Are you ready to stop doing business with your Utah corporation, but you’re not sure how the official dissolution process works?
The state of Utah 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 Utah 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.
- Fill out and file the Articles of Dissolution with the Utah Division of Corporations and Commercial Code.
- Fulfill all tax obligations with the state of Utah, 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 Utah 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 Utah, you’ll need to fill out and file a document known as the Articles of Dissolution (After Issuance of Shares). This form requires the following information:
- Entity Number
- Whether your corporation is profit or nonprofit
- Name of your corporation
- Address where process can be served
- Date the dissolution was authorized
- Number of votes for and against dissolution or the number of votes cast for dissolution by each voting group
- Signature and title of an individual authorized to file the form
- Date
There is no filing fee for this document unless you choose to expedite your filing. In that case, you’d need to pay the $75 expediting fee (make your check payable to the “State of Utah”). Then send your form (with or without payment) to the following address:
Utah Division of Corporations & Commercial Code
PO Box 146705
Salt Lake City Utah 84114-6705
Under typical circumstances, you can expect the state of Utah to process your dissolution filing within 5-7 business days of receiving it. Expedited filings are processed within 48 hours.
How to Dissolve a Utah 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 this circumstance, the incorporator will need to fill out and file the Application of Dissolution (Prior to Issuance of Shares). This form requires less specific info than the Form DIS, as it only includes the following:
- Entity number
- Name of your Utah corporation
- Affirmation that your corporation has not issued shares
- Date the dissolution was authorized
- Street address where process can be served
- Signature and title of an individual authorized to file the application
Just like the above form, there is no fee for this application unless you choose to expedite. Your form (and payment if applicable) go to the same address:
Utah Division of Corporations & Commercial Code
PO Box 146705
Salt Lake City Utah 84114-6705
Finally, the Articles of Dissolution (Form IPD) has the same 5-7 business day turnaround.
What Else Do I Need to Know About Dissolving a Corporation in Utah?
After your dissolution is complete, the state of Utah keeps your name on reserve for 120 days. After that, any business that wishes to use your name may do so. This is one of the reasons that you should never dissolve a corporation until you’re absolutely certain that you will no longer conduct business in this state.
There’s also the issue of administrative dissolutions to discuss. This is when the state dissolves your corporation without you requesting that they do so. In Utah, if you fail to file your annual report on time, your corporation is marked as “delinquent.” Delinquent corporations have thirty days to correct this status before the state administratively dissolves your corporation. If you find yourself in this position, the state protects your business name for two years.
That two-year period grants you the opportunity to reinstate your corporation. Voluntarily dissolved corporations can apply for reinstatement, too. You can find the forms for reinstatement here as well as additional information. There is a $70 fee, and you must apply within the two years following the dissolution.
All told, the administrative dissolution and reinstatement process can be a burden for a corporation, and it’s best to avoid this situation altogether.
Conclusion
The process to dissolve a Utah corporation that has not distributed shares or transacted business is very simple, but if you have completed either of those steps, the process is 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 Utah corporation!