up phase of a Delaware LLC cancellation?

During the winding up phase of a Delaware LLC cancellation, several key tasks need to be undertaken with regards to the company property. The first step is to close the business's physical locations. This could involve terminating leases, selling owned properties, or otherwise disposing of them. Next, all business with customers and suppliers must be settled. This could involve fulfilling outstanding orders, collecting payments, paying off debts, or canceling contracts. The company property must then be sold or disposed of. This could involve selling physical assets, intellectual property, or other company property. The proceeds from these sales can then be used to discharge or make arrangements for all liabilities, such as loans, taxes, contracts, or lawsuits. Delaware law stipulates that liabilities must be discharged before any members may collect among final assets. This means that any liability claim made against the company must be compensated for, or at least a reasonable provision made. The law also specifies the order in which payments must be made. All creditors and liability holders, including the federal and local governments to whom the LLC may owe tax liability, must be paid first.
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