Are you ready to stop doing business with your South Dakota corporation, but you’re not sure how the official dissolution process works?
The state of South Dakota 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 Dakota 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 South Dakota Secretary of State and pay the accompanying filing fee.
- Fulfill all tax obligations with the state of South Dakota, 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 Dakota 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.
If your corporation was dissolved by a resolution of the board of directors, you will need to file the Articles of Dissolution with the South Dakota Secretary of State. This form requires the following information:
- Corporation name
- Corporation business ID
- Date of dissolution authorization
- A statement “that the proposal to dissolve was duly approved by the shareholders in the manner required by the South Dakota Business Corporation Act and by the corporation’s Articles of Incorporation”
- Date of dissolution filing
- Signature of authorized representative
The fee to file the Articles of Dissolution is $10. Checks must be payable to the “Secretary of State.” When you go to mail the form and check, you will need to make sure that you provide the original form and one copy of the form with your filing. Finally, you can send the paperwork and payment to this address:
Secretary of State Office
500 E Capitol Ave
Pierre, SD 57501
Normal dissolution processing takes about 2 business days, or you can pay an additional $50 for same-day processing.
How to Dissolve a South Dakota 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 South Dakota corporation by the incorporators is the same. You will still need to file the Articles of Dissolution with the Secretary of State. This form requires the same information outlined above.
You will also need to pay the $10 filing fee (with checks made payable to the “Secretary of State”) and file the form in duplicate. Finally, you can mail your paperwork and payment to the same address:
Secretary of State Office
500 E Capitol Ave
Pierre, SD 57501
Dissolution processing will take about 2 days for standard filing, or you can get same-day processing for an additional $50.
What Else Do I Need to Know About Dissolving a Corporation in South Dakota?
Whether you voluntarily dissolve your corporation or the state initiates an administrative dissolution, your business name will be available for others to claim as soon as the dissolution has been processed.
South Dakota will administratively dissolve your corporation if it fails to file an annual report within 60 days of a delinquency notice. If this occurs, you will need to file the Application for Reinstatement and pay the $300 filing fee. This document must be accompanied by a Tax Clearance Certificate, which can only be acquired by requesting it by phone from the South Dakota Department of Revenue.
If you prefer not to pay the $300 filing fee, you can also re-register as a new business, though you will lose your corporate history in the state.
Conclusion
Dissolving a South Dakota corporation by the board of directors or by the incorporators requires the exact same process.
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 Dakota corporation!