Are you ready to stop doing business with your Colorado corporation, but you’re not sure how the official dissolution process works?
The state of Colorado 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 a Colorado 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 the Articles of Dissolution with the Colorado Secretary of State.
- Fulfill all tax obligations with the state of Colorado, 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 a Colorado 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 Colorado, you’ll need to fill out and file the Articles of Dissolution via the Secretary of State’s website. You can see a sample version of the form here. The Articles of Dissolution require the following information:
- State ID number
- Corporate name
- Principal office address
- Mailing address (if different from the principal office address)
- Affirmation of dissolution
- Payment information
You will also need to provide payment of the $25 processing fee. Unless you choose to delay the date, your dissolution will be completed upon submitting the form.
How to Dissolve a Colorado 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.
However, the process is the same. You will still need to fill out and file the Articles of Dissolution on the Secretary of State’s website. All of the same information is required.
Needless to say, you will also need to pay the $25 processing fee and the dissolution is immediate (unless otherwise stated in your application) as soon as you click “Submit.”
What Else Do I Need to Know About Dissolving a Corporation in Colorado?
The moment the state of Colorado 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 if you fail to file your periodic report or fail to maintain a registered agent. In order to reinstate an administratively dissolved corporation, you will need to file the Articles of Reinstatement. You can learn more about this process here.
Your corporation can also face judicial dissolution via court order, in which case there is no process for reinstatement.
Conclusion
The process to dissolve a Colorado corporation is very simple, but it can be a pain to reinstate a corporation, so you should only start the dissolution process if you have no plans to continue doing business in the state.
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 a Colorado corporation!