Filing Articles of Dissolution

Closing a Company the Right Way
By Kirk Pearson, Legal & Business Analyst MyCorporation It is an unfortunate part of the entrepreneurial world that some businesses end up closing their doors.  This is a hard thing for business owners to do and comes after lots of hard work, sweat, and sometimes tears.  Despite these difficulties, closing down a business is not as easy as closing the doors.  If it is not done the right way, a business owner can be subject to fees and penalties associated with the ongoing existence of the business.

For a company to truly terminate its existence, it needs to file Articles of Dissolution with the state where it was formed.  This notifies the Secretary of State that the corporation or LLC will no longer be in existence or functioning.  The exact requirements for filing Articles of Dissolution vary depending on the jurisdiction, but it is important that they are filed.

Without filing the Articles of Dissolution the state will not know that the business is no longer in existence.  In addition, filing the Articles of Dissolution will stop fees that would normally be due if the business were operating.  This is a formality that may seem like a pain, but it can actually end up saving a business-owner money in the long run.  If several years go by without dissolving a company, the company can be assessed hundreds, and maybe even thousands, of dollars in fees and non-compliance penalties.  Other possible penalties include continued tax liability, continued personal liability, inability to distribute assets, need to file annual reports, and future liability from the products and services sold by the entity.  No business owner wants the insult of more fees and penalties added to the injury that comes from having to close a business.

A company like MyCorporation can help file the Articles of Dissolution for submission to the appropriate state agencies.  This can help alleviate the headache that comes from having to wade through these documents and file them with by yourself or using the costly services of an attorney.  It will also save you money in the long-run.

Pay Your Fees!

Make sure that any outstanding fees owed by the company are paid to the Secretary of State, other agencies, or other companies.
Try:  Check the Secretary of State's website for the state where the company was formed, or qualified, to see if there are outstanding fees by using the link below.

Pay Your Debts!

If the company has any outstanding debts then make sure those are paid. This will make dissolving the company easier and will help to avoid problems with the Secretary of State when trying to push the dissolution through.
Try:  Refer to an attorney or accounting professional if you have questions about how to address any outstanding debts or other liabilities.

Distribute Assets

If the company has assets, make sure the assets have been divided up among the interested parties in the company according to state law.
Try:  Again, refer to an attorney or accounting professional (or both) to make sure this is done correctly and if you have any questions.

File Articles of Dissolution

Do not put off filing the Articles of Dissolution because this can cause more state fees to accumulate.
Try:  Refer to an attorney or accounting professional for any questions.  It can also be helpful to use a company like MyCorporation to prepare and/or file these documents.