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 South Carolina.
What It Means to Dissolve a South Carolina 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 South Carolina Secretary of State to file the Articles of Dissolution which will be discussed below.
- Next, you have to complete all of the IRS tax requirements with the State of South Carolina.
- 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 South Carolina 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 South Carolina that have initiated business and have already issued shares, they need to file the Articles of Dissolution with the South Carolina Secretary of State.
When filling up the Articles of Dissolution, you will need to put in some information. 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 for the 10 dollars that is made payable to the South Carolina “Secretary of State”. After you have completed all the information needed, you can choose to mail the forms or deliver them (copies) and the 10 dollars check to the address:
SC Secretary of State
Attn: Corporate Filings
1205 Pendleton Street, Suite 525
Columbia, SC 29201
Under normal circumstances, It’ll take about 2 working days for the South Carolina Secretary of State to process the dissolution of your corporation.
Dissolving a South Carolina 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 South Carolina that have not yet issued shares or had any business transaction, you will need to follow the same steps outlined above, however, you’ll have to fill the Articles of Dissolution in a slightly different manner because your corporation has not yet issued shares.
You’ll submit the document to the address above and follow the same steps explained above. The duration of time it takes is the same as above.
Dissolving a Corporation in South Carolina: Other Things You Should Know
You can still claim your business name after you have filed for a voluntary business dissolution for the 120 days that follow. However, the name becomes available for anyone after the 120-day business name protection period. If your business is dissolved involuntarily, the State of South Carolina will protect your business name for 2 years, after which the name will be available to anyone who chooses to use it.
There are some instances wherein South Carolina State will be the one to initiate dissolution. This is known as administrative dissolution or involuntary dissolution.
This can happen, for example, if a corporation or a company refuses or fails to submit its annual reports by the deadline. In a case like this, you’ll need to request reinstatement by applying for a reinstatement form from the South Carolina Secretary of State.
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 South Carolina.
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 South Carolina.