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 New York.
What It Means to Dissolve a New York 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 New York Secretary of State to file the Certificate of Dissolution which will be discussed below.
- Next, you have to complete all of the IRS tax requirements with the State of New York.
- 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 Certificate of Dissolution which will be discussed further in the section below.
Dissolving a New York 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 New York that have initiated business and have already issued shares, they need to file the Certificate of Dissolution with the Department of State in New York. They’ll also have to attach a written consent from the Taxation and Finance Department in New York which will show that the corporation to be dissolved is in good standing with the State of New York.
When filling up the Certificate of Dissolution, you will need to put in some information for the forms you’ll be submitting. 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 have to write a check of 60 dollars that is payable to the New York “Department of State”. You’ll then mail or deliver the Certificate of Dissolution, the written consent from the Taxation and Finance Department, and the 60 dollars check to the address:
New York Department of State
Division of Corporations
One Commerce Plaza, 99 Washington Avenue
Albany, NY 12231
It would take the Department of State in New York about 7 business days to complete the processing of the documents. However, more time may be required by the Taxation and Finance Department to provide the written consent.
Dissolving a New York 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 New York that has not yet issued shares or had any business transaction, you will need to follow the same instructions provided above as the documentation process and submission are the same as explained above.
Dissolving a Corporation in New York: Other Things You Should Know
If your business has started its operations in the State of New York, you’ll need to apply for written consent from the New York City Commissioner of Finance by completing the Consent to Dissolution Request Form to the address:
New York City Department of Finance Collection Division
Vendor Tax Clearance Unit
59 Maiden Lane, 25th Floor
New York, NY 10038
Note that you can’t claim your business name after you have filed for a voluntary business dissolution. In essence, your business name can be claimed by someone else in the state of New York.
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 New York.
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 New York.