Articles of Dissolution for Corporations and LLCs
Presenting the Articles of Dissolution is a pivotal stage in the process of winding down a business for individuals concluding operations within a corporation or LLC.
Why You Need Articles of Dissolution
Filing the Articles of Dissolution is an integral step in the wind-down process for individuals closing a corporation or LLC. Even after ceasing business operations, it is essential to complete the necessary paperwork to officially conclude the business. If you have established a corporation or LLC, possess business licenses, and/or fulfill tax obligations, the state may still perceive you as operational, prompting ongoing fee and tax requests. Managing the paperwork to inform state business resources of your business’s cessation ensures relief from these obligations.
Articles of Dissolution
Paperwork Needed to Close a Business
Even though every business is different, yours will need to handle at least some of these administrative tasks to ensure that you are no longer on the hook for taxes or permit fees.
1. Dissolve Your Business Structure
Incorporating a business or forming an LLC was important when you started a business. Now it’s important to dissolve your business structure in the appropriate way. First, hold a meeting with your business partners or Board of Directors and ask them vote on closing the business. This vote needs to be officially recorded. You’ll then need to file your Articles of Dissolution with your state. This document lets your state know that you are no longer operating as a corporation or LLC.
2. File Your Last Tax Return
You don’t need to wait until tax season to pay your final tax return. When you file, make sure to check the “final return” box when filing your tax forms so the IRS knows you won’t be filing future returns. You also need to report shareholder allocations (and losses) for partners on Schedule K-1. Remember to pay any outstanding taxes, including payroll, sales, and income.
3. Cancel Business Permits and Licenses
Contact each government office where you applied for a business permit and let them know you are no longer operating. Remember: business licenses come from the city, county, and state levels, so don’t miss any of them. Make sure to take care of all this paperwork before the end of the year to avoid penalties and to prevent the IRS or Secretary of State from sending you additional bills.
Closing a Business
Frequently Asked Questions
What happens when a corporation or LLC stops doing business?
Failure to file appropriate documentation may result in taxes, penalties, and other fees for every day the company continues in existence. This applies even if you’ve stopped doing business.
What happens if I don’t legally close my business?
Generally speaking, the reinstatement fees are the only costs that would normally be remitted to the state’s office; however, your specific state may have specific state requirements and reasoning behind why your company fell into bad standing or why it was administratively dissolved.
How do I dissolve a corporation or LLC ?
Dissolving a corporation or LLC (Limited Liability Company) requires a legal filing. The “Articles of Dissolution” or “Certificate of Termination” is generally the document that must be filed with the Office of the Secretary of State within the state where the corporation or LLC company is formed.
What if my company is not in good standing or owes back taxes?
Depending on your company’s state of formation, the state will, in most cases, require the company to return to good standing before they allow the company to be dissolved.
Why Choose CorXec?
- Fast Reliable & Hassle-Free Experience
- Founded by an entrepreneur who pioneered many startups successfully.
- Upfront Pricing, No hidden charges, No Surprises
- Our promise of 100% Satisfaction Guarantee
