ANSWERS: 1
  • Dissolving your corporation is a difficult event regardless of reason, but whether it voluntary or involuntary, a sudden action or a long time coming, informing and discussing the dissolution with your employees is paramount. It's important that they know as soon as possible, and it's also important that you let them know what their options are as well.

    Preparation

    Preparation before informing your employees is a large step in making the dissolution as pain-free as possible for them. Discuss your obligations to the employees with your legal representatives. These obligations may vary by state and include everything from severance pay rules, if severance is given to dealing with retirement accounts and employee health care. Once informed, your employees will have many questions about their options and you should have the answers available beforehand.

    Support Personnel

    Bring along support personnel when you inform the employees. You should have someone available who can sit individually with each employee and discuss their financial situation, including last work days, severance packages, insurance plans and the like. If you have an existing human resources department they should be able to provide you with the support personnel you require. Call in the union representatives if some of your employees are unionized. Include security personnel when informing the employees, unobtrusively. Any job change is an emotional time, especially losing one, and some employees may react badly. You should provide security just in case, for everyone's protection.

    Presentation

    Inform all of your employees at one. For small companies this is best done with a company-wide meeting. Use the management chain set into place for large companies, preparing a general informational release, and informing managers of the details for employees throughout the company. Provide your employees with as much information as possible and keep the lines of communications open. Remain available for unique situations, there will be plenty of questions asked once the employees have been informed, and this is where your support personnel come in handy, but there are always specifics that the support personnel cannot attend to.

    After Effects

    Keep communications running even after the doors of the corporation are shut. Many states require that you keep certain information available for specified amounts of time. There are companies set-up to handle such matters after the dissolution of your company. Check your state regulations to ensure you are compliant with all laws concerning the dissolution of your corporation.

    Source:

    All Business: How to Dissolve a Corporation

    Findlaw: A Chronology: A Road Map to Closing Down Your Business

    More Information:

    Internal Revenue Service: Closing a Business Checklist

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