Shutting down a company is hard. It takes time, care, and a clear head at a moment when you may not have much of either. Many founders assume their law firm will “take care of everything.” Legal counsel is vital - no question - but most firms focus on a narrow slice of the shutdown. They typically advise on legal structure and risk. Generally, they do not manage the long list of operational, tax, and account‑level tasks that must happen for a clean close.
If you are a founder or partner at a small or mid‑sized software business in the U.S., you have likely built systems, vendors, and accounts over years. You may also have investors, SAFEs or notes, and team members spread across states. When you decide to wind down, you face two tracks of work. One track is legal. The other is everything else.
Lawyers are essential on the legal track. They help you make sound decisions, protect the board, and prepare filings. But the second track - operational closure - is where many dissolutions stall. That is where missed steps turn into surprise tax notices, vendor fees, or ongoing liabilities after you thought the company was done.
The goal here is simple. Know what your firm likely handles. See what often gets missed. Then decide how you want to close the gap so you can finish the process with confidence and a full paper trail.
This post explains where law firms shine, where important work often gets missed, and how SimpleClosure coordinates the full process so nothing slips through the cracks. If you want to skip ahead and get tailored help, you can start here.
What Law Firms Typically Handle During Dissolution
Most corporate law firms support the core legal mechanics of shutting down. Expect help on a few predictable items.
They draft or review the board and stockholder approvals to shut down the company. This confirms that directors and owners have authorized the decision. It also sets the framework for how remaining assets, if any, will be distributed after debts and taxes.
They may prepare and file the certificate of dissolution in Delaware or in your home state. If you are a Delaware corporation, that means submitting the form that formally ends the company’s existence at the state of incorporation. If you are an LLC, the filing name differs, but the purpose is the same: formal termination.
They review contracts, liabilities, and employment issues. A good firm will surface things like lease obligations, IP assignments, or severance and release language. They will warn you about risks and outline options.
Law firms advise on compliance and risk mitigation. This may include guidance on creditor notices, fiduciary duties, and how to reduce the chance of claims after the shutdown.
This support matters. It protects you and your board. It sets the legal frame for the end of the entity. But by design, it stops short of execution. Law firms do not usually log into your payroll provider, cancel your SaaS stack, or chase down state tax clearances. That is not a knock - it is a scope choice. Someone still needs to finish the hands‑on work.
What Often Gets Missed (and Why It Matters): 10 Highlights
The tasks below are not legal opinions. They are practical, multi‑step chores that involve state agencies, the IRS, payroll systems, banks, credit cards, and cloud services. Each one is small on its own. Together, they decide whether your shutdown is complete or whether the company lingers as a set of open accounts and unresolved obligations.
1. Franchise tax clearance and state withdrawals. If you registered to do business in several states, each state expects you to withdraw or terminate there as well. Some require franchise tax clearance or final returns before they let you go. Skipping this step can lead to late fees, penalty notices, or an entity that keeps “living” on paper with annual bills arriving long after you thought you were done.
2. IRS final returns, EIN account closure, and 1099 compliance. Closing is not only a state filing. You still need final federal returns and, where needed, short‑year filings. You may also need to close the IRS business account associated with your EIN. If you paid contractors, you have 1099 responsibilities even in your final year. Missed returns and forms are the fastest path to letters you do not want.
3. Payroll tax deregistration and final withholdings. Payroll providers do not guess when you are closing. Companies are generally required to process final wages, accrue and remit final withholdings, and then formally terminate payroll tax accounts in each state (and sometimes city). If you leave accounts open, automated systems assume you owe ongoing filings. The result is a steady drip of penalty notices for periods when you had no payroll at all.
4. Vendor and software account cancellations. Cloud tools are easy to spin up and easy to forget. Every unused seat, annual contract, or auto‑renew plan is money out the door. Beyond cost, lingering accounts can keep your company data active in places you did not intend. A thorough shutdown includes inventorying the stack, canceling or transferring what matters, and confirming that data retention or deletion settings reflect your plan.
5. Cloud storage, email, and digital asset winddown. This is where a future audit trail lives. Decide what you keep, for how long, and who will have access. Archive email, code repositories, and key documents. Set up a clear owner for retained accounts. Then disable or delete the rest. Think ahead to what a regulator, tax auditor, or investor might ask for in two years. Your future self will thank you.
6. Cap table cleanup, investor notifications, and final SAFE or note tracking. Venture‑backed shutdowns have extra steps. You may need to confirm final capitalization, track pro rata distributions if any funds remain, and document communications to shareholders. SAFEs and convertible notes often need to be accounted for in the final package even if they are never converted. Putting this in order now avoids confusion later.
7. Creditor outreach and settlement coordination. Your dissolution plan should include a process to identify creditors, notify them, and address valid claims. That means gathering vendor statements, checking final invoices, and confirming zero balances. Settlements, if needed, deserve receipts and written releases. This step reduces the chance of surprise collections down the line.
8. Final business license cancellations across jurisdictions. Local licenses - city, county, or special permits - do not vanish when you file at the state. Many require a short form to cancel. Some tie to tax accounts that also need to be closed. It is tedious but necessary, especially for multi‑state companies that operated even briefly in several places.
9. Closing down Stripe, Gusto, Brex, Mercury, and other fintech tools. Banking and payments platforms each have their own closure process. You will want to transfer or return funds, export statements, confirm tax forms, and then close accounts. Leaving a high‑leverage account open is one of the most common sources of “weird fees” after a shutdown.
10. Organized record retention and audit‑ready documentation. When the dust settles, you want one organized package that explains what you did, when, and why. That includes approvals, filings, tax returns, confirmations from states, final payroll reports, investor notices, vendor releases, and closing bank statements. Without this, future diligence or audits turn into long, distracting hunts through old inboxes.
And many more. Why do these items get missed? Because they live in many places, across many systems, on many timelines. No single vendor owns them. They take dozens of logins and follow‑ups. They require someone to keep a checklist, track dependencies, and nudge third parties until the loop is closed. That is project management, not legal advice. And if you are also job hunting, supporting a team, or decompressing after a hard decision, it is understandable that you would want help.
How SimpleClosure Complements Your Legal Team
SimpleClosure is not a law firm. We work alongside your counsel and your financial professionals to coordinate the entire shutdown, end‑to‑end. Think of us as the operational counterpart to your attorney’s legal guidance.
Our team and software cover more than 95 discrete steps that a typical venture‑backed startup needs to finish a proper wind‑down. The exact plan depends on your footprint, but the approach is consistent: map the work, confirm the order of operations, and close each loop with written proof.
We start with a short intake to understand your entity type, states of registration, payroll footprint, cap table, and stack. From there, we build a clear, dated plan. You see what we will do, what we need from you, and what your counsel will handle. We assign a single point of contact so you do not have to manage ten different threads.
On state compliance, we prepare and coordinate withdrawals and terminations in each state where you are registered to do business. Where needed, we help obtain tax clearances and confirm that the state recognizes the closure. We do not stop at “filed.” We track through to “accepted” and “account closed” so you are not paying annual fees for a company that no longer exists.
On federal and state tax, we work with your tax preparer to make sure final returns are filed and acknowledged. We help you close the IRS business account for your EIN once filings are complete. If you do not have a tax preparer, we can loop in trusted partners. Our goal is simple: no loose ends and no open accounts that create auto‑generated penalties in the months after you close.
On payroll, we coordinate final pay runs, accrued PTO payouts where applicable, and final withholdings. Then we help you terminate payroll tax accounts in each state and locality. We obtain confirmations that the accounts are closed so you do not get pulled back in for “missing” a period when you had no employees.
On vendors and SaaS, we inventory your tools, cancel or transfer as needed, and collect confirmations. We also align data retention and deletion to your plan. That way, your company stops paying for unused tools, and your sensitive data does not float around in active services you no longer monitor.
On digital assets, we design a thoughtful archive. We help you preserve what matters - board minutes, major contracts, IP assignments, cap table records, financial statements, and tax filings - and we structure access so it is easy to produce if asked. Then we help you shut down or transfer domains, email, repositories, and cloud storage.
On investor and creditor communications, we draft clear, factual updates that match your legal plan. We track responses, log acknowledgments, and store copies so you have a clean record. If there are funds to return after debts and taxes, we coordinate distributions in line with the waterfall your counsel approves.
On banking and fintech platforms like Stripe, Gusto, Brex, and Mercury, we follow each platform’s process. We export statements and tax forms, reconcile final balances, return or transfer remaining funds, and close accounts with written confirmation. If a charge appears later, we have the paper trail to dispute it.
Throughout, you have a single dashboard that shows progress, owners, and dates. You do not need to chase five agencies or remember which state asked for which form. We keep the audit trail as we go, so at the end you receive a comprehensive closure package. If anyone asks a question in the future - a landlord, a state, a potential employer, or an investor - you have the answer at hand.
Your attorney remains central. We rely on their advice, align our work to the legal plan, and keep them informed so there are no surprises. Many firms like partnering with us because it lets them focus on legal judgment while we execute the operational lift that their model is not designed to handle.
Closing Thoughts
Legal support is essential to a proper dissolution. If your law firm is preparing your board approval and filing your certificate of dissolution, that is a great start. But for most companies, that is only a portion of the journey. The rest is the unglamorous, crucial work of closing registrations, finishing payroll, settling accounts, shutting down tools, and organizing records so you can move on without fear of loose ends.
If you are feeling overwhelmed, you are not alone. Founders close companies for many reasons - market shifts, capital constraints, or a personal decision to reset. None of that should lead to ongoing notices, fees, or anxiety about what might come back later. With the right plan and the right partner, you can finish well, take care of stakeholders, and protect your future.
SimpleClosure is here to coordinate the full shutdown and work hand‑in‑hand with your legal and financial teams. We handle the details, keep you informed, and deliver an audit‑ready record of every step. When you are ready, we will help you close cleanly and with confidence.