What do we do when we want to dissolve a company in Alabama? That depends on several different factors.
- What type of business entity is being dissolved?
- Are there any remaining assets in the business, and will there need to be a liquidation?
- Are there any outstanding debts?
- Are the business owners all in agreement about dissolving the company?
Below, we cover how to dissolve a business in Alabama the correct way by providing the appropriate forms, information about the dissolution process, and what to do if you change your mind and need to undo a dissolution of your company.
How to Dissolve an LLC in Alabama
How much does it cost to dissolve an LLC in Alabama? Well, as a business owner, you must file Articles of Dissolution with the Alabama Secretary of State. Filing Articles of Dissolution in AL is more expensive than most other states and the filing fee is $100.
- These articles must include the LLC’s name, the business entity ID number, the effective date of the company’s dissolution, what led to the company’s dissolution, and the information (name, address, and signature) of the person appointed with dissolving the company if the company has no members.
- The appropriate form to dissolve an LLC in Alabama can be found here.
- If you are interested in restoring a dissolved limited liability company, you can file an Amended and Restated Certificate of Formation for Alabama Limited Liability Company.
Dissolving an LLC in Alabama is required by law, and the process to dissolve a business in Alabama is fairly complex. You will need to complete multiple steps before entering a proper Alabama LLC dissolution. To eliminate potential liability, lawsuits, and additional fees, you should consider using the services of a Business Filing Services Company that can affordably dissolve your Alabama LLC for you.
How to Dissolve a Corporation in Alabama
A corporate dissolution (for a C-Corporation or S-Corporation) in Alabama can be done whether a company has issued shares or has not yet issued shares.
The appropriate form to dissolve a company that has issued shares (and those that haven’t) can be found here. This is the specific form you will need to fill out in order to file for an article of dissolution for an Alabama corporation. For non-profit companies, here is the specific form you must fill out in order to complete your company’s dissolution.
To dissolve a Corporation in Alabama, there are multiple requirements and non-compliance that can lead to serious legal consequences. To dissolve your Alabama Corporation the right way, you should consider using the services of a Business Filing Services Company that can do this for you at an affordable, flat fee.
How do I Dissolve a Partnership or Sole Proprietorship in Alabama?
The methods for discontinuing businesses in Alabama really are dependent on how it has been legally organized and the business structure itself. So, for a Sole Proprietorship or a Partnership in Alabama, you will not have to file a form, there are no state-mandated formal requirements to shut up shop for these types of businesses in Alabama.
The process is simple, you must pay any outstanding debts, there is no formation paperwork or dissolution paperwork to fill out, once the debts have been taken care of, you simply terminate accounts and move on. This means that you literally do not have to officially dissolve a Sole Proprietorship or Partnership in Alabama.
Common Filing Requirements and Actions for Dissolving LLCs and Corporations
While there are some specific processes companies must undertake in order to receive a certificate of dissolution from the state of Alabama depending on the type of business, it is crucial that financial debts are settled, bank accounts are closed, outstanding tax obligations (such as sales taxes, business taxes, and state taxes) are paid, and all payroll obligations are fulfilled.
Companies going through a voluntary dissolution must be in good standing with the Secretary of State for the state of Alabama and need to adhere to all state laws surrounding the dissolution process.
Once an Alabama company has been dissolved, and its Articles of Incorporation or Articles of Organization are no longer valid, you should make the Internal Revenue Service aware that the Alabama business has been dissolved.
This notification to the IRS should be in the form of a letter that includes the Business Name, its Federal Tax ID Number (EIN or FEIN), the business address, and the reason for the dissolution.
The Alabama company will need to file a final tax return after you have filed for dissolution (both a federal tax return and state tax return) with the IRS and the Alabama Department of Revenue.
Why Do I Need to Dissolve My Alabama Company?
If you are going to be ending your business, you may wonder why go forward with paying the filing fees and submitting paperwork to dissolve the company? Doesn’t the business just stop once you decide to stop?
Not necessarily – failing to dissolve a company properly can, and will likely lead to penalties, potential lawsuits, and other fees until the company is formally dissolved with the Alabama Secretary of State. It is more cost-effective to pay to dissolve your Alabama company the right way than it is to face penalties, unknown taxes, and late fees.
Other Important Information:
When companies are going through the dissolution process, many internal factors control how the dissolution is authorized or how it occurs. An Alabama company’s operating agreement or corporate by-laws may require its board of directors and shareholders to hold a meeting to plan and vote on the corporate entity’s dissolution.
Once the dissolution has been approved and received, a certified copy will be sent to the probate judge’s office to the Alabama secretary of state, which takes approximately 10 days after the dissolution is filed.
The simplest way to dissolve a business in Alabama is to utilize the services of a professional Business Filing Services Company that will do it all for you. This will eliminate unnecessary administrative costs and potential liability and will ensure it is done correctly and according to Alabama law.
Alabama Company Dissolution by Mail
If you are not able to file online to dissolve your business in Alabama, you can mail the dissolution form to the Alabama Secretary of State.
Here is the address to mail to:
Office of the Secretary of State
P.O. Box 5616,