What happens if my corporation is not formally dissolved (i.e., officially dissolved with the Secretary of State) in a timely fashion?
If you are a shareholder in a corporation (or a member in an LLC) that will no longer continue operations in the upcoming business year, it may be wise to complete the process of dissolving your business. Failure to dissolve a corporation or LLC could result in the following: • Tax Filings. The company may be required to prepare and submit tax returns to the IRS, the state, and other municipal taxing authorities. • Personal Liability. Individual shareholders or members may be PERSONALLY liable for the entity’s debts and tax liability. • Annual Reports. The entity may be required to prepare an annual report for the current year—even if NOT conducting business—along with tax payments and penalties. • No Distribution of Assets. Corporate/LLC assets may NOT be distributed to shareholders/members until the entity is properly dissolved. • Future Product Liability. An entity that is not properly dissolved may carry potential future liability from the products and services sold by the entity w
Related Questions
- What happens if my corporation is not formally dissolved (i.e., officially dissolved with the Secretary of State) in a timely fashion?
- What happens if an out-of-state corporation does not file with the Secretary of State?
- What happens if an out-of-state corporation doesn’t file with the Secretary of State?
