A corporation is an independent legal entity that exists separately from its owners. As such, when you own or operate a corporation and you do not wish for the business to exist any longer, you must follow a formal legal process to dissolve the corporation. 
Sepahi Law Group, APC can help you throughout the process of winding up your affairs and officially dissolving the business. Call our San Diego, CA business dissolution lawyers today for help with every step of the process to dissolve a corporation.
The Process to Dissolve a Corporation
The steps in the process to dissolve a corporation in California may include the following:
- The dissolution of the business must be approved by the owners of the company. Typically, the corporate bylaws explain the process for dissolution of the business and specify who needs to approve.
- The Board of Directors should draft and approve a resolution to dissolve the business. Shareholders of the corporation will need to vote on the resolution after it has been approved by the Board of Directors. Both of these actions should be documented and the documentation should be kept in the corporate record book.
- The dissolution, surrender or cancellation forms must be filed with the California Secretary of State within 12 months of filing the final tax return for the business.
- Any delinquent tax returns must be filed and the current and final years tax return must be filed both with the federal government and with the state. The first page of the California return must be labeled “FINAL” and the box labeled “Final Return” must be checked. All tax balances including penalties, fees and interests must be paid according to the California Franchise Tax Board.
- Creditors must be notified that the business is ending. You must provide creditors with a mailing address to send claims to and must provide all information that creditors need to make a claim for outstanding balances due to them. Typically, there is a 120 day deadline from the time the notice is received for the creditors to make their claims. The notification you send to creditors should indicate that claims will be barred if not received by the deadline.
- Settle creditors claims. Your company can accept or reject claims. You should get help from a San Diego corporate dissolution lawyer with the process of deciding how to satisfy outstanding creditor claims.
- Distribution of any remaining business assets. Any assets left after creditor claims are satisfied should be distributed to owners based on their ownership share.
There may be additional requirements specific to your business as well. You should get help throughout the process of dissolving your corporation in order to ensure you are in compliance with all laws in the state of California and to ensure you protect your future financial situation.
Sepahi Law Group, APC has extensive experience helping both large and small companies with the process to dissolve a corporation. Call our San Diego, CA business dissolution lawyers today to schedule your free consultation or contact us online to learn more about how we can represent you as you end your business operations.