How to Dissolve Your Washington Business
If you’ve decided to move on from the business you’ve started and it doesn’t make sense to sell it, you’ll likely want to dissolve your Washington business. To do so, you’ll need to consider the following steps:
Dissolving a Corporation
To voluntarily dissolve a Washington corporation, generally the corporation’s board of directors will propose dissolution and submit the proposal for a vote by the shareholders. Two-thirds of the authorized shareholders then must approve the proposed dissolution. The initial directors, incorporators, or board of directors may also dissolve the corporation by majority vote under certain circumstances, like when no shares have been issued.
Following the vote to dissolve, the corporation must file Articles of Dissolution with the Secretary of State to notify the state of the corporation’s intention to dissolve the company. There’s no filing fee in Washington to file the form unless you want expedited service. You do need to provide the Secretary of State a Certificate of Clearance from the Department of Revenue. You should also close out your account with the Department of Revenue. Once you close out your account with DOR, you have to pay any outstanding taxes within 10 days.
Your corporation’s bylaws may have different requirements, and you should consider your specific situation.
Dissolving a Limited Liability Company
Once the Washington limited liability company has decided to dissolve, either through the consent of all members or as otherwise required by the operating agreement, you can file the Certificate of Dissolution with the Secretary of State. There’s no filing fee in Washington to file the form unless you want expedited service. Unlike with dissolving a corporation, you do not need to provide the Secretary of State with a Certificate of Clearance for an LLC. You should close out your account with the Department of Revenue. Again, once you close out your account with DOR, you have to pay any outstanding taxes within 10 days.
Winding Down Your Business
After dissolution, the business continues to exist for the purpose of taking care of final matters. You should designate an officer to handle the winding up process. During this process the business must collect the business assets, pay creditors, close operations, and disburse any remaining assets to shareholders or members. Keep in mind that the person handling the winding up process may be personally liable for obligations of the business if such person participates in business activities that are not required for winding up.
If you’d like more information about how to dissolve your Washington business, please contact us today.