Are you ready to stop doing business with your Arkansas corporation, but you’re not sure how the official dissolution process works?
The state of Arkansas requires corporations to file documentation of a dissolution, which can differ depending on a couple of key factors. What are these factors, and what does the dissolution process include? In this guide to dissolving an Arkansas corporation, we’ll break down all the relevant details.
If at any point you need help, you can use a service like Incfile or Northwest Registered Agent to handle the process for you.
Rocket Tip: Most company formation services are also able to dissolve your entity for a small fee. They’ll take care of the paperwork so you can move on. Two popular options are LegalZoom and Incfile.
What Does It Mean to Dissolve a Corporation?
In any state, there is a series of steps that needs to be followed in order to properly dissolve a corporation. While this process does vary some from state to state, for the most part it’s necessary to follow this basic plan (unless your corporation has not yet issued shares or started doing business, which we’ll get to shortly):
- Hold a board of directors meeting and formally move to dissolve your corporation. The resolution to dissolve must be agreed upon by a majority of the corporation’s directors. Depending on your corporation’s structure, you may then need to take the vote to your shareholders. Either way, it’s important to take detailed records of this process for your corporate record.
- Fill out and file one of the following forms with the Secretary of State: the Articles of Dissolution, the Articles of Dissolution by Incorporators or Initial Directors, or the Certificate of Dissolution of a Corporation.
- Fulfill all tax obligations with the state of Arkansas, as well as with the IRS.
- Cancel any relevant licenses and permits, along with closing your business bank account.
- Notify customers, vendors, and creditors of your dissolution.
Most of these steps are fairly self-explanatory, but where many corporation owners run into some confusion is when it comes to the Articles of Dissolution. With that in mind, let’s dive into the details of this step.
How to Dissolve an Arkansas Corporation by the Board of Directors
Most corporations must be dissolved by the board of directors, and we discussed the necessity of holding a meeting to reach this resolution in the previous section.
In the state of Arkansas, some businesses were formed under the old business corporation code and some were formed under the new one. You will need to determine which code applies to your corporation before proceeding.
If your business was incorporated under the new code and you have conducted business as a corporation in the state, then you will need to submit the Articles of Dissolution to the Secretary of State’s office. This form can be filed online or by mail, and you can file either way at this link. This form will require the following information:
- Name of corporation
- Date of dissolution authorization
- Method of dissolution (including the number of votes)
- Title and signature of authorized officer
If you’re filing by mail, you will also need to include a check for $50 made payable to the “Arkansas Secretary of State.” You will also need to submit a final franchise tax report and fee with these documents. Then, you can mail the forms and the check to the following address:
Arkansas Secretary of State
Business and Commercial Services
State Capitol
Little Rock, AR 72201-1094
However, if your business was incorporated under the old code, the process is a little different. You will need to file the Certificate of Dissolution of a Corporation, which must be filed by mail. This form requires all of the same information as the Articles of Dissolution, with a few additions:
- Names and addresses of all corporation officers
- Name and addresses of all corporation directors
The Certificate of Dissolution of a Corporation will also require a $50 check, as well as a final franchise tax report and fee payment. You can mail your forms to the same address:
Arkansas Secretary of State
Business and Commercial Services
State Capitol
Little Rock, AR 72201-1094
Whether you need to file the Articles of Dissolution or the Certificate of Dissolution, the process generally does not take more than 2 business days.
How to Dissolve an Arkansas Corporation by the Incorporators
Sometimes, entrepreneurs need to dissolve their corporation before shares are issued or any business is transacted. In this situation, the incorporator will need to take responsibility for dissolving the corporation.
Instead of the Articles of Dissolution form, an incorporator will need to fill out and file the Articles of Dissolution by Incorporators or Initial Directors. This form can be filed online or by mail, and will require the following information:
- Name of corporation
- Date of incorporation
- Affirmation from the signing officer that at least one of the following is true:
- The incorporators or initial directors have authorized the dissolution
- The corporation has not commenced business
- Dissolution was approved by a majority of votes
- Affirmation that all debts have been paid
- Affirmation that no assets have been distributed to shareholders.
- Title and signature of authorized officer
If you’re filing by mail, you’ll need to write a check to the “Arkansas Secretary of State” for $50. You can then mail the form and check to the same address:
Arkansas Secretary of State
Business and Commercial Services
State Capitol
Little Rock, AR 72201-1094
Just like the Articles of Dissolution and Certificate of Dissolution, the process will take about 2 business days to complete.
What Else Do I Need to Know About Dissolving a Corporation in Arkansas?
The moment the state of Arkansas dissolves your corporation, your business name becomes available for anyone who wants to use it. This is one of the reasons that you should never dissolve a corporation until you’re absolutely certain that you will no longer conduct business in this state.
There’s also the issue of administrative dissolutions to discuss. This is when the state dissolves your corporation without you requesting that they do so. This can happen for any of the following reasons:
- Failure to pay franchise taxes for at least 60 days
- Failure to file the annual franchise tax report for at least 60 days
- Failure to maintain a registered agent for 60 days
- Failure to notify the Secretary of State of a change in registered agent for 60 days
it can be a real hassle to reinstate your corporation. There is no form to file, however you will need to submit any delinquent reports and pay the taxes and penalties. You will also need to file an Authorization for Release of Tax Information so that the Department of Finance and Administration can submit a certificate affirming the payment of all taxes to the Secretary of State.
All told, the administrative dissolution and reinstatement process can be a burden for a corporation, and it’s best to avoid this situation altogether.
Conclusion
The process to dissolve an Arkansas corporation is rather simple, but the paperwork will vary based on the date of your incorporation and whether or not your corporation has distributed shares.
Either way, it’s crucial that you complete each step discussed in this guide accurately, because you certainly don’t want to run into any issues with the dissolution process.
We hope this guide helped you answer any questions you might have had about dissolving an Arkansas corporation!