A New Jersey municipality encountered legal issues with its parking system business when six agency personnel were arrested for allegedly stealing money from the collections boxes of parking meters and for buying personal belongings with city debit cards. Some of the workers plead guilty to the charges and must pay restitution to the municipality.
Because of these and other issues the city had with the parking system business, the city ultimately dissolved the organization. Business dissolution or succession is the action of halting operations, closing down a group or continuing operations and selling or transferring the company as a whole. This New Jersey municipality elected to close down operations of the parking system business to make way for a new system of running the parking operations in the city: a parking utility.
New Jersey Business Dissolution Law
When a company in New Jersey elects to dissolve itself, there are certain legal steps that must be taken. When all the final books are organized, the group must be in good standing with the Secretary of State, the New Jersey Division of Taxation, county agencies, other state agencies and the federal agencies to which it reports.
When companies in New Jersey dissolve, the technical terminology for corporations is dissolution. The technical terminology for limited liability corporations, limited partnerships and limited liability partnerships is cancellation. The dissolution or cancellation process can take several months in New Jersey. Some of the legal requirements for dissolution or cancellation include:
- A tax clearance must be submitted to the Division of Revenue
- Documents for dissolution must be submitted to the Division of Revenue
- A tax clearance certificate needs to be achieved for those corporations with assets
- Any appropriate payment must be made to the Division of Revenue
When one or more individuals reach an agreement with one of the principals of an organization to take over finances, profits and operations of the business, the process is called a corporate buy-out. Typically this involves one owner or partner buying out another owner or partner. Proper documentation should be drawn for such buy outs, especially when the business has sizable assets or profits.
A qualified New Jersey business succession attorney can assist with such a transfer. An experienced succession attorney knows what clauses should be listed in such an agreement to make sure both sides are protected and that the succession happens exactly as verbally outlined. Many times two partners have a verbal agreement but are not able to properly put the contract in writing. A qualified business lawyer can solve this issue.