Dissolution of a company means you are permanently closing your North Carolina corporation or LLC. If properly closed, you officially end the existence of your company and are no longer required to pay or file further annual fees and/or taxes on the company. However, closing a North Carolina corporation or business is not as easy as just turning off the lights. The process of dissolution involves many forms and steps, and different states have different regulations as to the process. These are the steps you must take for effective business dissolution of your North Carolina corporation or business.
- If you’ve formed an entity, you must conduct a lawful vote to dissolve the company. The meeting must be properly noticed and all applicable statutes and organizational documents must be followed. If your business has an operating agreement, all of the provisions in the agreement pertaining to a dissolution vote must be followed. If it is an LLC without an operating agreement, all owners, or members, must agree in writing to dissolve the LLC. If your LLC does not have any members, a majority of organizers — the individuals who submitted the Articles of Organization — must agree to dissolve the LLC. The dissolution of a corporation is different from an LLC and had different requirements.
- Download the Articles of Dissolution Form. You can download the Articles of Dissolution form from the North Carolina Secretary of State website. You will need to choose the appropriate form, the North Carolina Secretary of State’s official Articles of Dissolution forms are a good place to start.
- Fill out the correct Articles of Dissolution form. Information necessary to complete the Articles of Dissolution form includes: the name of the corporation, the date dissolution was authorized, and the effective date for the dissolution. It is also necessary to include the names, titles, and addresses of the officers of the corporation along with the names and addresses of its directors. Indicate whether the dissolution is occurring pursuant to the happening of an event in the LLC’s operating agreement, or the written consent of all members. Finally, the Articles of Dissolution must be properly signed by the entity.
- File the Articles of Dissolution form with the Secretary of State. There is a filing fee. The current fee for 2011 is $30, payable by check or money order. You may file and pay in person. If you file in person, complete a Cover Sheet for Corporate Filing. You may also mail the form to: Department of the Secretary of State, P.O. Box 29622, Raleigh, NC 27626-0622*An attorney can file the Articles of Dissolution for you
*If you stop filing your annual reports with the Secretary of State, the company will be administratively dissolved after 5 years
- Give legal notice of the Dissolution. Publish the proposed dissolution in the paper and give actual notice to known creditors. There are several statutes that must be followed in a coordinating sequence to avoid personal liability for the assets of the entity or the creditors of the business.
Choosing an attorney to conduct the dissolution process may be the wiser decision for your North Carolina corporation or business. Although the steps may seem easy, it’s also just as easy to do something improperly. This may result in ongoing tax and other legal liability. Attorneys have the ability to negotiate to help you get out of contracts early and can protect the company and its owners from the creditors of the business. They can also help you review whether filing bankruptcy is a good choice.
After you’ve filed and have been approved, here are some additional steps to finalize your closing:
- Cancel your services, licenses, registrations, permits and insurance policies
- Pay all remaining taxes and debts
- Notify employees and customers
- Sell inventory, equipment and other assets
- Close all bank accounts with the business name
- Hold on to your records for at least seven years
The attorneys at Fisher Stark welcome you to call us with questions or to provide assistance for your corporate needs in North Carolina. We serve all North Carolina counties including Gaston, Buncombe, Mecklenburg, Wayne and Yancey.
Last updated 7/5/2015