What Is Illinois Corporation Dissolution?
What is Illinois Corporation Dissolution? In order to dissolve a corporation in Illinois, the Articles of Dissolution Form BCA 12.20 must be submitted.4 min read
What is Illinois Corporation Dissolution? In order to dissolve a corporation in Illinois, the Articles of Dissolution Form BCA 12.20 must be submitted to the Secretary of State with the associated filing fees. The completed form may be sent in by mail or submitted in person.
What Is Illinois Corporation Dissolution?
A corporation in Illinois is officially formulated when the Illinois Secretary of State (SOS) approves your Articles of Incorporation paperwork. Following approval, the business is placed on a list as a corporation that is officially registered with the Illinois SOS. Once the Illinois SOS officially registers the corporation, the business must immediately begin reporting and filing their tax obligations. Failure to comply with required deadlines will subject the corporation to penalties.
If your corporation is officially registered with the Illinois SOS and you would like to close the company, there are necessary measures that you must take. The SOS must be notified of your intention to dissolve the corporation. They have certain requirements that need to be completed prior to officially closing the corporation.
Why Do I Need to Dissolve an Illinois Corporation?
When an Illinois-based corporation officially becomes registered with the Illinois SOS, that corporation immediately is responsible for any obligations from the Illinois Department of Revenue or the Illinois SOS. If the corporation does not pay taxes or file reports, then that corporation may be held responsible for penalties which significantly increase with time. Therefore, unless the corporation has been properly dissolved, the business will be subject to all recurring penalties and fees.
What Do I Have to Do to Dissolve an Illinois Corporation?
There are several steps that need to be completed in order to properly dissolve a corporation in Illinois. For example, there are actions you need to take both before and after the dissolution process according to the Illinois SOS. These actions are largely dependent on a few factors, such as:
- How much stock has been issued, if any?
- What is the value of the stock?
- What type of liabilities or debts does the corporation still have?
In Illinois, the process of dissolving a corporation is significantly easier if the company has not commenced business activity.
What Do I Have to Do Before I Dissolve an Illinois Corporation?
The following are some of the steps that are required in order to successfully dissolve a corporation in Illinois.
- Hold a Board of Directors meeting to officially record the resolution to dissolve the corporation. Remember, if a Board of Directors has been chosen then they must adopt a formal resolution to dissolve the corporation.
- The meeting minutes must be documented and retained in the company's official business records.
- If the corporation does not have a Board of Directors, then the incorporator(s) will have to apply for Dissolution of the Illinois Corporation.
- A shareholder meeting should be held to approve of the Dissolution of Illinois Corporation.
- If the corporation has issued stock, then the majority of its shareholders need to approve the plan to dissolve the business.
- Any approval actions should be properly documented and retained in the company records.
- All annual reports should be filed with the Illinois SOS. It is important to note that the Illinois SOS will not grant approval of the Dissolution of an Illinois Corporation unless all the required reports have been properly filed.
- Take care of any business debts.
- All creditors related to the corporation should be notified of the impending dissolution of the corporation. Provide each creditor a mailing address to submit any claims and provide a deadline date by which claims may be paid.
- Although not a legal requirement, a public notice of the Dissolution of an Illinois Corporation may be a good way to notify anyone who may have a claim against the business. The evidence of a public notification may be beneficial in case a claim against the company is made after the corporation has already been dissolved.
- Pay all the administrative fees and taxes that are owed by the corporation. The Illinois SOS will not approve the dissolution of the corporation until all outstanding taxes and fees have been paid.
How Long Does It Take to Dissolve an Illinois Corporation?
There are many actions that need to be completed before an Illinois corporation can be dissolved. This may include such items as:
- Holding meetings
- Distributing assets
- Closing accounts
Therefore, the time it takes to successfully dissolve a corporation in Illinois will vary greatly. Once the necessary actions are completed, it takes about seven to 10 business days to process the Articles of Dissolution paperwork.
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