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 Montana.
What It Means to Dissolve a Montana 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 Montana Secretary of State to file Articles of Dissolution for Profit Corporation that will be discussed below.
- Next, you have to complete all of the IRS tax requirements with the State of Montana.
- 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 for Profit Corporation which will be discussed further in the section below.
Dissolving a Montana 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 Montana that have initiated business and have already issued shares, they need to file the Articles of Dissolution for Profit Corporations which is available on the Montana Secretary of State website. After you have filed this document, you’ll need to get Tax Clearance from the Montana Department of Revenue and you’ll have to attach the certificate to the Articles of Dissolution you file.
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.
To file for the Tax Clearance Certificate in the State of Montana, you’ll fill out an application for Tax Clearance with the Montana Department of Revenue and mail the form to the address:
Montana Department of Revenue
PO Box 5805
Helena, MT 59604-5805
It usually takes about 2 weeks for the Tax Clearance Certificate to be ready. You’ll don’t need to pay any amount for the filing of the Tax Clearance Certificate. After you have the Tax Clearance Certificate, you’ll then file for the For-Profit Corporation Articles of Dissolution, and you’ll need to write a check of 15 dollars and an optional 20 dollars as an expedited fee, both made payable to the Montana Secretary of State. You’ll then mail the forms and the checks to the address:
Montana Secretary of State
P.O. Box 202801
Helena, MT 59620-2801
It usually takes the Montana Secretary of State within 10 working days to process the dissolution of your corporation. However, it’ll take less than a day if you pay for the expedited service.
Dissolving a Montana 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 Montana that have not yet issued shares or had any business transaction, you will also need to basically follow the instructions explained above. The submission is the same as explained above.
Dissolving a Corporation in Montana: Other Things You Should Know
You can cancel your dissolution within 120 working days from the date of filing in the State of Montana. You can do this by filing for the Articles of Amendment, the State of Montana will protect your business name during this period.
There are some instances wherein the Montana 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 paying a reinstatement fee of 30 dollars that must be paid within 5 years of dissolving your corporation. You’ll also pay a sum of 30 dollars for each report your corporation failed to submit.
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 Montana.
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 Montana.