Are you ready to stop doing business with your Washington corporation, but you’re not sure how the official dissolution process works?
The state of Washington 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 Washington 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 Washington Secretary of State.
- Fulfill all tax obligations with the state of Washington, 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 Washington 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 Washington, you’ll need to fill out and file a document known as the Articles of Dissolution. This form requires the following information:
- Your UBI#
- Name of your corporation
- Affirmation that a Revenue Clearance Certificate is attached (which you can apply for here)
- The date the dissolution was adopted, whether the same as filing date or a future date
- Return address for the filing
- Name and address of the individual authorized to file the articles
Unlike some states, Washington does not require a filing fee for these articles. That said, if you choose to expedite your filing, there is a $50 fee. You can pay this fee by check, money order, credit card, or cash. Checks and money orders should be made payable to the Secretary of State.
Regardless of whether or not you expedite, you should send your form and payment to the following address:
Office of the Secretary of State
Corporations Division
801 Capitol Way S
Olympia, WA 98504-0234
Under typical circumstances, you can expect the state of Washington to process your dissolution filing within one month. Expedited filings are usually processed within two business days.
How to Dissolve a Washington 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 hasn’t conducted business is similar to a corporation that has. You even use the same form. You’ll also need to fill out the application for tax clearance.The primary difference is that you won’t have to worry about reimbursing shareholders.
Just like dissolving a corporation that has issued shares, Washington does not charge a fee for dissolution. A fee is levied only if you choose to expedite your filing. You can mail in your form (with payment for expediting if applicable) to the same address:
Office of the Secretary of State
Corporations Division
801 Capitol Way S
Olympia, WA 98504-0234
Washington processes most dissolution filings within a month of receiving it. Expedited filings are usually processed within two business days.
What Else Do I Need to Know About Dissolving a Corporation in Washington?
The day after the state of Washington 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. Your corporation may also be dissolved if a court judges your business activities to be illegal or against public interest.
If you change your mind about your voluntary dissolution, you can revoke your decision. To do so, you can file a revocation of dissolution with the Secretary of State. That said, you must do so within 120 days of the dissolution. And before you do, you should check that your business name was not claimed while your corporation was dissolved.
Reinstating a corporation that was dissolved by force is a little harder. You can do so, but first you’ll need to address the issue that caused the dissolution. For example, if delinquent annual reports caused you to dissolve, you’ll need to file those missing reports before applying for reinstatement. These filings carry their usual fees plus a $25 late fee per late 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 Washington 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 Washington corporation!