Are you ready to stop doing business with your Iowa corporation, but you’re not sure how the official dissolution process works?
The state of Iowa 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 Iowa 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.
- Draft the Articles of Dissolution and submit them to the Iowa Secretary of State.
- Fulfill all tax obligations with the state of Iowa, 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 Iowa 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.
There is no formal document for corporate dissolution in the state of Iowa. You will need to draft and submit your own Articles of Dissolution. To do this, you simply need to draft a document that includes the following:
- Name of your corporation
- Date of dissolution authorization
- Manner of dissolution authorization (board of directors or shareholders)
- Signature of authorized representative
Once you have finished drafting the Articles of Dissolution, you will need to include a check for $5 made payable to the “Secretary of State.” Finally, you can send the form and the check to the following address:
Secretary of State
Business Services Division
Lucas Building, 1st Floor
Des Moines, Iowa 50319
If you file in person, you can have your corporation’s dissolution processed while you wait. However, if you file by mail, it generally takes 2-3 business days for the Secretary of State to process your documents.
How to Dissolve an Iowa 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.
The process for dissolving a corporation that has not distributed shares or commenced business is virtually the same in Iowa. You will still need to draft your own Articles of Dissolution and submit them to the Secretary of State. The Articles of Dissolution must include the following:
- Name of your corporation
- Date of incorporation
- Affirmation of at least one of the following:
- No shares have been issued
- The corporation has not commenced business
- Affirmation that no debts remain unpaid
- Affirmation that, if shares were issued, all remaining assets have been distributed to the shareholders
- Affirmation that the majority of incorporators or initial directors authorized the dissolution
- Signature of authorized representative
This form must also be accompanied by a check for $5 made payable to the “Secretary of State.” The forms and the check can be filed in person or by mail at the following address:
Secretary of State
Business Services Division
Lucas Building, 1st Floor
Des Moines, Iowa 50319
In-person filing can be processed while you wait, but filing by mail will take about 2-3 business days to process.
What Else Do I Need to Know About Dissolving a Corporation in Iowa?
Like most states, your business name becomes available for others to use as soon as your dissolution is processed in Iowa. However, this only applies for voluntary dissolutions. If the state of Iowa chooses to dissolve your corporation (also known as an administrative dissolution), your name remains protected for up to 5 years following the dissolution.
In Iowa, administrative dissolutions are reserved for corporations who fail to file their biennial report (and pay the $45 filing fee) in a timely manner. In general, the Secretary of State will send notice 60 days after the due date. If you still fail to file your biennial report within 60 days of this notice, the state will dissolve your corporation.
If you wish to reinstate an administratively dissolved corporation, you will need to file the Application for Reinstatement with the Secretary of State, in addition to filing any delinquent biennial reports and paying any required fees.
Finally, if you do choose to voluntarily dissolve your corporation, you still have 120 days to revoke the dissolution. You may do so by filing the Articles of Revocation of Dissolution with the Secretary of State. You can learn more about this process here.
Conclusion
Iowa makes it easy to dissolve a corporation, since you can draft your own Articles of Dissolution and are not required to provide a lot of information. However, the process for reinstating a dissolved corporation is a little more complex, so it is best to only file for dissolution if you have no plans to continue 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 an Iowa corporation!