How to dissolve a corporation in Delaware

What does it cost to dissolve a corporation in Delaware?

Delaware has two costs, and the smaller one is the filing fee. The Certificate of Dissolution filing fee for a corporation starts at around $200 and upconfirm the current amount with the Division of Corporations, as a short-form certificate carries a lower fee. The larger and far more variable cost is the Delaware franchise taxwhich must be paid in full before the state will accept the dissolution.

Corporation fees can differ from LLC fees, and figures change; we confirm the current numbers with the Division of Corporations before we file. See the wider picture on the main corporation guide.

Why the franchise tax must be paid first

Delaware is a genuine tax-gate state for corporations, and it's the defining feature of the process. The Division of Corporations will not file a corporation's Certificate of Dissolution until the franchise tax and any annual report obligations are current and paid in fullincluding the year of dissolution. Delaware corporate franchise tax is calculated by either the authorized-shares method or the assumed-par-value method, and it can be significant, a corporation with a large number of authorized shares can face a meaningful balance.

How do the board and shareholders approve dissolution?

Under the Delaware General Corporation Law, a corporation dissolves in one of two ways: by a board resolution recommending dissolution followed by a majority shareholder voteor by unanimous written consent of all shareholders entitled to vote. In practice the board adopts a resolution and the stockholders then approve it.

Record both actions in writing. Even a single-shareholder corporation completes both. That record supports the Certificate of Dissolution and confirms the dissolution was properly authorized under Delaware law.

How do you dissolve a Delaware corporation, step by step?

1. Board resolution to dissolve. The directors recommend dissolution, recorded in the minutes.
2. Shareholder approval. Shareholders approve by majority vote, or all shareholders sign a written consent.
3. Pay the franchise tax in full. Bring Delaware franchise tax and annual reports current and pay them, including the dissolution year.
4. File the Certificate of Dissolution. Submit it to the Delaware Division of Corporations and pay the fee.
5. File IRS Form 966 within 30 days. The Corporate Dissolution or Liquidation form, filed within 30 days of adopting the resolution or plan.
6. Wind up and file final returns. Notify creditors, settle or provide for debts, distribute any remainder to shareholders, file the final federal return marked final, and close the IRS business account.

What is the Delaware Certificate of Dissolution?

A Delaware corporation files a Certificate of Dissolution with the Delaware Division of Corporations. There is a long-form Certificate of Dissolution and, for corporations meeting the statutory conditions, a short-form version with a lower fee. The certificate names the corporation, states the dissolution date, and confirms the required approvals. It can only be filed once the franchise tax is paid in full. If you are closing a Delaware LLC instead, see how to dissolve an LLC in Delawarewhich files a Certificate of Cancellation on a similar tax-gate model.

IRS Form 966 and final returns

Form 966, “Corporate Dissolution or Liquidation,” is the federal filing unique to corporations closing down. A dissolving Delaware corporation files it with the IRS within 30 days after the board and shareholders adopt the resolution or plan to dissolve. Because that clock runs from the approval, not from your Delaware filing, it is easy to complete the state side and forget the federal one.

A dissolving corporation also files a final federal income tax return with the “final return” box checked, Form 1120 for a C-corp, Form 1120-S for an S-corp. Many Delaware corporations are formed there but operate elsewhere, so also check for a final return and account closures in the state where the corporation actually did business. We cover the federal sequence on the final tax return page.

Your EIN and the IRS account

Here is the step almost everyone misses: the EIN. The IRS does not cancel an EIN. The number is permanent and never reassigned. What you do instead is ask the IRS to close the business account behind it, and the IRS will not close it while final returns are outstanding. Paying Delaware franchise tax gives the IRS no signal at all.

How long does it take in Delaware?

Clearing the franchise tax usually drives the timeline; once it is paid, the Certificate of Dissolution is quick to file, and Delaware offers same-day and 24-hour expedite for an added fee. Form 966 and the IRS account closure run on the federal clock, generally several weeks each and independent of the state filing.

Confirm current fees and expedite options with the Division of Corporations before relying on a date.

Rather have your Delaware corporation closed properly?

We calculate and clear the franchise tax, file the Certificate of Dissolution with the Division of Corporations, make sure Form 966 lands inside its 30-day window, and, if your corporation ever had an EIN, close the IRS business account too. If you're not sure which package is yours, a specialist is on WhatsApp 24/7 and will tell you straight.

This page is general information about dissolving a Delaware corporation, not legal or tax advice. Final-year corporate tax, insolvency, and contested claims can have significant consequences, confirm your specific situation with a qualified attorney or tax professional before you act.