A certified copy of a resolution to dissolve a corporation is an important document to maintain when it comes time to dissolve a company. This form is required by the IRS along with Form 966.

Dissolving a Corporation

When it comes time to dissolve or wind up a corporation, there are multiple steps to follow, though the process is not a difficult one. The process is simple enough to be completed on your own, though it is advised to retain the services of an attorney that has experience in the process to make sure that all the steps are met and filed on time.

Shareholder and Director Vote

Before a company can be dissolved, shareholders will need to have a vote, and a 50 percent vote of shares is required to dissolve a corporation voluntarily. The voting can occur at a shareholders meeting or simply be done by filing written consent. In the event that a corporation has no shareholder, then it is up to the company's board of directors to have a majority vote to dissolve a company. If this occurs, the directors will need to file a formal resolution. In the formal resolution, it should be stated that:

  • The Board has the authority to create the dissolution.
  • That there are no shareholders.

Filing of Certificate With the Secretary of State

When a dissolution of a company occurs, the business is required to file a Certificate of Dissolution with the Secretary of State's office. There are some things you need to know when filing your certificate including:

  • The Certificate of Dissolution must be signed by the majority of directors.
  • The corporation will not be legally dissolved until the Certificate of Dissolution is filed with the state.
  • An officer of the company will need to create the document and sign it.
  • The Certificate of Election to Wind Up and Dissolve is required to be signed by the majority of directors, the majority of shareholders, or 50 percent or more of those who represent the majority of voting shares.
  • The Certificate of Election to Wind Up is not required if the election was made by a vote of all outstanding company shares.

Notice

Notices must be mailed promptly after the dissolution has been filed. Notices need to be provided to:

  • All creditors and claimants.
  • All shareholders who did not vote in favor of the dissolution.

Tax Filings

Within 30 days of the resolution adopted, an IRS Form 966 must be filed. Along with the form, you must send in a certified copy of the director's resolution. These files will need to be sent to the district director for the district in which the corporate tax is filed. If any amendment or supplement to the resolution occurs, you will need to file an additional Form 966 within 30 days of the adoption of the amendment.

You also must file a return under section 6043 which will provide information on liquidation and the gains and losses of the shareholders. If you pay franchise taxes, you must also file a final tax return.

Provisions or Payments for Debts

When a dissolution occurs, the Board of Directors will need to satisfy all debts and liabilities or create provisions for these to be settled before they can distribute the remaining assets among the shareholders.

Winding Up Without the Certificate of Dissolution

There are some corporations that do not want to incur the additional expenses that come with filing a Certificate of Dissolution. If you wish to wind up your corporation without filing a certificate, you can ask your designated registered agent to resign. In the event, your company's registered agent quits by filing a Certificate of Resignation with the state, your registered agent will be removed, and it will remove your corporation from good standing. When this occurs:

  • Your company will be void, and your name will go back into the available database.
  • Your Franchise Tax will no longer accrue.

It is important to note that to do this requires the resignation of your registered agent. If you simply cease daily operations of your business and stop paying taxes, you can end up accumulating fees and interest.

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