Are you ready to stop doing business with your New Mexico corporation, but you’re not sure how the official dissolution process works?
The state of New Mexico 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 New Mexico 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 (including accompanying forms) with the New Mexico Secretary of State.
- Fulfill all tax obligations with the state of New Mexico, 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 New Mexico 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 New Mexico, the process to dissolve a corporation requires several steps and forms. First, you must file the Statement of Intent to Dissolve and Application for Tax Clearance with the Secretary of State (these forms can be filed at the same time). Then, you can file the Articles of Dissolution.
The Application for Tax Clearance requires:
- Name of corporation
- Business ID number
- Taxation and Revenue ID number
- Effective date of dissolution
- Signature of officer or authorized agent
- Mailing address
- Applicant name and contact information
The Statement of Intent to Dissolve requires:
- Name of corporation
- Business ID number
- Names and addresses of corporate officers
- Names and addresses of corporate directors
- Signatures of shareholders authorizing the dissolution
- Signature of authorized officer
The Articles of Dissolution require:
- Name of corporation
- Business ID number
- Date that the Statement of Intent to Dissolve was filed
- Affirmation that all debts and obligations have been paid
- Signature of authorized officer
When you file the Statement of Intent to Dissolve and Application for Tax Clearance, the Secretary of State will send back a Letter of Clearance, a Certificate of No Tax Due, and a Certificate of Compliance. There is no filing fee for the Application for Tax Clearance, but the Statement of Intent to Dissolve requires payment of a $50 filing fee.
Once you have the Letter of Clearance, the Certificate of No Tax Due, and the Certificate of Compliance, you must file all of these documents with your Articles of Dissolution. The filing fee for the Articles of Dissolution is $50. All checks must be payable to the “New Mexico Secretary of State.”
All forms and payment can be mailed or dropped off at the same address:
New Mexico Secretary of State
325 Don Gaspar, Suite 301
Santa Fe, NM 87501
The Articles of Dissolution take about 15 days to process, but processing times for the Statement of Intent to Dissolve and Application for Tax Clearance can vary.
How to Dissolve a New Mexico 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 issued shares is similar, but you are not required to file the Statement of Intent to Dissolve, and you will need to file a different version of the Articles of Dissolution. This version requires the following information:
- Name of corporation
- Date of incorporation
- Affirmation that no shares have been issued
- Affirmation that the corporation has not commenced business
- Signatures of the majority of incorporators
Once you have filed the Application for Tax Clearance (included in the link above), the Secretary of State will provide you with the Letter of Clearance, the Certificate of No Tax Due, and Certificate of Compliance. Then, you can mail these documents with the Articles of Dissolution to the following address:
New Mexico Secretary of State
325 Don Gaspar, Suite 301
Santa Fe, NM 87501
You will still need to pay the $50 filing fee (checks should be payable to the “New Mexico Secretary of State”). The Secretary of State will generally take about two weeks to process your dissolution, but the processing times for tax clearance can vary.
What Else Do I Need to Know About Dissolving a Corporation in New Mexico?
As soon as you voluntarily dissolve a corporation in New Mexico, your business name can be claimed by somebody else.
There’s also the issue of administrative dissolutions to discuss. If the state administratively dissolved your corporation, you can reinstate your business by filing the Application for Reinstatement. In order to do this, you will need to ensure that all corporate taxes have been paid.
Conclusion
Dissolving a corporation by the incorporators requires fewer forms and filing fees, but otherwise, the process is generally the same as dissolving a corporation that has already commenced business and issued shares.
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 New Mexico corporation!