Dissolving a Corporation

At some point in time, dissolving a corporation may be inevitable. Dissolving a corporation occurs when the owners of a corporation decide that it is time to close down the corporation. We will discuss what are involved in dissolving a corporation. Most people know how to start a corporation but are unsure how to dissolve or shut down a corporation. Dissolving a corporation is not difficult but there are some paperwork to be filled out and filed.

How do I dissolve a corporation?

Dissolving a corporation often involves selling off all the remaining assets of the corporation and distributing cash proceeds to creditors and shareholders. Then to complete dissolving a corporation, a formal dissolution papers are filed with the state which the corporation incorporated in.

Process and procedures in dissolving a corporation

To dissolve a corporation legally, the owners of the corporation must file the articles of dissolution or a certificate of dissolution with the state it incorporated in. Each state has its own procedures and process of dissolving a corporation. You usually have to pay any corporate income taxes owed and not yet paid as well as pay creditors of the corporation. After that, the corporation can distribute all remaining assets to creditors and shareholders.

Publication of a corporate dissolution

When dissolving a corporation, a notice of dissolution is usually published in a legal newspaper. Shareholders and creditors can ask the court to oversee the dissolution process of the corporation.

Income tax after dissolving a corporation

When dissolving a corporation, the corporation must file the final state and federal corporate income tax returns and pay any taxes unpaid. Note that the corporation as well as its shareholders may owe taxes when dissolving a corporation. All unpaid taxes must be settled and paid up.