5 Costly Mistakes to Avoid When Closing Your Business | Houston Business Dissolution Attorney Explains

Closing a business is never easy—especially when it’s one you’ve poured your heart into. For Houston entrepreneurs in Upper Kirby, Montrose, and River Oaks, the emotional and legal complexities of business dissolution can feel overwhelming. But you don’t have to navigate this alone. At The Spencer Law Firm, located just minutes from the bustling Kirby Drive corridor, we’ve helped countless local business owners dissolve their ventures with clarity, compliance, and compassion. Whether you’re closing a family-owned restaurant in the Heights or unwinding a partnership in Midtown, our team ensures your rights and legacy are protected every step of the way.

Understanding Business Dissolution in Texas

Texas law requires businesses to follow specific dissolution protocols based on their structure (LLC, corporation, partnership, etc.). For example, LLCs must adhere to the Texas Business Organizations Code (BOC) § 11.051, which mandates member approval and formal wind-up procedures. Skipping steps like settling debts, notifying creditors, or filing a Certificate of Termination with the Texas Secretary of State can lead to personal liability or lingering legal obligations.

Why Houston Owners Face Unique Challenges

Local factors, such as Harris County’s strict adherence to community property laws in partnerships or disputes over commercial leases in high-demand areas like Rice Village, often complicate closures. A business dissolution lawyer familiar with Houston’s courts can anticipate these hurdles.

4 Steps to Dissolve Your Business Properly

1. Review Governing Documents: Check your bylaws, operating agreements, or partnership contracts for dissolution clauses.

2. Settle Debts and Distribute Assets: Prioritize creditors, then allocate remaining assets per Texas law and stakeholder agreements.

3. File Formal Paperwork: Submit dissolution documents to the Texas Secretary of State and IRS (if applicable).

4. Notify Stakeholders: Inform employees, clients, and vendors to avoid future disputes.

Pro Tip: Houston’s humid climate can damage physical records. Digitize critical documents early in the business closure process.

Why Partnering with a Business Dissolution Lawyer is Crucial

Attempting a DIY dissolution risks errors like incomplete asset distribution or missed tax filings. For example, Texas imposes franchise tax obligations even during closure—an oversight that led to penalties for a Montrose-based marketing firm in 2024.

At The Spencer Law Firm, we:

• Resolve disputes over intellectual property or contracts.

• Ensure compliance with Harris County court requirements.

• Shield you from personal liability.

Case Study: A Houston Boutique’s Smooth Closure Background

A local women-owned boutique near Upper Kirby faced dissolution after a partner relocated. Disagreements over trademark ownership and lease termination threatened to derail the process.

Our Solution: Our team mediated the partnership split, transferred the trademark per USPTO guidelines, and negotiated an early lease exit with the landlord—saving $15,000 in potential penalties.

Outcome: The boutique closed within 90 days, with both partners parting amicably and preserving their reputations.

Conclusion

Business dissolution isn’t just paperwork—it’s about closing this chapter with dignity and foresight. Whether you’re in the Galleria area or near Buffalo Bayou, The Spencer Law Firm combines Houston-specific expertise with a personalized approach. Ready to move forward? Schedule a consultation today at our Upper Kirby office. Let’s ensure your legacy—and future—remain protected.

Call us at 713-961-7770 or visit our Kirby Drive location to start your dissolution journey.

FAQ's

1. How long does business dissolution take in Texas?

   Typically 60–120 days, depending on debt resolution and court filings. Complex cases may take longer.

2. What happens if I don’t formally dissolve my business?

   You could face ongoing taxes, lawsuits, or personal liability for unresolved debts.

3. Can I dissolve a business if my partner disagrees?

   Yes, but Texas law requires adherence to your operating agreement or court intervention.

4. Are there tax implications for business closure in Houston?

   Yes, including final franchise tax returns and federal obligations.

5. Do I need a lawyer to dissolve an LLC?

   While not legally required, an attorney ensures compliance and minimizes risk.