How to Dissolve an S Corporation in Massachusetts
Hopefully, you and your shareholders have enjoyed doing business as a Massachusetts S Corporation. However, for whatever reason, the time has come to close up shop. The death of a corporation is known as "dissolution." A Massachusetts S Corporation is no different than a Massachusetts C Corporation when it comes to dissolving the legal entity. You must first authorize the dissolution and then file certain forms with the Massachusetts Secretary of State. Once dissolved, your S Corporation no longer exists.
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Instructions
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Call a special meeting of the board of directors for the specific purpose of voting on whether or not your S Corporation should dissolve. Check your business' bylaws for specific guidelines about how to call the meeting and how many votes are needed. Typically, unless the bylaws specify otherwise, a majority of the board of directors must vote in favor of dissolving the business.
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Put the proposed dissolution up to a vote of the shareholders. Once approved by the board, at least two-thirds of the shareholders must also vote in favor of dissolving the S Corporation. Check your bylaws for specific guidelines on how to call the meeting of the shareholders and how to vote.
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Fill out and file the "Articles of Dissolution." This form must be filed with the Secretary of State. Check with your Secretary of State Office for forms and specific instructions. Typically, you must list the name of the S Corporation, state that the dissolution was approved, and note the date of the dissolution.
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File all annual reports for the last ten years with the Massachusetts Secretary of State.
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Send a letter to the Massachusetts Department of Revenue stating that your S Corporation is dissolving. The letter must be printed with a corporate letter head and must be signed by an officer of the corporation. Include a copy of the vote authorizing the dissolution with this letter.
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Publish a notice that your company has dissolved in a newspaper of regular circulation in the county where you S Corporation was registered.
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Pay all outstanding debts and finish any outstanding business. Distribute any excess funds over to the shareholders.
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References
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