If your business is organized as a partnership, LLC, or corporation, then you may need to file dissolution paperwork to properly dissolve your business.
In this guide, we’ll walk you through the actions you’ll need to take in both your business’s home state and every state in which your business has conducted operations.
Why do I need to take this step?
There are four important reasons to file for dissolution:
- In many states, it’s a legal requirement for shuttering businesses to complete and submit dissolution paperwork.
- Until you formally dissolve your business, the government will recognize your business as one that continues to operate and is required to pay annual taxes and fees and final annual reports. When taxes aren’t filed and fees are unpaid, it may continue to be liable for payment and the fines and penalties that come with them.
- Dissolution paperwork can help you put your creditors on notice that your business has ceased operations.
- Formal dissolution may help you to protect your business and/or personal assets against future liabilities.
How do I file for dissolution?
You’ll need to file formal dissolution documents in every state in which your entity has conducted business.
Starting with the state where your business was established, connect with the state’s Secretary of State office and obtain the paperwork you need to complete your dissolution. In many states, this paperwork is called Articles of Dissolution, but it can also be called a Certificate of Dissolution or a Certificate of Termination.
Most states will ask you to bring your taxes current before filing. Some will ask that you also resolve claims and inform your creditors of your intent to close before filing. Other states may require you to file for dissolution before letting creditors know that you’re closing. Because the requirements vary by state, it’s important that you speak with someone from the Secretary of State’s office before proceeding.
Once you’ve confirmed the process you need to follow in your business’s home state, you’ll need to inquire about the steps you should take in every other state in which your business operates. Most states will require you to file a withdrawal or notice of dissolution. Some will ask you to pay a nominal fee. You can learn more by contacting each state’s Secretary of State office.
Why do I need to file a withdrawal in other states?
Until you file a withdrawal, your business will be “active” in each state in which it’s operated. This means it will continue to be held liable for its obligations, and it will be able to incur debts. The dissolution paperwork you file will terminate your active status and will formally dissolve your business.
We’ve listed the phone number for every state’s Secretary of State office. You can also click on any state’s name to link to its Secretary of State website:
What will I need to provide to dissolve my business?
Most states ask for the following information:
- The name of your entity
- The date that your business’s owners, board of directors, or shareholders approved the dissolution and a record of the vote of approval (if applicable)
- The effective date of the dissolution
- The reason for dissolution
What happens after I file to dissolve my business?
The process for dissolution approval usually takes about 90 days to complete. The state’s processing agency will review your submission and ask questions if clarification is needed. Then, you will receive confirmation of your business’s termination.
|If your business operated as a corporation, you’ll need to file Form 966, Corporate Dissolution or Liquidation with the IRS within 30 days of filing your articles of dissolution. A tax attorney can assist you with this form.|
Would you like to connect with a tax attorney who is familiar with federal, state, and local requirements? Click the Connect button below to get started.
While you wait for approval to dissolve your business, you can begin working on some of the other tasks you’ll need to take on. Log into your owner’s portal to access strategies and a personalized to-do list that’ll help you work through every step you need to take to close your business.