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 Maine.
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 Maine Secretary of State to file and fill the Form MBCA-II also known as Articles of Dissolution with the Maine Secretary of State.
- Next, you have to complete all of the IRS tax requirements with the State of Maine.
- 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 Articles of Dissolution (MBCA-II) which will be discussed further in the section below.
Dissolving a Maine 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 Maine that have initiated business and have already issued shares, they need to file for the Articles of Dissolution (Form MBCA-II) from the Maine Secretary of State. This form should be accompanied by the Cover Letter of the Filer Contact.
When filling up these forms, you will need to put in some information for the Articles of Dissolution. 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 cover letter of the Filer will have the following information:
- the Name of the person
- the filling the person is making (Articles of Dissolution)
- Any special request on how the file should be handled
- Contact details of the person that is filing the documents
- Mailing details of the person filing the documents
If you file for the Articles of Dissolution in the state of Maine, you’ll have to write a check of 75 dollars that is payable to the Maine Secretary of State as the filing fee. You’ll then mail the forms and the 75 dollars check to the address:
Corporate Examining Section
Secretary of State
101 State House Station
Augusta, ME 04333-0101
It should take the Maine Secretary of State 5 to 10 business days to process the dissolution of your business after your documents have been received.
Dissolving a Maine 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 Maine that have not yet issued shares or had any business transaction, you need to file for and fill the MBCA-III and the cover letter of the filer as explained above. The submission is the same as explained above.
Dissolving a Corporation in Maine: Other Things You Should Know
You can cancel your dissolution within 120 days from the date of filing. You can do this by filing for the articles of revocation of Dissolution, otherwise known as the Application for Reinstatement Following Administrative Dissolution with the Maine Secretary of State.
If 120 days have passed, you will find it more difficult to revoke your dissolution as a dissolved business can only be revived within a particular time and for a particular purpose. In these cases, you’ll have to apply for a Certificate of Revival with the Maine Secretary of State. To make things more straightforward in the long run, it’s best to verify everything before filing your dissolution.
There are some instances wherein the Maine 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 Maine. 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 then contact the Maine Secretary of State for reinstatement. You’ll also need to pay a sum of 600 dollars as a penalty.
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 Maine.
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 Maine.