Are you ready to stop doing business with your Massachusetts corporation, but you’re not sure how the official dissolution process works?
The state of Massachusetts 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 Massachusetts 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 Articles of Dissolution with the Massachusetts Secretary of the Commonwealth.
- Fulfill all tax obligations with the state of Massachusetts, 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 a Massachusetts 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.
Any Massachusetts corporation that has already conducted business and distributed shares must file the Articles of Voluntary Dissolution with the Secretary of the Commonwealth. You can file by mail or in person, and you can either use the form provided by the state, or draft your own document. Either way, the Articles of Voluntary Dissolution require the following information:
- Name of corporation
- Registered office address
- Date of dissolution authorization
- Method of dissolution authorization
- Effective date of dissolution
- Signature of authorized individual
- Contact information of applicant
In addition to the Articles of Voluntary Dissolution, you must also write a check for $100 made payable to the “Commonwealth of Massachusetts” (other forms of payment are accepted for in-person filing). Then, you can either drop off or mail the form and payment to the following address:
Secretary of the Commonwealth
One Ashburton Place, 17th Floor
Boston, MA 02108
Processing times are generally 3-5 business days when filing by mail, and 1-2 business days when filing in person.
How to Dissolve a Massachusetts 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.
In order to dissolve a corporation prior to commencing business or distributing shares, you will need to file an alternate version of the same form, specifically the Articles of Voluntary Dissolution of Corporation Which Has Not Issued Shares or Has Not Commenced Business. This form will require the following information:
- Name of corporation
- Registered office address
- Date of incorporation
- Method of dissolution authorization
- Affirmation that the corporation has either:
- Not issued any shares
- Not commenced business
- Affirmation that no debts remain unpaid
- Affirmation that, if shares were issued, any remaining assets have been distributed to the shareholders
- Effective date of dissolution
- Signature of authorized individual
- Contact information
Just like the traditional Articles of Voluntary Dissolution, this form must be accompanied by payment of the $100 filing fee, with checks made payable to the “Commonwealth of Massachusetts.” The form and payment can then be dropped off or mailed to the same address:
Secretary of the Commonwealth
One Ashburton Place, 17th Floor
Boston, MA 02108
The processing time will either be 3-5 business days (by mail) or 1-2 business days (in person).
What Else Do I Need to Know About Dissolving a Corporation in Massachusetts?
Any corporation that wishes to dissolve in Massachusetts must file a final tax return with the Department of Revenue. Additionally, a dissolved corporation must notify the Department of Revenue no more than 30 days after the Articles of Dissolution are processed. A corporation is only eligible for voluntary dissolution if it has filed all of its annual reports for the last 10 years.
Generally, the state of Massachusetts does not provide name protection for voluntary dissolutions. However, if you wish to reserve your business name while winding up your corporation, you may do so by filing the Application for Name Reservation. This will reserve the name for 60 days. If your corporation is administratively dissolved by the state, your business name will be protected for up to one year.
Administrative dissolutions occur when a Massachusetts corporation fails to file an annual report for two years in a row, and then does not file the delinquent reports within 90 days of receiving notice from the Secretary of the Commonwealth.
Your corporation can be revived following a voluntary or administrative dissolution by filing an application for reinstatement. The fee for reinstatement is $100, and the fee to file any delinquent annual reports is $125 per report.
Conclusion
The process to dissolve a Massachusetts corporation is relatively straightforward. The forms are simple and the fees are reasonable. However, while dissolution is easy, reinstatement can be more complex, so you should only dissolve your corporation if you have no intention of conducting further business in the state.
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 Massachusetts corporation!