The owners or directors of a corporation may choose to carry on under a new name even if it has unpaid debts or commitments. Some jurisdictions consider this to be “phoenixing” and consider it unlawful. It entails transferring the former company’s assets and business operations to a new corporation, which then carries on with a different name. This is frequently regarded as dishonest behavior because it is done to avoid paying unpaid taxes or debts.
You are still liable for paying your debts even if the business you owe money to fails. However, you can have trouble getting any money that is owed to you if the firm is dissolved. You might be able to file a claim against the company’s assets in some circumstances, but it would likely be a difficult and drawn-out process. If a defunct business owes you money, it is advisable to get legal counsel.
A company’s bank account is often closed when it dissolves. Any money that are still available in the account are utilized to settle any outstanding obligations and debts. If any money is left over, it will be divided among the owners or shareholders of the business. Before the bank account is closed, be sure that all unpaid obligations are settled because failing to do so could lead to legal action.
The gains that a business has accumulated over time are known as retained earnings. Any remaining profits are given to the owners or shareholders of the company after it closes. Typically, this is done in accordance with their ownership position in the business. Before distributing any retained revenues, any outstanding debts or obligations of the corporation must be settled.
In summary, a dissolved firm is unable to function or carry on business in any capacity. It is yet conceivable for the owners or directors to carry on doing business under a different name for the corporation, however this is frequently regarded as fraudulent behavior. You are still obligated to pay your debts if you owe money to a business that has been dissolved. A company’s bank account is closed when it dissolves, and any money that is left behind is applied to existing debts. After all outstanding debts have been settled, retained earnings are dispersed to the company’s owners or shareholders.