Are you ready to stop doing business with your North Carolina corporation, but you’re not sure how the official dissolution process works?
The state of North Carolina 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 North Carolina 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 the Articles of Dissolution with the Corporations Division of the North Carolina Secretary of State’s office.
- Fulfill all tax obligations with the state of North Carolina, 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 North Carolina 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.
North Carolina corporations that have already commenced business and issued shares will need to file Form B-06 (Articles of Dissolution by Board of Directors and Shareholders) with the Secretary of State, Corporations Division. This form requires the following information:
- Name of corporation
- Names, titles, and addresses of corporate officers
- Names and addresses of corporate directors
- Date of dissolution authorization
- Effective date of dissolution
- Date of dissolution filing
- Signature of authorized representative
You will need to include payment for the $30 filing fee with the Articles of Dissolution. You can upload your documents directly to the Secretary of State’s website and pay online, or mail the Articles of Dissolution and a check (made payable to the “Secretary of State”) to the following address:
North Carolina Secretary of State
Corporations Division
P.O. Box 29622
Raleigh, NC 27626-0622
If you file online, the dissolution can generally be processed in 3-5 business days. However, if you file by mail, it usually takes 7-10 business days.
How to Dissolve a North Carolina 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.
North Carolina corporations that have not commenced business or issued shares will need to file Form B-05 (Articles of Dissolution Prior to Issuance of Shares) with the Secretary of State, Corporations Division. This form requires the following information:
- Name of corporation
- Names, titles, and addresses of corporate officers (if applicable)
- Names and addresses of corporate directors or incorporators
- Date of incorporation
- Effective date of dissolution
- Date of dissolution filing
- Signature of authorized representative
You can still choose to either upload your filing documents directly to the Secretary of State’s website or file by mail. In either case, you will need to pay the $30 filing fee, with checks made payable to the “Secretary of State.” If you choose to file by mail, you can send the form and check to the same address:
North Carolina Secretary of State
Corporations Division
P.O. Box 29622
Raleigh, NC 27626-0622
The Secretary of State can generally process online filings in 3-5 business days, while mail filings take between 7-10 business days.
What Else Do I Need to Know About Dissolving a Corporation in North Carolina?
Unlike many states, North Carolina does not require you to get clearance from the Department of Revenue in order to file for dissolution.
If you would like to revoke a dissolution, you must do so within 120 days of filing the paperwork. You can revoke a voluntary dissolution by filing Form B-07 (Articles of Revocation of Dissolution). Once 120 days have passed, you will need to re-register as a new business, and your business name will become available for someone else to claim.
In some cases, the state of North Carolina can initiate an involuntary or administrative dissolution. This occurs when your corporation fails to file its annual reports in a timely manner. If this happens, you can reinstate your corporation at any time by filing Form B-08 (Application for Reinstatement Following Administrative Dissolution). The state will protect your business name for up to 5 years following an administrative dissolution.
Conclusion
Whether you need to dissolve a corporation that has already commenced business, or one that has not commenced business or issued shares, the process is virtually the same in North Carolina.
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 North Carolina corporation!