Articles of Dissolution
Articles of dissolution are the filing that formally ends a corporation. Whether a tax clearance certificate must be attached first, and what the filing is even called, are set by your state. Attorney review available.
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Introduction
Articles of dissolution are the filing that formally ends a corporation's legal existence with the state that chartered it. This page is about a domestic for-profit business corporation. An LLC closes through a different instrument, usually a certificate of cancellation or a statement of dissolution, and nonprofit corporations follow their own route. Two things about this filing are set by state law rather than by any national rule, and they are the parts that get filings rejected. First, the tax prerequisite, which differs in kind and not merely in amount. Some states will not accept the filing until the revenue agency issues a clearance certificate the filer has to request and attach. Some require that agency's written consent instead. Some impose no third-agency paper at all but refuse the filing until franchise tax and annual reports are paid up. And some impose no clearance step at all. Second, the instrument's own name, which is articles of dissolution in many states but a certificate of dissolution, a statement of dissolution, articles of termination or a certificate of termination in others, sometimes behind a two-step process that begins with a separate filing of intent. Dissolving is also not the same as disappearing: in most states the corporation continues to exist for a limited period to wind up, pay claims and distribute what is left. Select your state below for its filing name and form, its fee, its tax prerequisite and its creditor notice rules. DocDraft builds your filing from your facts, with attorney review available before you submit it.
Key Things to Know
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Articles of dissolution are the filing that formally ends the legal existence of a domestic for-profit corporation with the state that chartered it. An LLC uses a different instrument and a nonprofit corporation follows a separate route.
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The filing has different names in different states. Articles of dissolution, certificate of dissolution, statement of dissolution, articles of termination and certificate of termination all describe the same step, and some states run a two-step process beginning with a filing of intent to dissolve.
- 3
The tax prerequisite differs in kind, not just in amount. Depending on the state, the filer must attach a clearance certificate from the revenue agency, obtain that agency's written consent, simply pay franchise tax and annual reports up to date, or satisfy no clearance condition at all.
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Dissolution is normally authorized before it is filed, by board resolution plus a shareholder vote or written consent at the threshold the state sets. A corporation that never issued shares or never commenced business often has a shorter route.
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Filing does not make the corporation vanish. Most states continue its existence for a limited period so it can wind up, collect what it is owed, pay or provide for claims, and distribute any remainder to shareholders.
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Notice to creditors and claimants is mandatory in some states and elective in others, and giving it generally shortens the window in which claims can still be brought against the dissolved corporation and its shareholders.
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Until the filing is accepted, annual report and franchise tax obligations usually keep running, which is why a company that stopped operating but never filed can owe tax for years it did no business.
Key Decisions
Your Corporation
Dissolution rules differ by entity type, and the filing has a different name and often a different tax prerequisite for each. This page and this filing are built for a domestic for-profit business corporation.
A for-profit corporation formed in this state
The standard case for this filing. The corporation files articles or a certificate of dissolution with the office that chartered it.
Most Common OptionAn LLC
An LLC normally files a certificate of cancellation or a statement of dissolution instead, under a different article of the state code.
A nonprofit or non-stock corporation
Nonprofit dissolution follows a separate route and often requires an asset-distribution plan and, in some states, attorney general notice.
A corporation formed in another state that is registered here
That is a withdrawal or cancellation of authority to transact business, not a dissolution. Dissolve in the state of incorporation.
Most states provide a shorter route for a corporation that never issued shares or never commenced business, authorized by the incorporators or initial directors without a shareholder vote, and sometimes at a lower fee.
Yes, shares were issued and the business operated
The full route. Board recommendation plus shareholder approval at the threshold the state sets, then the filing.
Most Common OptionShares were issued but the business never operated
Shareholder approval is still normally required, because the shareholders exist. Check whether your state keys its short form to shares or to commencing business.
No shares were ever issued
Usually eligible for the short-form route, authorized by the incorporators or initial directors alone.
Authorizing the Dissolution
The filing normally has to recite how the dissolution was authorized, and the recital has to match what actually happened. States differ on the shareholder threshold and on whether written consent can replace a meeting.
Board resolution, then a shareholder vote at a meeting
The statutory default in most states. Record the number of shares entitled to vote and the number voted in favor.
Most Common OptionUnanimous written consent of the shareholders
Common in closely held corporations and accepted in most states. Keep the signed consent with the corporate records.
By the incorporators or initial directors
The short-form route, available where no shares were issued or business never commenced.
Not approved yet
Authorize first. A filing that recites an approval that has not happened is a false statement signed under penalty of perjury.
Taxes and Creditors
This is the step that most often gets a dissolution rejected. Depending on the state, the filing office needs a revenue-agency clearance certificate attached, that agency's written consent, or simply franchise tax and annual reports paid up to date.
Yes, everything is filed and paid
The clean case. Where a clearance certificate or consent is required, request it now, because the agency can take weeks to issue it.
Most Common OptionReturns are filed but tax is still owed
In a clearance or consent state the filing will not be accepted until the balance is paid. Resolve it before filing.
There are unfiled returns or missed annual reports
File the back returns and reports first. Obligations usually keep accruing until the dissolution is accepted, including for years with no activity.
I do not know
Check the entity's status with the filing office and the revenue agency before starting. Status drives which route is open to you.
Notice to known claimants is mandatory in some states and elective in others, and giving it in the statutory form generally starts a deadline that cuts off claims not brought in time. Distributing assets to shareholders ahead of creditors can create personal exposure.
No, all debts are paid
Still record that debts were paid or provided for, because the filing normally requires that statement.
Most Common OptionYes, there are known creditors
Give notice in the form your state prescribes, with the required deadline, and pay or provide for claims before distributing anything.
There is a pending lawsuit or disputed claim
Dissolution does not end existing litigation. Make provision for the claim and take advice before distributing assets.
Liabilities may exceed assets
An insolvent wind-up carries real director exposure and may call for a different process. Get advice before filing or distributing.
Articles of Dissolution Requirements
Exact Corporate Name and State File Number
The corporation's name exactly as it appears on the filing office's records, plus the state file, charter or entity number. A name that does not match the record, including punctuation and the corporate suffix, is a common reason a dissolution filing is returned.
Entity Type and Correct Instrument
Confirmation that you are dissolving a domestic for-profit corporation and are using that entity type's instrument. An LLC files a certificate of cancellation or statement of dissolution instead, and a corporation chartered elsewhere withdraws rather than dissolves.