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 Louisiana.
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 Louisiana Secretary of State to file and fill out an affidavit to dissolve that is notarized.
- Next, you have to complete all of the IRS tax requirements with the State of Louisiana.
- 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 affidavit of dissolution which will be discussed further in the section below.
Dissolving a Louisiana 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 Louisiana that have initiated business and have already issued shares, they need to file for an affidavit of dissolution either by mail or online. You can download it from this link.
When filling up this form, you will need to put some information.
This includes the following:
- the name 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 Notary Public’s signature
If you file for the affidavit online, you’ll have to make a payment of 75 dollars to the Louisiana Secretary of State website through an online method of payment. Meanwhile, if you’re filing the affidavit through the mail, you’ll have to not raise all the documents and add a check of 75 dollars that is payable to the Louisiana “Secretary of State”. You’ll then mail the notarized affidavit and the 75 dollars check to the address:
Commercial Division
P.O. Box 94125
Baton Rouge, LA 70804-9125
It should take the Louisiana Secretary of State between 7 to 10 business days to process the dissolution of your business after your documents have been received.
Dissolving a Louisiana 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 Louisiana that have not yet issued shares or had any business transaction, you need to file for and fill the notarized affidavit of dissolution either online or by mail as explained above. However, you need to indicate that no share has been issued by your corporation. The submission is the same as explained above.
Dissolving a Corporation in Louisiana: Other Things You Should Know
If you dissolve your corporation in the State of Louisiana for any reason, the name of your business becomes available for anyone who would like to make use of it. However, if you have a plan to revive your business later in the future, you need to ensure that your business name is not taken by anyone.
There are some instances wherein the Louisiana state 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, which is usually 3years in the State of Louisiana. If you are subjected to involuntary dissolution, you have the option to reinstate your business by submitting the annual reports you failed to submit and contact the Louisiana Secretary of State for reinstatement.
Conclusion
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 Louisiana.
The only significant difference is in the form that you need to file. Hopefully, this article has been a great help to you in dissolving your corporation in the State of Louisiana.
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