Voluntary dissolution of a New York corporation

From the New York State Department of Taxation and Finance:

A New York State business corporation may voluntarily dissolve. By doing so, the corporation ends its obligation to pay future taxes and fees to New York State. The dissolution process involves both the Tax Department and the New York Department of State.

The procedures for Voluntary dissolution of New York State not-for-profit corporations are different.

Background

New York business corporations must pay franchise and other taxes to New York State. The corporation pays the taxes in exchange for the privilege of exercising its corporate franchise, doing business, employing capital, owning or leasing property, or maintaining an office in the state.

When a New York business corporation decides it will no longer conduct business in New York, it will want to be sure that it ends its obligation to pay state taxes and fees. The process of voluntary dissolution:

• brings the existence of the corporation to an end; and
• ends the corporation’s obligation to pay future state taxes and fees to New York State.

Dissolution by proclamation

If a New York corporation doesn’t voluntarily dissolve and doesn’t file franchise tax returns or pay franchise taxes for two or more years, the New York Secretary of State may dissolve the corporation by proclamation.

• With dissolution by proclamation and voluntary dissolution, the legal entity of the corporation ceases to exist. The important difference is that dissolution by proclamation occurs without a request by the corporation.
• A corporation dissolved by proclamation must continue to file returns and pay taxes or fees until they:
  1. Have the corporation reinstated
  2. Complete the voluntary dissolution process described below

Procedure for voluntary dissolution

Voluntary dissolution is a two-step process:

• Obtaining written consent from the Tax Department (which will check to see if the corporation owes back taxes and if it has filed all its returns); and
• Filing paperwork with the New York Department of State, including a Certificate of Dissolution.

1. How to get consent from the Tax Department:
• File a final corporation tax return. Use the form you normally use, but mark an X in the box marked Final at the top of the return.
• You may also choose to e-file your final return. You must use e-file software that’s been approved by the Tax Department.
• If the current tax year form is available, you must file using that year’s tax form. If the current year’s form is not yet available, taxpayers may file a short period report using the prior year’s form. The computation of the tax on the final return needs to take into account any tax law changes that are effective for that final tax year. Payment of the tax must be submitted in conjunction with such report.
• Mail your returns and payments to the appropriate address (see list below).
• When we receive the final return, we’ll check to see if the corporation is up-to-date with its returns and taxes. This includes any taxes and returns due for any part of a year in which the corporation was in existence.
• If your corporation has filed all its returns and paid all its taxes, we’ll issue a written consent to dissolve the corporation.
• If not, we’ll send you a letter telling you what you need to do before we can give our consent. 
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2. How to create a Certificate of Dissolution
   • The Department of State has blank certificates, as well as detailed instructions on how to complete and file them. 
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3. Complete the process by filing with the New York Department of StateOnce you’ve obtained our consent and prepared the Certificate of Dissolution, you’re ready to file with the Department of State. Your filing must include:
   • written consent from the Tax Department (Form TR-960, Consent to Dissolution of a Corporation);
   • one Certificate of Dissolution; and
   • a check for $60 payable to the New York Department of State.

You may file in person or by mailing to:

NEW YORK DEPARTMENT OF STATE
DIVISION OF CORPORATIONS
ONE COMMERCE PLAZA
99 WASHINGTON AVE
ALBANY NY 12231

Once the Department of State accepts the Certificate of Dissolution for filing, they’ll issue your corporation a filing receipt. The filing receipt establishes the date that the corporation’s existence comes to an end.