What do we do when we want to dissolve a company in Delaware? 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?
We show you how to dissolve a business in Delaware the correct way by providing you with 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 Delaware
How much does it cost to dissolve an LLC in Delaware? Well, as a business owner, you must file for a Certificate of Cancelation with the Delaware Division of Corporations. Filing for a Certificate of Cancelation in DE will cost you $200 to file online, and an additional (optional) $50 for a field copy of your documentation.
- These articles must include the LLC’s name, 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 cancel an LLC in Delaware can be found here, you must provide your filing number in order to begin the dissolution process.
- If you are interested in restoring a canceled limited liability company, you will need to pay all the penalties and overdue fees that your business has accumulated, and then you must fill in the specific form with the Division of Corporations.
Canceling an LLC in Delaware is required by law, and the process to dissolve a business in Delaware is complex. You will need to complete multiple steps before entering a proper Delaware 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 Delaware LLC for you.
How to Dissolve a Corporation in Delaware
A corporate dissolution (for a C-Corporation or S-Corporation) in Delaware can be done whether a company has issued shares or has not yet issued shares.
- If a company has issued shares, the Articles of Dissolution must be approved via a shareholder meeting.
- If the company has not yet issued shares, the dissolution must be approved by a majority of the business owners or the Board of Directors of the company.
The appropriate forms to dissolve a company that has issued shares (and those that haven’t) can be found here. And here is a PDF of the appropriate fees you must pay in order to dissolve your corporation or file for reinstation. For non-profit companies, the dissolution process is the same as for regular profit corporations, including the fees.
To dissolve a Corporation in Delaware, there are multiple requirements and non-compliance that can lead to serious legal consequences. To dissolve your Delaware 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 Delaware?
The methods for discontinuing businesses in Delaware really do depend on how the business has been legally organized and the structure of the company itself. So, for a Sole Proprietorship in Delaware, you are not required to file a form or pay any filing fees.
The process is straightforward, you must pay off any outstanding debts that your business may have acquired, there is no dissolution paperwork to fill out, once the debts have been paid, you simply need to terminate accounts and move on.
For Partnerships in Delaware, you must follow the same process as you would for an LLC – file for a certificate of cancellation with the Delaware Corporations Division. The cost is $200, with an optional fee of $50 should you want a certified copy. Here are links to the forms for each type of partnership:
Common Filing Requirements & Actions for Dissolving LLCs and Corporations
While there are specific processes that companies must go through to receive a certificate of dissolution or a certificate of cancelation from the state of Delaware, which officially end the existence of a Delaware business, it is important that financial debts get 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 or cancelation must be in good standing with the Secretary of State and the Division of Corporations for the state of Delaware and need to adhere to all state laws surrounding the dissolution process, which in Delaware’s case, are pretty straightforward.
Once a Delaware 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 Delaware 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 Delaware company will then 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 Delaware Department of Finance.
Why Do I Need to Dissolve My Delaware 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 lead to penalties, potential lawsuits, and other fees until the company is formally dissolved with the Delaware Division of Corporations. It is more cost-effective to pay to dissolve your Delaware company the right way than it is to face penalties, unknown taxes, and late fees.
Other Important Information:
Please note that when filing for articles of dissolution for a Delaware corporation, if your dissolution documents are more than one page you will be required to pay $9 per additional page. The actual fee for filing articles of dissolution for a Corporation is $204, with an additional $50 for the certified copy.
The simplest way to dissolve a business in Delaware, however, 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 Delaware law.
Delaware Company Dissolution by Mail
If you do not want to dissolve your business in Delaware online, you can mail the dissolution form to the Delaware Division of Corporations.
When paying this fee, make sure to include a letter containing your telephone number, return address, and certification requirements, and mail to:
Division of Corporations
John G. Townsend Building
401 Federal Street, Suite 4
Dover, DE 19901
Tel: 302-739-3073
