A corporation is a separate legal entity created under state law. For tax and liability purposes, the corporation is treated as a separate taxpayer from its owners. In most cases, the shareholders of a corporation are shielded from personal liability for the debts and obligations of the corporation. A corporation can be dissolved in the state of New York in a few simple steps. The process of dissolving a corporation is known as “winding up” and is described in section 1101 of the New York’s Business Corporation Act. Generally, there are two reasons to dissolve a corporation: (1) the corporation no longer wants to conduct business or (2) the shareholders agree to dissolve the corporation. This article will explain how to dissolve a corporation in New York.
How to Dissolve a Corporation in New York?You must first establish a valuation of your New York corporation. You must also ensure that your New York business has fulfilled all of its obligations. However, unlike most states in the United States, New York’s laws governing the dissolution of a business are quite specific. If you want to dissolve your New York business, it’s important to follow the steps laid out in your business’s operating document. However, if you’d like additional help, you can always contact a New York business dissolution service. Although the process of dissolving a New York business can be quite complicated, Experts at 5 Star Registration can guide and help you along the way. They offer an excellent dissolution service to help you dissolve your New York corporation.
Steps to Dissolving a Corporation in New York
1. Organize the Meeting of the Corporation’s Board of DirectorsBefore you dissolve a corporation, you should call a meeting of the corporation’s board of directors to formally dissolve the business. Make sure the majority of members agree to dissolve a corporation. It is important that you file the proper documents with the state as soon as possible after the meeting.
2. Inform IRSThe IRS requires you to give notice before the dissolution of the corporation. The IRS will notify you about the date on which you must file your final tax return for the corporation’s fiscal year in which the corporation is dissolved. The first thing that you have to do is to determine whether you have met Internal Revenue Service regulations and whether your “incurred tax liability” is a big tax consequence. If yes then you have to continue to complete the “filing” process. The IRS also requires that the IRS be notified of the dissolution of your business within 90 days of the date on which the dissolution becomes effective. This is so that the IRS can begin to collect income taxes from the corporation’s former shareholders if any. Written consent to dissolve the company will be issued by the Tax Department in the event that the corporation is up to date with all of its tax filings.
3. Complete the Financial and Legal Requirements Associated With Your New York CorporationIn this step, you will deal with your New York corporation’s legal and financial obligations. This includes paying all legal fees; paying all business debts; paying all taxes; and finally, paying any distributions to all owners. If you have paid any distributions to owners during the business’s life, then you will need to deduct the money paid to each owner from the remaining value of the business.
4. Resolve Your Corporation’s DebtsThe second step in a voluntary dissolution of a New York corporation involves compiling a list of all the corporation’s debts. In general, all debts are considered business debts, and creditors to a business are considered creditors of the business. In New York, the corporation’s creditors have a right of action against the business and may make claims against the corporate assets of the business and the owners of the business. Therefore, it is important that you understand the rights and obligations of creditors by reviewing your business’s operating documents. After completing this compilation, you will be in a position to take the right steps for resolving your corporation’s debts.
5. Understand the New York Corporation’s Dissolution ProcessNew York provides a set of rules and procedures that govern when a business owner can voluntarily dissolve a business. The rules are contained in the New York Business Corporation Law and are a good starting point for understanding the process. In general, the New York voluntary dissolution rules require that your business be owned at least 51% by owners who are not related to each other. It’s not required that the owners have been in business together. It’s also not required that the owners have been in business together for a certain period of time. However, the business must be in good standing, and the business’s assets must be sufficient to satisfy the business’s debts. Once you’ve gathered all your business documents, you need to consider how you will prepare the documents. You must file the dissolution documents with the New York City Department of State’s Office.
6. Ensure that You Follow the Protocols Outlined in the Operating Agreement of Your New York CorporationAfter you have filed the required documents, it is time to dissolve your New York business. A simple way to do this is to file a Certificate of Dissolution. This is usually only done in person at the New York Department of State office. Otherwise, you can do it by mail or fax, as described in your corporation’s operating document.
7. Initiate the Process of Filing a Certificate of DissolutionTo officially dissolve your company in New York City, you must submit a certificate of dissolution to the Department of State. In order to do so, you must give the Secretary a copy of your articles of incorporation, a notice that your corporation is dissolving, and a certificate of dissolution. The notice that your corporation is dissolving will typically state that your corporation is closing its corporate existence and will be dissolved on the date specified. The certificate of dissolution will state that it is granted for the purposes of winding up the affairs of the dissolved corporation, rather than for any other purposes. If the certificate of dissolution states that it is granted for purposes other than winding up the affairs of the dissolved corporation, you must amend the certificate of dissolution to correct that error. You must fill out the dissolution form to file a certificate of dissolution with the New York State Department within six months after you dissolve your corporation.
Here’s How Goodbye Startup Can Make It Easier For You to Dissolve a Corporation in New YorkThe process of dissolving a corporation in New York can be complicated, costly, and time-consuming. If you are thinking of dissolving your corporation in New York, then it is strongly suggested that you use a professional service. The professionals at Goodbye Startup can assist you with dissolving your corporation in New York and avoiding any potential legal complications. They will ensure that your interests are protected and that you avoid unnecessary complications. In addition to this, they will take care of all the necessary legal processes in a stress-free way. It is strongly suggested that you seek the assistance of professionals if you have plans to wind down your company at some point in the near future. To Schedule a Free Consultation Call With the Experts at Goodbye Startup, Click Here.
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