Dissolving Delaware Entities
Do you have any business entities (LLCs, LP, Corporations, etc.) that you have been debating whether or not to close out? Do you continue paying annual registration fees for companies with no activity? If you answered yes to either of these questions, you should consider taking the steps to close out these entities before the end of the year. While it may be easier just to let the entity “live on”, remember that this entity will continue to cost you in the form of annual registration fees (even though there may be no business activity).
For those who’ve decided to dissolve an entity, you will be glad to know that it is not a very complicated process. The process consists of a few easy steps:
1.) Go to the Delaware Division of Corporations website and download the correct form for the entity you wish to dissolve.
2.) After downloading the correct form, simply fill in the required information and when that is done have the form notarized by a Notary Public.
3.) Check with the state to make sure you have no outstanding taxes/fees due on the account (i.e. if you haven’t paid the 2010 annual fee, you will need to submit payment with your certificate of cancellation). If there are amounts due, payment must be submitted with the certificate.
4.) In addition to any payments you need to include with the application for step 3, you will also need a payment for the filing fee to dissolve the entity. This fee is approximately $200 depending on the entity (the exact amount needed for the filing is included on the certificate).
After compiling all the required documents and payments, all you have to do is mail the information to the Delaware Division of Corporations. It is very important to note that you should not wait until the last minute to complete this. You must be sure to allow time for the Division of Corporations to receive and process the application for cancellation so that the entity will be canceled by December 31st. If this cancellation deadline isn’t met, another years worth of annual fees will be billed to the entity (even if the entity is “active” for only one day of the year).
If you have any questions or would like more information, please contact:
Andrew Johnson
302-656-6632
AJohnson@CoverRossiter.com