Terminating a corporation

My lawyer said I have to terminate a corporation that is no longer used. What is involved?

The rules differ by state (both corporate law and state income tax) and the federal income tax rules may differ based on the type of corporation (C corporation or S corporation). You'll need a lawyer's help to file a certificate with the state to dissolve or liquidate the corporation. You will probably also have minutes and a plan of liquidation or termination adopted by all shareholders (even if its just you). Many states require a tax clearance be obtained before the state will accept the filing of the certificate terminating the corporation. Your accountant will also have to file a final income tax return. If any tax is due (example, state minimum tax) that will probably have to be paid. If the corporation owns any asstes they will have to be transferred out to the shareholders as part of the plan of liquidation.