How to dissolve a corporation in New York

What does it cost to dissolve a corporation in New York?

There are two costs to a New York corporate dissolution. The visible one is the Department of State filing fee for the Certificate of Dissolution, which is around $60confirm the current figure, because corporation fees can differ from LLC fees. The less visible one is getting the corporation's franchise tax current, because New York will not let you dissolve until its Tax Department consents, and it only consents when returns are filed and balances paid.

So the real spend depends less on the filing fee than on any back franchise tax the corporation has accumulated while it sat unused. A corporation that stopped operating but never dissolved has typically kept owing New York franchise tax and the duty to file returns, that is the balance the consent step surfaces.

Fees and rules change; we confirm the current numbers with the Department of State and Tax Department before we file. See the wider picture on the main corporation guide.

Why does Tax Department consent come first in New York?

New York is a genuine tax-clearance state for corporations, and it's the defining feature of the process. Before the Department of State will file a business corporation's Certificate of Dissolution, the corporation must obtain written consent to dissolution from the New York State Department of Taxation and Finance. You request that consent with Form TR-960.

The Tax Department reviews whether the corporation's franchise tax returns are filed and its balances paid. When everything is current, it issues the consent, which you then submit with the Certificate of Dissolution. This is the step that most distinguishes a New York corporate dissolution from an LLC dissolutionwhere no such consent is required. Read the detail on how the TR-960 consent works.

How do the board and shareholders approve dissolution?

A New York corporation dissolves through its governance structure in two moves. First, the board of directors adopts a resolution recommending dissolution. Second, the shareholders approve it, generally a majority of the outstanding shares entitled to vote, though older corporations and certain articles can require more.

Record both the board resolution and the shareholder approval in writing. Even if you are the sole director and sole shareholder, both approvals still apply, both in writing. That record is what supports the Certificate of Dissolution and the tax consent request, the state expects the dissolution to have been properly authorized before it ends the entity.

How do you dissolve a New York corporation, step by step?

1. Board resolution to dissolve. The directors recommend dissolution, recorded in the minutes.
2. Shareholder approval. Shareholders vote to approve, generally by a majority of shares, recorded in writing.
3. Get the franchise tax current and request consent. File any outstanding New York franchise tax returns, pay balances, and file Form TR-960 to obtain the Tax Department's written consent to dissolution.
4. File the Certificate of Dissolution. Submit the Certificate of Dissolution to the Department of State with the tax consent, and pay the filing 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, and file the final federal and state returns marked final, then close the IRS business account.

What is the New York Certificate of Dissolution?

A New York business corporation files a Certificate of Dissolution under Section 1003 of the Business Corporation Law with the Department of State. It names the corporation, its date of incorporation, the manner in which the dissolution was authorized, and it is submitted together with the Tax Department's consent. There is a filing fee of around $60, confirm the current amount.

This is a different document from the Articles of Dissolution an LLC files, and it cannot be filed at all until the consent step is complete. The full field-by-field detail is on the NYS Certificate of Dissolution page.

IRS Form 966 and final returns

Form 966, “Corporate Dissolution or Liquidation,” is the federal filing unique to corporations closing down. A dissolving New York 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 state filing, it is easy to complete the New York 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, plus its final New York franchise tax return. We cover the whole 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, a short letter with the corporation's exact legal name, EIN, address and reason, and the IRS will not close it while final returns are outstanding. New York's Tax Department consent covers state franchise tax; it gives the IRS no signal at all.

How long does it take in New York?

The Tax Department consent step usually drives the timeline. Getting franchise tax returns current and receiving the written consent can take several weeks, longer if there are back returns to file. Once the consent is in hand, preparing and filing the Certificate of Dissolution is quick, though Department of State processing times vary with their queue. Form 966 and the IRS account closure run on the federal clock, generally several weeks each and independent of the state filing.

Confirm current consent and processing times with the Tax Department and Department of State before relying on a date.

Rather have your New York corporation closed properly?

We get the franchise tax current, obtain the Tax Department's consent via Form TR-960, file the Certificate of Dissolution with the Department of State, 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 New York 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.