If you are the owner of a Delaware corporation, there may come a time when you need to dissolve Delaware corporation. This process can be fairly straightforward, but it is important to take the time to understand all of the steps involved. In this article, we will walk you through the entire dissolution process for a Delaware corporation.
How to Dissolve Delaware Corporation?Dissolution is a process that can be accomplished in several ways. One way is to have the business close with an official dissolution. If a company isn’t profitable, this is a good option. Another alternative is to file a certificate of dissolution.
Delaware Certificate of Dissolution: What is it?Certificates of dissolution issued by the State of Delaware provide proof of when a corporation’s official dissolution was accomplished. It also shows the corporation’s name, the date of dissolution, the type of dissolution (e.g., liquidation, merger, etc.), and a statement of the final result of the corporation’s dissolution. The document is not filed in a state’s government office but is filed with the secretary of state.
Steps to Dissolve Delaware Corporation
Organize the Meeting of Corporation Stakeholders
Get the Official Dissolution Document
3 . Submit a Certificate of DissolutionTo officially Dissolve Delaware Corporation, a Certificate of Dissolution must be filed with the Secretary of State. Company name, dissolution date, and filing date are all included on the Certificate of Dissolution. The dissolving procedure typically takes about 30 days to complete. The dissolution certificate is an official document indicating the dissolution of the corporation. It is a legal record to show that all corporate forms are terminated and the corporation can no longer exist.
Once a dissolution certificate is acquired, what steps must be taken?After getting the dissolution certificate, you must complete the next steps. First of all, you should perform the final accounting function for the corporation. The accounting function includes collecting and summarizing all documents related to your company affairs. The documents include the balance sheet, the cash flow statement, and the other financial statements. After collecting the documents, you should share the final accounting report with all shareholders. It will include the final adjusted balance sheet, the final adjusted profit and loss statement, and the final adjusted cash flow statement. You should also make a final report for the outstanding loans, the official registration documents, and any other documents that you need to file.
Inform Claimants About the Corporation’s DissolutionYou must notify the company’s creditors of the dissolution once it has occurred. You must also give notice to all of your corporation’s claimants. Also, inform the Internal Revenue Service. The Delaware law provides very detailed information about what notice you must give and how you must give it. However, the general rule is that the notice is in writing and sent by first-class mail to the last known address for each claimant. There is a strict deadline of 120 days from the day the notification was received to submit a claim. The dissolution notification must include the name and mailing address of the registered agent for the company and the date of dissolution.
Pay All TaxesAfter the dissolution, the Delaware corporation must pay federal taxes and annual report fees. If you have filed a certificate of dissolution and you have made all franchise taxes, you are considered to be dissolved. You must file the reports for the previous years with the Secretary of State within one year after the dissolution. All remaining assets and debts must be accounted for in the report. In other words, it means all assets are converted to cash and all liabilities are settled.
Terminate all Delaware-issued accreditations for doing businessIf your business held permits, licenses, or registrations while it was operating, you need to cancel them when the business is closed. You can find information about terminating your company’s permits, licenses, and registrations on the website of the Delaware Division of Corporations.
Here’s How Goodbye Startup Can Make it Easier For You to Dissolve Delaware Corporation and Avoid Legal IssuesThere is a significant amount of paperwork, time, and effort involved in dissolving a Delaware corporation. If you’re lost and have no one to turn to for guidance, reach out to experts at Goodbye Startup. Goodbye Startup is a team of professionals that helps business owners to dissolve Delaware corporations while meeting all legal requirements. Experts at Goodbye Startup will help you to create a personalized dissolution plan to use as a road map while you dissolve your Delaware Corporation. To Schedule a Free Consultation Call With Goodbye Startup, Click Here.
ConclusionWhen corporations are formed, the corporate documents must be carefully prepared. Legal paperwork must be drawn out following the laws of the state in which the company is incorporated. The articles of incorporation should be prepared according to the needs of your business. Every member of the corporation should sign the documents. Every member should understand what he is signing. It is also important for members of a corporation to be aware of dissolution procedures. When there are just two people involved in the company, the members should make preparations to Dissolve Delaware Corporation. When the corporation has more members, a vote will be held to decide on the dissolution. The members of a corporation should understand that the corporation can be dissolved by the state with a certificate acknowledged by a majority of members. A business owner should understand that the period to dissolve a corporation is different from the period to dissolve a stockholder corporation.
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