Shutting Down

How Long Does It Take to Shut Down a Company?

Ash Steward

09 Sep 2025 • 6 min read

Starting a company often feels like a sprint — filing trademarks, getting licenses, launching that first product. Those steps usually take weeks, not months. But when it’s time to close the doors, the process is slower, heavier, and rarely comes with the same excitement.

So, how long does it really take to shut down a business? And what are the signs that it might be time to do so? In this post, we’ll walk you through what to expect — from compliance requirements to state-by-state variations — so you can move forward with clarity.

Key Takeaways

The timeline to dissolve your company depends on its size and complexity.
Legal obligations, taxes, debt settlement, and new federal reporting rules can extend the process.
Signs it may be time to wind down include ongoing financial strain, tough market shifts, and mounting compliance burdens.

How Long Does It Take To Dissolve a Company?

On average, dissolution takes anywhere from months to years, depending on your company’s structure and the regulatory filings required..

The Corporate Transparency Act (CTA) took effect January 1, 2024. Reporting companies formed in 2024 had 90 days to file their initial Beneficial Ownership Information (BOI) report. Starting Jan 1, 2025, new entities must file within 30 days of formation. Importantly, if your company existed anytime after Jan 1, 2024 — even if you dissolved before your BOI deadline — you still must file.

The following are rough averages for how long it takes to shut down different types of companies via traditional dissolution methods:

Sole proprietorships: 1–6 months
The simplest to dissolve. Expect to settle debts, file final taxes, and handle IRS paperwork.
Partnerships: 3–8 months
Partnerships are governed by your partnership agreement. If no agreement exists, state default laws apply. Disputes among founders may extend this timeline.
LLCs: 6 months–1 year or more
Requires following your operating agreement, filing a Certificate of Dissolution, and meeting compliance steps like BOI reporting.
Corporations: 6 months–1 year or more
These are the most complex scenarios. S and C Corporations take the longest to dissolve, requiring shareholder and board approval, multiple state filings, final federal and state tax obligations, and, as of 2025, mandatory BOI reporting.

New compliance requirements like FinCEN BOI filings may extend the checklist, even after traditional dissolution steps are completed.

💡

Shutting down a company isn’t just about paperwork and deadlines — it’s about peace of mind. At Starcycle, we guide you through every step of the process so nothing slips through the cracks. From compliance filings to final tax obligations, we simplify the complex and carry the weight for you. That way, you’re not just saving time — you’re gaining the clarity and confidence to focus on what’s next.

Why Does the Shutdown Take So Long?

A typical company shutdown takes time because of the legal, financial, and administrative obligations involved. Even once you’ve decided to close, the government continues to recognize your business as a legal entity until the proper filings are made and final steps are completed. This means you must go through a formal wind-up process to bring everything to a close.

1. Following the Law

Every shutdown involves settling debts, filing dissolution paperwork, and now complying with the CTA’s BOI reporting. The CTA requires most businesses to file a Beneficial Ownership Information (BOI) report with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN). Even if you close quickly, skipping compliance isn’t an option — the BOI filing is still required. In other words, closing quickly does not exempt you from federal compliance.

2. Adhering to State-Specific Regulations

The process also varies by state, which can add time and complexity.

For example:

Delaware: A corporation may take up to 3 years to fully complete the wind-up period. Dissolved corporations remain liable for lawsuits for up to three years post-dissolution.
Florida: Filing Articles of Dissolution costs $35; processing typically completes in 2–3 business days.
Texas: Dissolution requires a more layered process that includes filing a Certificate of Termination, a Certificate of Account Status from the Comptroller, member or board approval, and notifying creditors. Fees generally hover around $40.
Wyoming: Filing Articles of Dissolution costs ~$60, with processing up to 15 business days from receipt. (Mail-in only for these forms.) Administrative dissolution may happen automatically if annual reports aren't filed.

These variations illustrate the importance of knowing your specific state process to optimize timeline and compliance.

3. Settling Debts & Taxes

Another time-consuming step is addressing outstanding financial obligations. Businesses must work with creditors to settle any remaining debts and, if necessary, liquidate assets to cover liabilities. Final tax obligations must also be met, including filing federal and state returns, paying any outstanding taxes, closing the company’s EIN, and checking the “final return” box on the appropriate IRS forms. While the IRS process hasn’t changed in recent years, it remains a non-negotiable part of winding down.

4. Distributing or Selling Assets

Finally, distributing assets adds to the timeline. For partnerships, LLCs, and corporations, this process is governed by the company’s founding agreements or, if none exist, by state default rules. In some cases, assets must be liquidated before distribution, which can prolong the process. Disputes between owners or bankruptcy proceedings can make this stage even more complex and time-intensive.

When Should a Company Shut Down?

Knowing when to close a business is one of the hardest calls a founder will ever make. Start by looking at your financial health: if losses keep piling up with no real path to recovery, that’s a signal worth paying attention to. Then, consider your market: if competitors are surging ahead while you’re struggling to keep pace, it may be a sign the landscape has shifted. Finally, weigh the regulatory burden: new compliance requirements—like BOI filings—can make operations more costly and complex than they’re worth.

If these realities all point in the same direction, it may be time to begin planning for dissolution—not as an ending, but as the start of your next chapter.

Conclusion

A long and drawn-out company shutdown can be a constant reminder that things didn’t go as planned. But failing to close properly can lead to legal, financial, and reputational consequences.

With new federal BOI reporting requirements and state-by-state differences, dissolving a company requires more attention to detail than ever before. While a traditional wind-down may take months—or even years—Starcycle helps cut through the complexity, shortening the process and easing the stress that comes with it.

By partnering with us, you can move forward knowing every detail has been handled and focus on the chapter ahead with confidence. Starcycle offers tailored shutdown plans starting at $299. Get started today.

FAQ

How Long Does It Take To Close a Business Bank Account?

Closing a business bank account can take a few days to a couple of weeks. The exact time it will take depends on the type of account, your bank’s account closure protocols, any pending transactions, required paperwork, and the bank’s current workload.

Important Note: Consider closing your business bank account as one of the final steps in the process of shutting down your business. Keeping it open ensures you can still settle outstanding payments and collect any final revenue, making for a smoother financial transition.

How Do You Check if a Company Is Dissolved?

To verify whether a company no longer exists, start by identifying the state in which it was registered. Then, visit that state’s official business entity database (usually hosted by the Secretary of State). You can search by company name or registration number to confirm whether the entity is active, inactive, or dissolved.

Do I Need to File a BOI Report with FinCEN if My Business Is Closing?

Yes. Under the Corporate Transparency Act (CTA), most companies are required to file a Beneficial Ownership Information (BOI) report with the U.S. Treasury’s Financial Crimes Enforcement Network (FinCEN). This requirement applies even if your company is dissolving. If your company was created in 2025 or later, you must file the BOI report within 30 days of formation, regardless of whether you plan to shut down shortly after. Once the initial BOI report is filed, no additional BOI filings are required upon dissolution. If your company was fully dissolved before Jan 1, 2024, no BOI filing is required.

What Happens If I Don’t Formally Dissolve My Business?

Failing to formally dissolve your business can result in ongoing liabilities, annual report fees, tax obligations, and even penalties. For example, some states automatically impose late fees or administratively dissolve companies that fail to file annual reports—but even administrative dissolution doesn’t necessarily eliminate tax or legal obligations. To avoid complications, it’s always best to file official Articles of Dissolution (or the state equivalent) and complete all necessary federal and state tax filings.

Starcycle provides operational support for shutdowns. We’re not a substitute for legal or financial advice; if your case requires specialized counsel (e.g., complex debt, litigation, or tax positions), we’ll help you integrate the right professionals.