What Is Arizona Dissolution?
When a company decides to end its operations, it has to follow certain laws that the state has set. Deciding to close the business isn’t enough. Your company must undergo Arizona dissolution, which formalizes the company’s decision with the state.
Why Does A Company Dissolve?
Why do companies need to dissolve? – Dissolving a company allows it to close the business legally and with the acknowledgment of the state. It will also end the owner’s responsibilities in the future that are related to taxes, debts, and other liabilities.
Who makes the decision to dissolve? – LLCs usually require the members to vote on a resolution. Alternatively, your business may follow the methods under the Arizona LLC Act. Your company can obtain written consent from more than half of the members and include that one or more members will be entitled to receive more than half of the value of the company’s assets that the company will distribute in liquidation.
Meanwhile, corporations can complete Arizona dissolution through voting during a shareholder meeting. The board of directors has to submit an approved proposal to dissolve to the shareholders before the voting date.
How long does it take to dissolve a business?– The length of time may depend on how long it takes for the company to take care of all its responsibilities. Meanwhile, normal processing of the dissolution for LLCs will take 20 days. Corporations require more time. Securing a tax clearance will take around 30 business days, and the processing of the dissolution requires 20 business days.
What Happens If Your Company Does Not Formally Dissolve?
Failure to comply with the Arizona dissolution process has consequences. If your company doesn’t dissolve formally, it will still have responsibilities and obligations with the state. Thus, your company will remain responsible for all the recurring penalties and fees.
Steps To Dissolve Your Business
If you wish to dissolve your business entity voluntarily, you should follow the process in the state of Arizona.
1. File Articles of Dissolution with the state – LLCs will have to use Form LL 0020 Articles of Termination. Submit a cover sheet along with the form to the Arizona Corporation Commission. You can download the documents from the website of the Arizona Corporation Commission.
Corporations need to fill out Form CF 0030 Articles of Dissolution and file them to the Arizona Corporation Commission. You can download the form through their website.
Additionally, corporations have to publish a copy of the Articles of Dissolution within 60 days after the Arizona Corporation Commission’s approval. It should appear several times in a newspaper.
2. Remove all liabilities and obligations – Proceed with the winding up process and collect all your company’s assets. You will need to dispose of its properties that you won’t distribute in kind, and remove all its liabilities or make provisions on how to do it. You will also need to distribute remaining properties according to interests.
3. Give notice to any claimants – Doing this will limit your liabilities and allow you to distribute properties safely. Inform creditors where they can send their claims and until when. The period of sending claims shouldn’t be less than 120 days from the date of the notice.
4. Tax clearance – If your business entity is an LLC, you don’t have to get a tax clearance. But, if your company is a corporation, you will have to request a Certificate of Compliance from the Department of Revenue. You can do this by completing the Tax Clearance Application form.
5. Close all bank accounts, credit lines, permits, and licenses – Use the company’s funds to settle all obligations. Then, close all bank accounts and credit lines since you won’t be able to use them anyway. You should also cancel all permits and licenses to avoid possible issues in the future.
How DoMyLLC can assist with streamlining the process
Dissolving your company requires you to follow multiple steps properly. If you need guidance in going through the Arizona dissolution process, don’t hesitate to check our services out. We offer personalized solutions. You can also get live support from our team. Contact DoMyLLC now to help you formally close your business entity in Arizona.
Arizona Dissolution FAQs
Is There A Filing Fee To Dissolve The Business?
LLCs have to pay for the $35 filing fee for the Articles of termination. Corporations, on the other hand, need to pay $25. Companies that wish to expedite the process must pay an additional $35.
Do You Need The Department Of Revenue Clearance Before The Secretary Of State Will Accept Your Dissolution?
LLCs don’t need to secure tax clearance. Meanwhile, corporations have to get a Certificate of Compliance from the Department of Revenue.
How Long Does The State Take To Process The Dissolution?
Once the company has submitted the documents to the Arizona Corporation Commission, the corporation will have to wait for 20 business days for normal processing. LLCs need to wait for 20 days. Expedited processing usually takes 7-10 days for LLCs and 4-5 business days for corporations but the state posts current processing times on their website.
When Can Another Business Use Your Company Name?
If you have dissolved voluntarily, your name will be available immediately for another entity to use. The business names of those that the Arizona Corporation Commission dissolved administratively will be safe for 6 months.