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 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 BUSS 2423/June2020 Page 2 of 11 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 partnershin (LP or other tvne of 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 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 BUSS2423Une2020 Page 3 of 11 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 cases 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. 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/ a) Answer the questions below based on the excerpt given. 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) (CLOI: PLOT: C2) b) Provide TWO (2) types of partner's liability that need to be considered before the dissolution of partnership (10 marks) (CLO1: PLOI: C2) Read the ride of were the wings Pestment of GMs by companies in light of Cavid -- Tuesday, 17 Mar 210 1:48 PM MYT Hy Piip ko KUALA LUMPLIR: The iwe of the legal obligate to hold sal general meeting has hemsed in light of concem o Corid 19 and the Goverment directive to Section 10 of the Companies that a copy obliged to beli GM with similya. A Bad of Decemos content marca in accordance with the Company's idosoft The Bundle of the Grena's dictive line me. I can och de best of the the coming of the AGM given the based of peo Covid-19 during the whole No application is reeded for Company of AGM w and expre che GM is dat vond film from dois of the financial and the de la peine de toi Commission Malaysia (SM Alhad company would to code that any dent of AGM which is the Any direct with under the Bridge Philip Kab. Advocate & Soho High Court of BISER Profil --19 Article is available at www.star.com ws/202.0317/ pages-b-companies-in-light-cavid--19 Answer the questions below based on the excerpt given a) Provide TWO (2) duties of directors under the Companies Act 2016 in the issue of conducting the Annual General Meeting of the company during COVID 19. (CLO2.PLO1:04) b) Draft any TWO (2) rules as to meeting in the Article of Association (AOA) of the company by taking into consideration the COVID 19 issue to ensure the rights of the shareholders are protected (CLO2:PLOZC4) member of the company Based on your answer in (b), discuss whether the rules able to protect the rights of the (9 marks) (CLO3:PLO6C3) 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 retums 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) (CLOT: PLOI: C2) b) Provide TWO (2) types of partner's liability that need to be considered before the dissolution of partnership (10 marks) (CLO1: PLOI: C2) 2. Read the article below before answering the following questions. Postponement of AGMs by companies in light of Covid -19 Tuesday, 17 Mar 2020 1:48 PM MYT By Philip TN Koh KUALA LUMPUR: The issue of the legal obligation to hold Annual general meetings has been raised in light of concerns of Covid -19 and the Government directive not to hold gatherings. Section 340 of the Companies Act 201 (CA) provides that a company is statutorily obliged to hold an AGM within six months from its financial year-end. A Board of Directors' resolution may be passed, this can be in the form of circular resolution if in accordance with the Company's articles of association. The Board can take note of the Government's directive as to movements and opening of business premises. It can also consider that it is in the best interest of the company to postpone the convening of the AGM given the hazard of exposure to Covid - 19 during the shareholders meeting. No application is needed for a Company to extend the date of the AGM save and except the re- scheduled AGM is held not beyond fifteen months from date of the financial year-end. If the date is to be extended further an application would have to be made to the Companies Commission Malaysia (SSM). A Bursa-listed company would need to consider that any deferment of AGM which is the major organ of the company for management accountability in govemance have to take into consideration shareholder's investor interests. An appropriate disclosure announcement will be required under the Bursa Listing Rules. Philip Koh, Advocate & Solicitor, High Court of Malaya Article is available at https://www.thestar.com.my/business/business- news/2020/03/17/postponement-of-agms-by-companies-in-light-of-covid--19 Answer the questions below based on the excerpt given. a) Provide TWO (2) duties of directors under the Companies Act 2016 in the issue of conducting the Annual General Meeting of the company during COVID 19. (8 marks) (CL02:PLO1:04) b) Draft any TWO (2) rules as to meeting in the Article of Association (AOA) of the company by taking into consideration the COVID 19 issue to ensure the rights of the shareholders are protected. (8 marks) (CLO2:PLO2:04) c) Based on your answer in (b), discuss whether the rules able to protect the rights of the member of the company. (9 marks) (CLO3:PLO6:03) 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 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 BUSS 2423/June2020 Page 2 of 11 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 partnershin (LP or other tvne of 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 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 BUSS2423Une2020 Page 3 of 11 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 cases 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. 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/ a) Answer the questions below based on the excerpt given. 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) (CLOI: PLOT: C2) b) Provide TWO (2) types of partner's liability that need to be considered before the dissolution of partnership (10 marks) (CLO1: PLOI: C2) Read the ride of were the wings Pestment of GMs by companies in light of Cavid -- Tuesday, 17 Mar 210 1:48 PM MYT Hy Piip ko KUALA LUMPLIR: The iwe of the legal obligate to hold sal general meeting has hemsed in light of concem o Corid 19 and the Goverment directive to Section 10 of the Companies that a copy obliged to beli GM with similya. A Bad of Decemos content marca in accordance with the Company's idosoft The Bundle of the Grena's dictive line me. I can och de best of the the coming of the AGM given the based of peo Covid-19 during the whole No application is reeded for Company of AGM w and expre che GM is dat vond film from dois of the financial and the de la peine de toi Commission Malaysia (SM Alhad company would to code that any dent of AGM which is the Any direct with under the Bridge Philip Kab. Advocate & Soho High Court of BISER Profil --19 Article is available at www.star.com ws/202.0317/ pages-b-companies-in-light-cavid--19 Answer the questions below based on the excerpt given a) Provide TWO (2) duties of directors under the Companies Act 2016 in the issue of conducting the Annual General Meeting of the company during COVID 19. (CLO2.PLO1:04) b) Draft any TWO (2) rules as to meeting in the Article of Association (AOA) of the company by taking into consideration the COVID 19 issue to ensure the rights of the shareholders are protected (CLO2:PLOZC4) member of the company Based on your answer in (b), discuss whether the rules able to protect the rights of the (9 marks) (CLO3:PLO6C3) 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 retums 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) (CLOT: PLOI: C2) b) Provide TWO (2) types of partner's liability that need to be considered before the dissolution of partnership (10 marks) (CLO1: PLOI: C2) 2. Read the article below before answering the following questions. Postponement of AGMs by companies in light of Covid -19 Tuesday, 17 Mar 2020 1:48 PM MYT By Philip TN Koh KUALA LUMPUR: The issue of the legal obligation to hold Annual general meetings has been raised in light of concerns of Covid -19 and the Government directive not to hold gatherings. Section 340 of the Companies Act 201 (CA) provides that a company is statutorily obliged to hold an AGM within six months from its financial year-end. A Board of Directors' resolution may be passed, this can be in the form of circular resolution if in accordance with the Company's articles of association. The Board can take note of the Government's directive as to movements and opening of business premises. It can also consider that it is in the best interest of the company to postpone the convening of the AGM given the hazard of exposure to Covid - 19 during the shareholders meeting. No application is needed for a Company to extend the date of the AGM save and except the re- scheduled AGM is held not beyond fifteen months from date of the financial year-end. If the date is to be extended further an application would have to be made to the Companies Commission Malaysia (SSM). A Bursa-listed company would need to consider that any deferment of AGM which is the major organ of the company for management accountability in govemance have to take into consideration shareholder's investor interests. An appropriate disclosure announcement will be required under the Bursa Listing Rules. Philip Koh, Advocate & Solicitor, High Court of Malaya Article is available at https://www.thestar.com.my/business/business- news/2020/03/17/postponement-of-agms-by-companies-in-light-of-covid--19 Answer the questions below based on the excerpt given. a) Provide TWO (2) duties of directors under the Companies Act 2016 in the issue of conducting the Annual General Meeting of the company during COVID 19. (8 marks) (CL02:PLO1:04) b) Draft any TWO (2) rules as to meeting in the Article of Association (AOA) of the company by taking into consideration the COVID 19 issue to ensure the rights of the shareholders are protected. (8 marks) (CLO2:PLO2:04) c) Based on your answer in (b), discuss whether the rules able to protect the rights of the member of the company. (9 marks) (CLO3:PLO6:03)