How to Dissolve a Corporation

By Michael Banner - Jul 19, 2012     

To dissolve a corporation is to put an end to the corporation's existence and can be done either voluntarily or involuntarily. 
 

Voluntary Dissolution

To voluntarily dissolve your corporation, you must file articles of dissolution with the same state agency which formed your corporation in the first place.

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Most state agencies will require that all state taxes & fees are paid and up to date before the state will allow dissolution to be filed.

Involuntary Dissolution

In many states, simply doing nothing will cause the state to involuntarily dissolve the corporation for not keeping up with the state's annual filing requirements.  If you choose to not keep up with the state's filing requirements, it is called abandonment, because you are abandoning the charter and allowing the state to cancel or dissolve the charter.

NOTE:  There may be negative tax consequenses by abandoning an entity which has had operations.  Consult your tax or legal advisor to see if this applies to your situation.
 

Withdrawl in Foreign States

If your corporation is formed in one state (formation state) but also registered for foreign authority in another state, and your corporation dissolves in the formation state, it must also withdrawl its foreign authority in the other state(s).  This is a similar proceedure of filing withdrawl paperwork in the foreign state, along with a fee, and making sure state taxes are up to date.
 

Each State Different

Because each state's requirements are different, you should investigate your formation state's requirements for dissolution before making a descision. You can start the research process by going to State Research (from the SmallBiZ.com Home page) to find your state's website location for more details.

Other Related Links

·  Your State's Requirements 

·  Amend your articles

·  What is Foreign Authority? 

·  A Comparison of Business Entities

·  What is an S Corporation

 

About Michael Banner
  CEO & Founder of SmallBiZ.com, created over seventeen years ago to help small business owners simplify the process of starting & managing their small businesses. SmallBiZ.com now serves over 10,000 businesses per year with various filing and subscription services; in addition to the 1000's of daily visitors to www.smallbiz.com, accessing free services, help pages, & educational videos & webinars.


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