Are you ready to stop doing business with your Arizona corporation, but you’re not sure how the official dissolution process works?
The state of Arizona 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 an Arizona 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.
Guru 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 Arizona Secretary of State. Additionally, you will need to publish notice of the dissolution within 60 days of your application’s approval.
- Fulfill all tax obligations with the state of Arizona, 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 an Arizona 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 Arizona, you’ll need to fill out and file a document known as the Articles of Dissolution. This form requires the following information:
- Name of your corporation
- Date of incorporation
- Date of dissolution authorization
- Method of dissolution authorization
- Certificate of Compliance requirement
- Number of votes cast for and against dissolution
- Information on voting groups (if applicable)
- Signature
Once you’ve finished filling out your Articles of Dissolution, you’ll need to write a check for $25 (add $35 for expedited service) made payable to the “Arizona Corporation Commission.” Then, mail one copy of your form and check to the following address:
Arizona Corporation Commission
Corporations Division – Corporate Filings Section
1300 W. Washington St.
Phoenix, Arizona 85007-2929
Once the above form and payment have been approved by the Arizona Corporation Commission, you still have two more steps to ensure that the dissolution process is complete. First, you must publish notice of the dissolution in a newspaper located in the county in which your corporation conducts business. This publication must run for 3 consecutive weeks, and the Arizona Corporation Commission requires a signed affidavit confirming your compliance.
Then, you will need to obtain a Certificate of Compliance from the Arizona Department of Revenue. This document will show that your corporation has paid all necessary taxes and fees, and there are no pending debts with the state. This process is referred to as the “Tax Clearance Application” and you can access the necessary form here.
Under typical circumstances, you can expect the state of Arizona to process your dissolution filing within a month, as long as you begin the process for publishing notice of the dissolution promptly after filing the paperwork.
How to Dissolve an Arizona 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 incorporators is the same, though you will fill out the Articles of Dissolution a little differently. You will need to check the box for “Approved by incorporators or board of directors without shareholder action,” after which you can simply sign and date the form.
You will need to write a check to the “Arizona Corporation Commission” for $25 and send the forms and payment to the following address:
Arizona Corporation Commission
Corporations Division – Corporate Filings Section
1300 W. Washington St.
Phoenix, Arizona 85007-2929
After mailing the forms, you will still need to publish notification of the dissolution in a local newspaper for three consecutive weeks (with a signed affidavit) and obtain a Certificate of Compliance from the Department of Revenue.
What Else Do I Need to Know About Dissolving a Corporation in Arizona?
The moment the state of Arizona 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 for various reasons, however the most common are failure to file an annual report, failure to pay fees imposed by the state in a timely manner, and failure to maintain a statutory agent.
it can be a real hassle to reinstate a corporation that has been administratively dissolved. In order to do this, you will need to file the Application for Reinstatement with the Arizona Corporation Commission. This requires a fee of $100. You must file this within 6 years of the dissolution, otherwise the window for reinstatement will close, and you will need to file formation paperwork as a new corporation. Additionally, the rights to corporate names are only held for 6 months after administrative dissolution, after which time other businesses can use your business name. You can access the Application for Reinstatement here.
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 Arizona corporation is relatively simple, albeit time-consuming. In most other states, the process generally takes a few business days, but in Arizona, it can take a month or longer to complete.
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 an Arizona corporation!