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 Nebraska.
What It Means to Dissolve a Nebraska 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 Nebraska Secretary of State to submit the Articles of Dissolution you have drafted and some other steps that will be discussed below.
- Next, you have to complete all of the IRS tax requirements with the State of Nebraska.
- 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 which will be discussed further in the section below.
Dissolving a Nebraska 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 Nebraska that have initiated business and have already issued shares, they need to draft the Articles of Dissolution as the State of Nebraska does not make provision for Articles of Dissolution. After they have successfully submitted the drafted Articles of Dissolution, they’ll need to draft and then publish a notice in a local newspaper which must run for three straight weeks. After this process, they’ll need to submit an affidavit they receive from the newspaper to the Nebraska Secretary of State as proof of the publication.
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.
You’ll need to write a check of 45 dollars filing fee (with 5 dollars for each page) made payable to the Nebraska Secretary of State. Mail the forms, the checks, and your cover letter with contact information to the address:
Nebraska Secretary of State
Corporate Division
1445 K Street, Room 1301
P.O. Box 94608
Lincoln, NE 68509
It usually takes 2 to 3 business days for your dissolution to be processed. Note that your dissolution will not be processed until proof of your notice of dissolution is received by the Nebraska Secretary of State.
Dissolving a Nebraska 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 Nebraska 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 Nebraska: Other Things You Should Know
You’ll lose claim to your business name if you file a voluntary dissolution of your corporation in the state of Nebraska. However, your business name will be protected for 1 year if your business was dissolved administratively.
There are some instances wherein the Nebraska 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 biennial reports by the deadline. If you are subjected to involuntary dissolution, you have the option to reinstate your business.
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 Nebraska.
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 Nebraska.
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