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 Minnesota.
What It Means to Dissolve a Minnesota 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 Minnesota Secretary of State to file an Intent to Dissolve Notice (for businesses that have issued shares) and then the Articles of Dissolution (for all corporations).
- Next, you have to complete all of the IRS tax requirements with the State of Minnesota.
- 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 and the Intent to Dissolve Notice which will be discussed further in the section below.
Dissolving a Minnesota 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 Minnesota that have initiated business and have already issued shares, they need to file for an Intent to Dissolve Notice with the Minnesota Secretary of State after which they’ll file for the Articles of Dissolution to terminate their business operation from the Minnesota Secretary of State. You can file for the Articles of Dissolution online, by mail, or in-person.
When filling up this form, 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.
If you file for the Articles of Dissolution in the state of Minnesota, you’ll have to make a payment of 55 dollars filing fee if you’re filing online or in-person, or 35 dollars filing fee if you’re filing through the mail. You’ll have to pay another fee for each filing you make. If you choose to file in-person or by mail, you’ll write the check that is payable to the “MN (Minnesota) Secretary of State”. You can file the documents in-person or mail the articles of dissolution and the check to the address:
Minnesota Secretary of State – Business Services
Retirement Systems of Minnesota Building
60 Empire Drive, Suite 100
St Paul, MN 55103
There are different waiting times depending on how you choose to file your documents. If you hand-deliver your documents, the dissolution of your corporation can be processed while you wait. If you choose to file the documents online, it may take up to 1 working day for the process to be completed. Filing by mail takes approximately 1 week to be completed.
Dissolving a Minnesota 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 Minnesota that have not yet issued shares or had any business transaction, you do not need to file for the Intent to Dissolve Notice, however, you’ll have to file for another version of the Articles of Dissolution. This form requires similar information as explained above, and the submission is the same as explained above.
Dissolving a Corporation in Minnesota Other Things You Should Know
You will lose the claim to your business name if your corporation is dissolved after filing for a voluntary dissolution in the State of Minnesota.
There are some instances wherein the Minnesota 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. If you are subjected to involuntary dissolution, you have the option to reinstate your business by submitting the reports you failed to submit, paying all the fines and penalties, and then request for a Form for Foreign Corporation Reinstatement to Transact Business in Minnesota, if you run a Foreign corporation. If you run a domestic corporation in Minnesota, you’ll pay a fee of 25 dollars and file for annual renewal. You can learn more here.
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 Minnesota.
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 Minnesota.