How to Dissolve an S Corporation:
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Vote to Dissolve the S-Corp
If you solely own an S-Corporation as a sole owner, dissolving it is rather easy. However, if you have more than one shareholder, Articles of Organization may mandate that shareholders hold a meeting and vote to dissolve the S-Corporation.
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Steps to Dissolve an S Corporation
With the exception of certain tax issues, dissolving an S corp is pretty much the same as dissolving any corporation. You must adhere to the laws in your state since state business codes outline the specific procedures that corporate managers must follow to legally dissolve the S corp.
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Closing Steps for an S Corporation
By following specific dissolution processes, you can ensure a smooth and lawful closure of your S Corporation. Take note of the steps and guidelines mentioned below to dissolve your S Corporation successfully.
Tax Consequences of Dissolving an S Corporation:
The tax consequences of liquidating a C corporation holding appreciated assets can be adverse. Make sure you understand the potential tax implications before proceeding with the dissolution of your S Corporation.
Dissolution Approvals and Requirements:
In general, you cannot dissolve an S Corporation without the approval of shareholders or the board of directors. Approval must come from shareholder and director resolutions, which must be recorded in official corporate records. Remember to comply with all necessary dissolution guidelines and state codes for a legal termination of the business and liquid assets.