Articles of Dissolution Arizona: Everything You Need To Know
The articles of dissolution Arizona is the document required to officially dissolve a business entity registered with the state.3 min read
The articles of dissolution Arizona is the document required to officially dissolve a business entity registered with the state. Dissolution means to end the existence of a legal entity such as a corporation or limited liability company (LLC).
Formation of an Arizona Company
To form an Arizona corporation, you must submit articles of incorporation to the State Corporation Commission. Registering a new company carries legal, reporting, and tax obligations with the state. Penalties are assessed for businesses that do not adhere to these guidelines.
Steps To Dissolve an Arizona Business
The state will not consider your business dissolved until you take the following steps to wrap up the company's affairs and pay debts.
- Hold a meeting of your board of directors and pass a resolution to dissolve the corporation. Minutes from this meeting must be officially recorded. Organizations that do not have a board can skip this step.
- Corporations with shareholders must have the dissolution plan approved by a majority of shareholders in a vote at a shareholder meeting. This decision must be documented in writing.
- File outstanding annual reports with the Arizona Corporation Commission.
- Pay all outstanding business debts and notify your creditors about the dissolution of your business. This notification must provide a deadline for claim submission and a mailing address to which claims must be sent. Publication of the notice of dissolution in a local newspaper is not legally required unless your dissolution requires a tax clearance certificate. However, doing so may protect you from a future lawsuit by an unpaid creditor.
- Pay outstanding administrative fees and taxes to the Arizona Corporation Commission.
- Distribute the remaining business assets, which must be divided among shareholders in proportion with their ownership interests and reported to the IRS.
- Close your business bank accounts and lines of credit.
- Cancel all city, county, regional, and state business licenses and permits. Failure to do so may create financial or reporting obligations with the state.
- File IRS Form 966 within 30 days of approval of your dissolution plan.
- Cancel your federal tax ID number (EIN). This number will be automatically inactivated by the IRS when you file the business's last tax return. However, closing the account yourself can limit the risk of future issues. You can reactivate the EIN if you want to use it for a new business in the future. You must be in good standing with the IRS to cancel your EIN, meaning that all returns have been filed and outstanding taxes and fees paid.
Dissolution by the State
In certain circumstances, the state will administratively dissolve your Arizona business entity. This may occur if:
- You owe state penalties and fees that are more than 60 days late.
- Your annual corporate report is more than 60 days late.
- You do not maintain a business address in the state and/or a registered statutory agent.
- You do not notify the Arizona Corporation Commission of a change in the statutory agent or business address within 60 days of the change.
- You do not file proof of publication within 60 days if you were required to publish a notice of dissolution.
- The stated duration established by your articles of incorporation has expired.
- A corporate representative or officer has made a material misrepresentation of fact in any official document.
- A required certificate of disclosure was not submitted.
Considerations To Remember
The length of the dissolution process for your Arizona business entity depends on the time you need to complete each of the actions listed above. The state processing time for articles of dissolution is typically 15 to 20 business days, but this varies depending on the current commission workload.
Pending articles of dissolution can be canceled without notice. If your articles have been approved and you want them to be revoked, you can make a request within 120 days of the dissolution date.
If you have registered your Arizona business as a foreign corporation in other states, these foreign entities must be dissolved before the primary domestic entity can be dissolved.
The articles of dissolution and articles of termination each carry a $25 filing fee, or $35 if you need expedited service.
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