There are several reasons for dissolving a corporation. It could be due to bankruptcy, an internal dispute, among other reasons.
Suppose you are a business owner and decide to cease your business’s operation. In that case, there are many things that you have to do before your corporation is officially out of business. You don’t just simply stop and then disappear.
With that said, here are the things you should know when dissolving a corporation in Kansas.
What It Means to Dissolve a Corporation
There are some steps a business owner must follow to dissolve his corporation. There may be a few differences between the processes in different states, but most of the steps are similar. Despite the variations of the steps in other states, you must follow the steps below.
- The first step in dissolving a corporation is to hold a board meeting with all the board members present. They all must be aware of the initiative to dissolve the corporation.
Despite the initiative, there must still be a resolution in which most of the board members approve to dissolve the corporation. The shareholders may also need to take part in the voting, but that depends on your organization’s structure. This process must be thoroughly recorded and then stored in the corporate record.
- After this, proceed to the office of the Secretary of State of Kansas to complete the dissolution process.
- Next, you have to complete all of the IRS tax requirements and the state of Kansas.
- After this, all your business licenses and permits must be canceled, and all your business bank accounts must be closed.
- Lastly, concerning your employees, vendors, customers, and everyone who has a connection to the company, notify them of the initiative to dissolve the company.
These steps are easy enough to understand, and you should have no trouble going through with each of them. The only step in this process, which causes the most confusion and is the most complex, is the documents you’ll be submitting to the Secretary of State which will be discussed further in the section below.
Dissolving a Kansas Corporation by the Board of Directors
As discussed above, the first step of dissolving a corporation is by holding a meeting and informing all board members of the plan to dissolve the company.
For those corporations in the state of Kansas that have initiated business and have already issued shares, they need to file the For-Profit Corporation Dissolution by either Stakeholders’ Meeting or Written Consent form with the Kansas Secretary of State, you can file this by mail or in-person. You can equally file the forms online through the Business Filing Center of the Kansas Secretary of State.
When filling these forms, you will need to put in some information which includes the following:
- the name and ID Number of your corporation
- the names, addresses, and the positions held by the corporate officers
- the date of the authorization of the dissolution
- the addresses and names of the corporate directors
- the date to which the dissolution was filed
- the date to which the dissolution will be effective
- the signature of the representative authorized by the company.
- the signatures of all the shareholders with the power to vote for the dissolution of the corporation.
Filing for For-Profit Corporation Dissolution by either Stakeholders’ Meeting or Written Consent form has a filing fee of 35 dollars for which you’ll write a check that is payable to the Kansas Secretary of State. Mail these forms and the 35 dollars check to the address:
Kansas Office of the Secretary of State
Memorial hall, 1st Floor
120 S.W. 10th Avenue
Topeka, KS 66612-1594
You can also complete the process online by submitting the documents online and providing payment of 30 dollars through an online means of payment.
If you choose the online method, your dissolution will be processed immediately. However, It may take between 2 to 3 business days if you file your dissolution by mail or in-person.
Dissolving a Kansas Corporation by the Incorporators
There are instances wherein a corporation is dissolved before issuing the shares or before any business transaction has ensued. In these cases, it is the incorporator’s responsibility to spearhead the initiative of dissolving the corporation.
For all those corporations in the State of Kansas that have not yet issued shares or had any business transaction, you need to file for the Dissolution Certificate before starting a Business with the Kansas Secretary of State.
You will need the same information as the previous step above in filling out this form. As with the previous method, you can also file this dissolution online, through the mail, or in-person.
Dissolving a Corporation in Kansas: Other Things You Should Know
If you dissolve your corporation in the state of Kansas, you’ll lose the claim to the name of your business. However, you can also cancel your dissolution within 3 years days from the date of filing and continue business as usual if you run a domestic corporation in the State of Kansas if your business name hasn’t been taken by another. You can do this by filling for the Certificate to revoke your Dissolution with the Kansas Secretary of State.
There are some instances wherein the state of Kansas will be the one to initiate dissolution. This is known as administrative dissolution or involuntary dissolution.
This can happen if a corporation or a company refuses or fails to submit its annual reports by the deadline. If you are subjected to involuntary dissolution, you have the option to reinstate your business by filing for the Kansas Corporate Certificate of Reinstatement. In addition, you’ll have to pay a sum of 85 dollars as a penalty fee (alongside the 35 dollars filing fee) and you need to have submitted all the reports that caused the administrative dissolution of your business in the first place.
Whether you plan on dissolving your corporation, which has already issued shares and has started making business transactions, or a corporation that hasn’t commenced business yet, the process remains the same in the state of Kansas.
The only significant difference is in the form in that you need to file. Hopefully, this article has been a great help to you in dissolving your corporation in the State of Kanas.