Are you ready to stop doing business with your Pennsylvania corporation, but you’re not sure how the official dissolution process works?
The state of Pennsylvania 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 Pennsylvania 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 the Pennsylvania Secretary of State.
- Fulfill all tax obligations with the state of Pennsylvania, 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 Pennsylvania 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.
Pennsylvania requires corporations to file the Articles of Dissolution – Domestic with the Department of State in order to dissolve. This form must be filed alongside the Tax Clearance Certificate (obtained from the Department of Revenue. The Articles of Dissolution form requires the following information:
- Return address
- Name of corporation
- Registered office address or name of commercial registered office provider
- Statute by or under which it was incorporated
- Date of incorporation
- Names and addresses of corporate directors
- Names, addresses, and titles of corporate officers
- Method of dissolution authorization
- Affirmation of discharge of corporate liabilities
- Affirmation of distribution of remaining assets
- Affirmation that no court proceedings are pending
- Signature
Before filing the Articles of Dissolution, you will need to obtain a Tax Clearance Certificate by filing the Application for Tax Clearance Certificate (Form REV-181) with the Department of Revenue and the Department of Labor & Industry. This tax filing does not require a separate filing fee. Once you have your Tax Clearance Certificate, you must submit it alongside the Articles of Dissolution and a $70 check made payable to the “Department of State.” Finally, you can mail your documents and payment to this address:
Pennsylvania Department of State
Bureau of Corporations and Charitable Organizations
P.O. Box 8722
Harrisburg, PA 17105-8722
Once you have filed the paperwork, you will also need to publish notice of the dissolution in two newspapers located in the same county as your corporation.
It generally takes about 4 weeks to receive a Tax Clearance Certificate from the Department of Revenue, and one week for the Department of State to process the dissolution.
How to Dissolve a Pennsylvania 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 corporation has not commenced business or issued shares, you will need to file the Articles of Voluntary Dissolution [Never Transacted Business] – Domestic Corporation in order to dissolve. This form requires the following information:
- Return address
- Name of corporation
- Registered office address or name of commercial registered office provider
- Statute by or under which it was incorporated
- Date of incorporation
- Affirmation that all liabilities have been discharged
- Method of dissolution authorization
- Date of dissolution
- Signatures of the majority of incorporators or shareholders.
Once you have provided the information outlined above, you can submit your document to the Department of State with payment of the $70 filing fee. Checks should be payable to the “Department of State.” You can mail the paperwork and check to this address:
Pennsylvania Department of State
Bureau of Corporations and Charitable Organizations
P.O. Box 8722
Harrisburg, PA 17105-8722
The Pennsylvania Department of State will take about one week to process your dissolution.
What Else Do I Need to Know About Dissolving a Corporation in Pennsylvania?
Once your corporation has been dissolved in Pennsylvania, you cannot carry on further business beyond the activities needed to wind it up. It is also important to note that as soon as the Department of State processes your dissolution, someone else can claim your business name.
Finally, the state of Pennsylvania can administratively dissolve your business if you fail to file your corporation’s decennial report on time. If this occurs, your corporation will lose exclusive rights to its business name. You will need to file your decennial report and pay the necessary fees in order to reinstate your business.
Conclusion
The process to dissolve a Pennsylvania corporation that has not distributed shares or transacted business is simple and generally takes about 1 week, but if you have completed either of those steps, it will take longer because you will need to obtain a tax clearance certificate.
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 Pennsylvania corporation!