Steps to Dissolve a Corporation
File dissolution paperwork with the Wisconsin Department of Financial Institutions. Cancel licenses, permits and accounts. To dissolve, file Form 10, Articles of Dissolution with the Department of Financial Institutions.
Focus on procedures to legally dissolve and liquidate assets. Notify all creditors in writing that you are closing. Liquidation involves distributing and selling assets and property.
Corporations must settle any outstanding obligations to the Department of Financial Institutions and Department of Revenue, including any delinquent fees when dissolving. To dissolve an S-Corp, conduct a shareholder vote, cease operations, settle debts and liabilities, liquidate assets, and file Articles of Dissolution.
Steps to terminate a business vary based on its structure. Make sure to comply with state business codes. Obtain a shareholder vote to dissolve. An LLC can choose to be taxed as an S-corp by filing Form 8832 and 2553.
First Steps in Termination
The first step to terminate a corporation is to file a vote for dissolution. Notify creditors, pay debts, distribute assets, and file articles of dissolution.
To change officers of an Illinois corporation, have shareholders pass a resolution and then file an amended Articles of Incorporation.
The board of directors should call a meeting to determine if a corporation should terminate. Meeting minutes are to be recorded. Two-thirds of the shareholder vote is often required for dissolution.
After voting to dissolve, file the appropriate state form, take inventory of corporate property, and plan to liquidate it. Contact a lawyer and accountant for assistance.
Tax Considerations
By filing Form 2553, a corporation elected S corporation status, which remains until revoked or terminated. S election revocations must be met by a strict deadline.
Before dissolution, ensure the corporation is in good standing. Hold a vote, file articles of dissolution, and document the final decision.
Notify the IRS of dissolution by filing Form 966. File a final tax return and handle taxes relating to employees.
Follow both state laws and IRS rules when dissolving a corporation. Inform both agencies, pay creditors, distribute assets, and file articles of dissolution.
Termination Methods and Aftermath
Shareholder Action, Board Action, and Filing for Bankruptcy are the three ways to terminate a corporation.
When dissolving, resolve affairs, file required documentation, and avoid penalties by completing the formal dissolution process.
Reasons to dissolve: bankruptcy, loss of profits, obtaining funds, investing elsewhere, or the inability to attain synergy. Typically, shareholders voluntarily dissolve when the company has no further use.
After dissolution, appoint a liquidator to sell assets, and pay creditors. The best way to end a corporation is through an orderly dissolution process.
Dissolution in Different Jurisdictions
To legally end a UK business, follow specific procedures: file paperwork, close accounts, and publish a dissolution notice. Remember, it’s illegal for a company to continue trading once dissolved.
Dissolution isn’t an option for insolvent companies. Directors must ensure that all creditors are paid within 12 months of dissolution.