Are you ready to stop doing business with your New Jersey corporation, but you’re not sure how the official dissolution process works?
The state of New Jersey 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 New Jersey 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.
- File for dissolution online, or mail the Certificate of Dissolution (in duplicate) to the New Jersey Division of Revenue.
- Fulfill all tax obligations with the state of New Jersey, 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 Certificate of Dissolution. With that in mind, let’s dive into the details of this step.
How to Dissolve a New Jersey 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.
The easiest way to file for dissolution is through the New Jersey Online Business Endings and Cancellation Service. You can access this service right here. If you prefer to file by mail, you must fill out and file Form C-159S (Certificate of Dissolution) with the New Jersey Division of Revenue. If your shareholders did not hold a meeting to vote for dissolution, you can file Form C-159D instead. No matter how you choose to file, the dissolution process requires the following information about your business:
- Name of corporation
- Corporation number
- Name of registered agent
- Address of registered office
- Names and titles of all directors/officers
- Text of board resolution authorizing dissolution
- Date and place of dissolution vote
- Number of outstanding shares entitled to vote
- Number of votes for/against dissolution
- Signature of the Chairman of the Board, President, or Vice President
You will also need to include Form A-5088-TC (Application for Tax Clearance Certificate) and Form A-5052-TC (Estimated Summary Tax Return) when you file by mail.
The fee to file for dissolution (online or by mail) is $120. Checks must be payable to the “Treasurer, State of New Jersey.” If you file online, you will simply need to follow the prompts and submit your information; if you file by mail, you will need to send the Certificate of Dissolution (in duplicate), the Application for Tax Clearance Certificate, the Estimated Summary Tax Return, and the $120 check to the following address:
New Jersey Division of Revenue (Attn: Business Liquidation)
P.O. Box 308
Trenton, N.J. 08625
Filing by mail generally takes 1-2 weeks, while online filings are processed immediately. However, in either case, the dissolution is not complete until you receive tax clearance from the Division of Taxation, which can take several months.
How to Dissolve a New Jersey 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.
If your New Jersey corporation has not commenced business or issued shares, then you do not need to get tax clearance from the Division of Taxation. You simply need to file Form C-159A (Certificate of Dissolution – Before Commencing Business) with the Division of Revenue. This form requires the following information:
- Name of corporation
- Business entity number
- Name of registered agent
- Address of registered office
- Names and addresses of Incorporators and Directors
- Affirmation that the corporation has not commenced business
- Affirmation that the corporation has not issued shares
- Affirmation that a majority of the Incorporators/Directors approved the dissolution
- Signature of Incorporator(s)
There is no filing fee for Form C-159A. You simply need to file the form online or by mail. If filing by mail, you can send your document to the following address:
New Jersey Division of Revenue
P.O. Box 308
Trenton, N.J. 08625
Filing by mail generally takes about two weeks, while online filings are processed as soon as the Division of Revenue receives your information and payment.
What Else Do I Need to Know About Dissolving a Corporation in New Jersey?
You cannot dissolve a New Jersey corporation if it is not in good standing with the state. If your corporation has been administratively dissolved, you will need to file for reinstatement before you file for dissolution.
A New Jersey corporation can be administratively dissolved if it fails to file its annual reports for two years in a row. The Division of Revenue will notify you and give you 60 days to rectify the issue. If you still do not file the annual reports and pay the necessary fees by the deadline, your corporation will be dissolved.
In order to reinstate an administratively dissolved corporation, you must go to the New Jersey Division of Revenue website, click on “I Want To,” and select “Reinstate My Business.” From there, you simply need to follow the prompts and submit your information. The reinstatement process also requires payment of various penalty fees.
If you have voluntarily dissolved your corporation in New Jersey, the state gives you 60 days to revoke the dissolution. You may do this by filing the Certificate of Revocation with the Division of Revenue.
Finally, if you dissolve your New Jersey corporation after commencing business, the state protects your business name for up to one year. However, if you dissolve your corporation prior to commencing business, your business name is immediately available for somebody else to claim.
Conclusion
The process to dissolve a New Jersey corporation that has commenced business is similar to the process for dissolving a corporation that has not commenced business. However, corporations that have commenced business and issued shares will need to get tax clearance from the Division of Taxation, which can extend the dissolution process by weeks or months.
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 New Jersey corporation!