Are you ready to stop doing business with your South Carolina corporation, but you’re not sure how the official dissolution process works?
The state of South Carolina 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 South Carolina 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.
- Complete the Articles of Dissolution and file the form with the South Carolina Secretary of State.
- Fulfill all tax obligations with the state of South Carolina, 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 South Carolina 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 South Carolina, you’ll need to file a document known as the Articles of Dissolution with the Secretary of State’s office. This form requires the following information:
- Name of corporation
- Date of incorporation
- Agent’s name and address
- Names and addresses of corporate directors
- Names and addresses of corporate officers
- Date of dissolution authorization
- Effective date of dissolution
- Method of dissolution authorization
- Date of dissolution filing
- Signature of corporate officer/director
In addition to the Articles of Dissolution, you will need to include a $10 check payable to the Secretary of State at the time of your filing. Once you have provided all of the necessary information, you can either mail or deliver the form (in duplicate) and check to this address:
SC Secretary of State
Attn: Corporate Filings
1205 Pendleton Street, Suite 525
Columbia, SC 29201
Generally, the Secretary of State can process a corporate dissolution in about two business days.
How to Dissolve a South Carolina 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.
Just like corporations dissolved by the board of directors, corporations that have not commenced business or issued shares must file the Articles of Dissolution in order to dissolve. However, you will need to fill out the form a little differently by providing the following additional information:
- Date of incorporation
- Affirmation that the corporation has either not commenced business OR not issued shares
You will still need to include a $10 check payable to the current Secretary of State, in addition to the Articles of Dissolution form in duplicate (one original and one copy). You can also mail or deliver your paperwork to the same address:
SC Secretary of State
Attn: Corporate Filings
1205 Pendleton Street, Suite 525
Columbia, SC 29201
Generally, the Secretary of State can process a corporate dissolution in about two business days.
What Else Do I Need to Know About Dissolving a Corporation in South Carolina?
In South Carolina, the state will protect the business name of a voluntarily dissolved corporation for 120 days following the dissolution. However, if your corporation was administratively dissolved, your business name will be protected for up to 2 years. An administrative dissolution can occur if your corporation ceases to conduct business without filing the necessary tax and dissolution paperwork.
It is also important to note that, if your corporation has been administratively dissolved, you must provide a Tax Compliance Certificate before you can dissolve your corporation properly. Additionally, if you wish to reinstate an administratively dissolved corporation, you must pay any taxes owed and file the Application for Reinstatement form with the Secretary of State.
Conclusion
The process to dissolve a South Carolina corporation is virtually the same whether or not your business has commenced business or 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 South Carolina corporation!