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 Nevada.
What It Means to Dissolve a Nevada 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 Nevada Secretary of State to file the appropriate version of the Articles of Dissolution which will be discussed below.
- Next, you have to complete all of the IRS tax requirements with the State of Nevada.
- 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 Nevada 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 Nevada that have initiated business and have already issued shares, they need to file for the Customer Order Instruction Form and the Certificate of Dissolution with the Office of the Nevada Secretary of State.
When filling up this form, you will need to put in some information for the Articles of Dissolution. This includes the following:
- the name and Nevada ID number 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 Customer Order Instruction Forms will require a return address as well as payment information, and it should be submitted alongside checks of 100 dollars payment as filing fee (and 225 dollars for the expedited service option) with both checks made payable to the Nevada “Secretary of State”. You can mail the forms and check (if you’re not using the expedited service) to the address:
Secretary of State
202 North Carson Street
Carson City NV 89701-4201
Meanwhile, if you paid for the expedited service, mail the forms and checks to the address:
Secretary of State – Las Vegas
North Las Vegas City Hall
2250 North Las Vegas Blvd, 4th Floor
North Las Vegas, NV 89030
It may take up to a week for your dissolution to be processed if you process it with the standard fee. Meanwhile, it usually takes 24 hours or less if you file with expedited service.
Dissolving a Nevada 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 Nevada that have not yet issued shares or had any business transaction, you will also need to file for a different version of Nevada Certificate of Dissolution and the standard Customer Order Instruction Form. The submission is the same as explained above.
Dissolving a Corporation in Nevada: Other Things You Should Know
You don’t need a tax clearance in the State of Nevada to dissolve your corporation. Note that you’ll lose claim to your business name if you file a voluntary dissolution of your corporation in the state of Nevada.
There are some instances wherein the Nevada 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 within 5 years it has been dissolved by filing either the Articles of Incorporation or Application for Revival and then paying all fees and penalties.
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 Nevada.
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 Nevada.