Are you ready to stop doing business with your Louisiana corporation, but you’re not sure how the official dissolution process works?
The state of Louisiana 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 a Louisiana 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.
- File the Affidavit to Dissolve (Corporation) with the Louisiana Secretary of State.
- Fulfill all tax obligations with the state of Louisiana, 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 Affidavit to Dissolve (Corporation). With that in mind, let’s dive into the details of this step.
How to Dissolve a Louisiana 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.
Once the meeting has been held and a resolution reached, you have two options for filing. You can file online, which is much simpler because you can forego notarizing or mailing any documents. Alternatively, you can file by mail with a notarized Affidavit to Dissolve (Corporation). This form is available to file online or print out right here. This is a very short form that only requires the following information:
- Name, address, and contact information of the applicant
- State of formation
- Parish/county of formation
- Corporation name
- Affirmation of the following:
- The corporation is no longer doing business
- The corporation owes no debts
- Signatures of the shareholders or incorporators
- Signature of the Notary Public
If you’re filing online, you will simply need to provide payment of $75 and then submit the form on the Secretary of State’s website. However, if you are filing by mail, you will need to get the document notarized and include a check for $75 made payable to the “Secretary of State.” Then, you can mail the form and check to the following address:
Commercial Division
P.O. Box 94125
Baton Rouge, LA 70804-9125
It usually takes between 7-10 business days for the Secretary of State to process the dissolution paperwork.
How to Dissolve a Louisiana 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 dissolving a corporation that has not commenced business or distributed shares is the same, you will just need to fill out the Affidavit to Dissolve (Corporation) a little differently. You still have the option to file online or by mail, and you will still need to provide all of the same information listed above. However, you will need to check the box that affirms that the undersigned are “the incorporators of the above named corporation and no shares have been issued.”
Both online and mail filings require payment of $75, with checks made payable to the “Secretary of State.” Additionally, mail filings must be notarized and sent to the following address:
Commercial Division
P.O. Box 94125
Baton Rouge, LA 70804-9125
The process to dissolve your corporation will take between 7-10 days in Louisiana.
What Else Do I Need to Know About Dissolving a Corporation in Louisiana?
One of the most important factors when choosing to dissolve your corporation is the potential to conduct business at some point in the future. While it is relatively easy to revive a business in Louisiana, you lose claim to your business name as soon as your corporation is dissolved. So, if you do wish to revive your corporation in the future, you will have to ensure that your business name has not been taken by someone else.
While corporations generally dissolve through the normal process of voluntary dissolution, it is also possible to have the state initiate an administrative dissolution. If you fail to file your corporation’s annual report on time, your business will be listed as “Not in Good Standing.” To return to “Good Standing,” you simply need to file the delinquent annual report(s). However, if you fail to file your annual report for three years, the state of Louisiana will administratively dissolve your corporation. Thankfully, the process to reinstate an administratively dissolved corporation is not too complicated or expensive. You will just need to file your delinquent annual reports and contact the Secretary of State’s office to file for reinstatement.
One important note is the different filing processes for domestic and foreign corporations. If your corporation is foreign to the state of Louisiana, you will need to file the Application to Withdraw (Foreign Corporation) in duplicate with the Secretary of State (you can access the form here). The filing fee is $125, and the Secretary of State will need to request confirmation from the Departments of Revenue and Labor that all fees and taxes have been paid, which can delay the dissolution process by weeks or even months.
Conclusion
The process to dissolve a Louisiana corporation is very simple if you are filing online, but becomes more complicated when you need to have your documents notarized. Additionally, the process for foreign corporations can be much more time-consuming.
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 a Louisiana corporation!