1. Read the article below and answer the following questions. What to Consider When Going Through The Dissolution of a Business Due to COVID- 19 Posted on August 13, 2020 The ongoing COVID-19 pandemic has taken a major toll on businesses throughout the nation. While some have been able to transition to working entirely or partially remotely, others have had to make difficult decisions to keep their doors open without having to dissolve a business. The dissolution of a business is a decision that should be taken with great care, especially during these unprecedented times. Knowing what to consider and the various steps to take with COVID-19 in mind can help to ease pressure on Houston business owners. The Dissolution of a Business in the Age of COVID-19 The dissolution of or dissolving a company refers to the official or formal closure of a business. While generally ceasing operations is a big part of this process, there are many things to consider beyond locking up for good. Everything from assets and previous obligations to liabilities and more will all need to be dealt with diligently and with care. Making the decision to go through the dissolution of a business is not easy, especially during the current pandemic. While several programs have offered financial assistance to small businesses, unfortunately these options don't work for every operation. Though there are many things to keep in mind when undertaking the dissolution of a business, some of the most pertinent things to consider during COVID-19 include: Deciding How to Wind Down Operations If a business is comprised of partners, members, or shareholders, it's important for everyone to agree on the dissolution plan. These people are integral to overall business operations and may have varying opinions on the best ways to move forward. Including all the necessary parties and following the articles of organization while also documenting the process can make for a more seamless transition and help to avoid potential liabilities. Filing Necessary Dissolution Documents All dissolution documents and any final tax returns must be filed promptly, as the failure to legally dissolve a limited liability company (LLC), limited partnership (LP), or other type of corporation can expose the business to ongoing filing requirements and taxes. If the final year's tax returns are not filed properly, it can result in significant penalties and delay tax write-offs. Any cancellation of registrations, permits, licenses, and/or business names should be made during this time as well. Filing Payroll Taxes When closing out a business, it's important to complete all final employment tax forms. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) added complexity to this process because it allowed employers to defer their share of social security taxes from March 27 to December 31 of this year. Fifty percent of the difference must be deposited by the end of 2021, with the remainder due by the end of 2022. Businesses winding down prior to these dates can likely accelerate deposits; however, there isn't specific guidance on this process due to the recentness of the pandemic. It's important to note that the liability for any failure to remit employment taxes doesn't end with the dissolution of a business. Directors and officers could potentially be held liable for unpaid taxes even after a business dissolves. Looking Into Paycheck Protection Program Forgiveness The Paycheck Protection Plan (PPP) was implemented as part of the CARES Act in late March of this year. The program was designed to provide nonrecourse forgivable loans whose proceeds can be used to cover payroll costs, rent and mortgage interest, utilities, and other eligible business expenses if the operation was able to retain its employees at set salary levels. When a business is being dissolved, however, the entire loan - or at least the portion spent on qualified expenses - may be forgiven if the company completes the forgiveness application and submits any required documentation. Winding down a business before receiving the notice of PPP loan forgiveness from your lender could make the company liable to repay it. Because guidance from the Small Business Administration (SBA) continues to evolve during this time, it's important to consult an accountant. Resolving Outstanding Financial Obligations One of the most important things for business owners to consider is whether they have outstanding financial obligations that need to be resolved before the business ceases operation. This can include renting office space where the business owner holds the title or any personal assets used as collateral for business debts. Proactively communicating with vendors, lenders, and suppliers can help business owners determine what to pay off when and the available options for doing so. Maintaining Records During the entire dissolution process, it's important for business owners to keep detailed records of the proceedings in a safe place. Standard dissolution guidelines typically require these records to be kept for up to seven years in the event future litigation arises. Posted in Commercial Litigation Tagged Dissolution of Business Article is available at https://feldman.lawews/what-to-consider-when-going-through-the- dissolution-of-a-business-due-to-covid-19/ Answer the questions below based on the excerpt given. a) Briefly explain THREE (3) methods for dissolution of partnership provided under Partnership Act 1961 by taking into consideration the effects of Covid 19 to the business of partnership. (15 marks) (CLO1: PLO1: C2) b) Provide TWO (2) types of partner's liability that need to be considered before the dissolution of partnership. (10 marks) (CLO1: PLO1: C2) 1. Read the article below and answer the following questions. What to Consider When Going Through The Dissolution of a Business Due to COVID- 19 Posted on August 13, 2020 The ongoing COVID-19 pandemic has taken a major toll on businesses throughout the nation. While some have been able to transition to working entirely or partially remotely, others have had to make difficult decisions to keep their doors open without having to dissolve a business. The dissolution of a business is a decision that should be taken with great care, especially during these unprecedented times. Knowing what to consider and the various steps to take with COVID-19 in mind can help to ease pressure on Houston business owners. The Dissolution of a Business in the Age of COVID-19 The dissolution of or dissolving a company refers to the official or formal closure of a business. While generally ceasing operations is a big part of this process, there are many things to consider beyond locking up for good. Everything from assets and previous obligations to liabilities and more will all need to be dealt with diligently and with care. Making the decision to go through the dissolution of a business is not easy, especially during the current pandemic. While several programs have offered financial assistance to small businesses, unfortunately these options don't work for every operation. Though there are many things to keep in mind when undertaking the dissolution of a business, some of the most pertinent things to consider during COVID-19 include: Deciding How to Wind Down Operations If a business is comprised of partners, members, or shareholders, it's important for everyone to agree on the dissolution plan. These people are integral to overall business operations and may have varying opinions on the best ways to move forward. Including all the necessary parties and following the articles of organization while also documenting the process can make for a more seamless transition and help to avoid potential liabilities. Filing Necessary Dissolution Documents All dissolution documents and any final tax returns must be filed promptly, as the failure to legally dissolve a limited liability company (LLC), limited partnership (LP), or other type of corporation can expose the business to ongoing filing requirements and taxes. If the final year's tax returns are not filed properly, it can result in significant penalties and delay tax write-offs. Any cancellation of registrations, permits, licenses, and/or business names should be made during this time as well. Filing Payroll Taxes When closing out a business, it's important to complete all final employment tax forms. The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) added complexity to this process because it allowed employers to defer their share of social security taxes from March 27 to December 31 of this year. Fifty percent of the difference must be deposited by the end of 2021, with the remainder due by the end of 2022. Businesses winding down prior to these dates can likely accelerate deposits; however, there isn't specific guidance on this process due to the recentness of the pandemic. It's important to note that the liability for any failure to remit employment taxes doesn't end with the dissolution of a business. Directors and officers could potentially be held liable for unpaid taxes even after a business dissolves. Looking Into Paycheck Protection Program Forgiveness The Paycheck Protection Plan (PPP) was implemented as part of the CARES Act in late March of this year. The program was designed to provide nonrecourse forgivable loans whose proceeds can be used to cover payroll costs, rent and mortgage interest, utilities, and other eligible business expenses if the operation was able to retain its employees at set salary levels. When a business is being dissolved, however, the entire loan - or at least the portion spent on qualified expenses - may be forgiven if the company completes the forgiveness application and submits any required documentation. Winding down a business before receiving the notice of PPP loan forgiveness from your lender could make the company liable to repay it. Because guidance from the Small Business Administration (SBA) continues to evolve during this time, it's important to consult an accountant. Resolving Outstanding Financial Obligations One of the most important things for business owners to consider is whether they have outstanding financial obligations that need to be resolved before the business ceases operation. This can include renting office space where the business owner holds the title or any personal assets used as collateral for business debts. Proactively communicating with vendors, lenders, and suppliers can help business owners determine what to pay off when and the available options for doing so. Maintaining Records During the entire dissolution process, it's important for business owners to keep detailed records of the proceedings in a safe place. Standard dissolution guidelines typically require these records to be kept for up to seven years in the event future litigation arises. Posted in Commercial Litigation Tagged Dissolution of Business Article is available at https://feldman.lawews/what-to-consider-when-going-through-the- dissolution-of-a-business-due-to-covid-19/ Answer the questions below based on the excerpt given. a) Briefly explain THREE (3) methods for dissolution of partnership provided under Partnership Act 1961 by taking into consideration the effects of Covid 19 to the business of partnership. (15 marks) (CLO1: PLO1: C2) b) Provide TWO (2) types of partner's liability that need to be considered before the dissolution of partnership. (10 marks) (CLO1: PLO1: C2)