Are you ready to stop doing business with your Kentucky corporation, but you’re not sure how the official dissolution process works?
The state of Kentucky 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 Kentucky 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 Kentucky Secretary of State.
- Fulfill all tax obligations with the state of Kentucky, 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 Kentucky 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 Kentucky, you’ll need to fill out and file a document known as the Articles of Dissolution (Form DIS). This form requires the following information:
- Name of your corporation
- Date of dissolution authorization
- Who approved the dissolution (board of directors or shareholders)
- Voting information, including:
- Number of votes cast for dissolution
- Number of votes cast against dissolution
- Effective date of dissolution
- Signature of officer or chairman of the board
Once you’ve finished filling out your Articles of Dissolution, you’ll need to write a check for $40 to “Kentucky State Treasurer.” Then, mail three copies of your form (one for the Secretary of State, one for the local county clerk’s office, and one for the Secretary of Revenue), along with your check, to the following address:
Alison Lundergan Grimes
Secretary of State
P.O. Box 718
Frankfort, KY 40602
Under typical circumstances, you can expect the state of Kentucky to process your dissolution filing within three business days of receiving it.
How to Dissolve a Kentucky 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 Form DIS, an incorporator will need to fill out and file the Articles of Dissolution (Form IPD). This form requires less specific info than the Form DIS, as it only includes the following:
- Name of your Kentucky corporation
- Date of incorporation
- Affirmation from the signing officer that:
- None of the corporation’s shares have been issued
- The corporation has not commenced business
- No debts remain unpaid
- Net assets of the corporation remaining have been distributed
- Effective date
- Signature of officer or chairman of the board
Just like with the Form DIS, you’ll also need to write a check to the “Kentucky State Treasurer” for $40. Instead of three copies, you just need to submit two, as the Secretary of Revenue doesn’t need one if your corporation didn’t issue shares or transact business. These documents (and your check) go to the same address as they would with Form DIS:
Alison Lundergan Grimes
Secretary of State
P.O. Box 718
Frankfort, KY 40602
Finally, the Articles of Dissolution (Form IPD) has the same 1-3 business day turnaround as Form DIS.
What Else Do I Need to Know About Dissolving a Corporation in Kentucky?
The moment the state of Kentucky 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 annual report within 60 days of the due date.
it can be a real hassle to reinstate your corporation. The reinstatement process involves the completion of the state of Kentucky’s reinstatement packet. This packet must include the Application for Reinstatement form, a reinstatement annual report, a statement of change of registered agent, and a letter of good standing from either the Kentucky Revenue Cabinet or the Division of Unemployment Insurance.
Finally, the reinstatement fee for a corporation in Kentucky is $100, and you’ll also need to pay $15 for each year you missed an annual report. 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 a Kentucky corporation that has not distributed shares or transacted business is very simple, but if you have completed either of those steps, the process is far more time-consuming.
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 Kentucky corporation!