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 Utah.
What It Means to Dissolve a Utah 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 Commercial Code and the Divisions of Corporation in Utah 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 Utah.
- 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 Utah 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 Utah that have initiated business and have already issued shares, they need to file the Articles of Dissolution for Corporations after issuance of Shares with the Commercial Code and the Divisions of Corporation in Utah.
When filling up the Articles of Dissolution, you will need to put in some information. This includes the following:
- the name and the Entity number of your corporation
- the names, addresses, and the positions held by the corporate officers
- the date of the authorization of the dissolution
- 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 are not required to pay a filing fee for the process. However, you can choose to pay an expedited fee of 75 dollars by writing a check of the 75 dollars that is payable to “the State of Utah”. You’ll then send your document either with the check (if you’re using the expedited service) or without the check (if you’re not using the expedited service) to the address:
Utah Division of Corporations & Commercial Code
PO Box 146705
Salt Lake City Utah 84114-6705
Normally, It’ll take between 5 to 7 working days for the State of Utah to process the dissolution of your corporation. The process takes only 48hours of you have paid for the expedited service.
Dissolving a Utah 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 Utah that have not yet issued shares or had any business transaction, you will need to follow the same steps outlined above, but you’ll have to apply for Dissolution before the issuance of shares through the link. This form requires less specific but similar information to the one described above.
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 Utah: Other Things You Should Know
You can still claim your business name after you have filed for a voluntary business dissolution within 120 days the dissolution of your business was confirmed as the State of Utah protects your business name for 120 days after dissolution. Once the 120 days have passed, the name of your business is made available to anyone who wishes to make use of the name.
There are some instances wherein Utah 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 apply for reinstatement and pay all the fees attached to the process.
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 Utah.
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 Utah.