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Merlo, Accountant
Category: Tax
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Experience:  25+ years tax consulting. Specializing in returns for US citizens living abroad
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Dissolve C-Corporation

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I want to dissolve C-Corp. What forms and how to proceed, Corporation is Nevada Corp. and foreign corp. in California How much for the service if you know some tax specialist.

The Corporation must file the IRS Form 966 within 30 days after the adoption of a resolution or plan to dissolve.

Dissolution of a corporation involves the following:

1. Corporate Action - A proposal signed by the Board of Directors to dissolve the corporation and approval of the shareholders.

2. Filing with State - File a statement of intent to dissolve before starting the winding-up process. After that process is completed (i.e., creditors notified of dissolution, bills paid and remaining assets, if any, distributed to shareholders), the corporation files Articles of Dissolution.

3. Notification to Creditors - You must notify all the corporation’s creditors by mail of its dissolution. The notice must give the following information to the creditor:

The Corporation has been dissolved or has filed statement of intent to dissolve; the mailing address to which creditors must send their claim. What information must be included in claims?
The deadline for submitting claims usually is 120 days from the date of the notice. Statement that claims will be barred if not received by deadline.

4. Handling Creditors' Claims - Rejected Claims
You must advise creditors in writing if the corporation rejects their claim. The rejection letter should also state that the rejected claim will be barred by statute unless the creditor commences an action to enforce the claim within the period set by statute. The statutory period is usually 90 days from the date of the rejection letter.

Accepted Claims
Accepted claims that are timely must either be paid or arrangements satisfactory to the creditor must be made for repayment. For example, a creditor may agree to waive the corporation's liability for a debt if a shareholder agrees to repay the obligation.

5. Distribution of Remaining Assets - After payment of claims, the remaining assets may be distributed to shareholders. The corporation will need to file IRS Form 1099-DIV to report distributions to shareholders.

As you can see, the process is quite lengthy and involved. You would be best to seek the help of a tax attorney to make sure that all of the proper requirements have been met. Unfortunately we are not allowed under the terms of this website to offer our personal services, nor can we recommend any one person in particular to go to for services. However, if you can find a local tax attorney in your area, just be certain that he or she is familiar with the processes involved for dissolving a corporation.

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