Many corporations choose to incorporate in Delaware because of the state's business-friendly tax structure, corporations bureau and processes. There may come a time when a corporation needs to wind down its business. Delaware also has a rather straightforward procedure for formal dissolution of a C corporation.
Hold a vote on the dissolution of the corporation. The stockholders or board of directors of the organization must authorize its dissolution. The date the vote is taken must be recorded on the Certificate of Dissolution that you will have to file with the state..
Pay any outstanding taxes. Before the Certificate of Dissolution will be accepted for filing, outstanding taxes due to the state must be paid.
File all required annual franchise tax reports. Contact the Franchise Tax Section of the Delaware Division of Corporations prior to submitting the Certificate of dissolution to determine if there are any franchise tax reports due.
Dissolving the Corporation
Create the State of Delaware Certificate of Dissolution for your organization. The Delaware Division of Corporations provides a Certificate of Dissolution form that can be used as a template to create a document that is specific to your organization. The form is available online at the State of Delaware website. This website also includes the instructions, which explain what must be included in the certificate for it to be accepted for filing.
Submit the completed Certificate of Dissolution with the appropriate filing fee. Include a cover letter with the certificate that contains contact information for the person who can answer questions about the organization or the form if necessary.
File the certificate, fee and letter with the Delaware Division of Corporations, 401 Federal Street., Suite #4, Dover, DE 19901.
Creating corporate documents can be challenging and time-consuming. It is always a good idea to consult with an attorney and perhaps an accountant when winding down a corporation.
Nichole Hoskins works as a criminal justice instructor, teaching courses in criminal law to college students in Virginia. Prior to academia, she served as a criminal attorney, later expanding her practice to civil and domestic matters. Though she maintains her licenses to practice, Hoskins now focuses on writing and researching criminal justice topics and trial consulting.