When dissolving a corporation in Ohio, there are certain steps you must follow to avoid issues later on.
In this post, we’ll discuss a few tips to consider when you want to dissolve an Ohio corporation.
Initial Shareholder Obligations
For starters, it is essential that all outstanding claims, liabilities, debts and obligations in the corporation (as well as the shareholders’ rights, claims and ownership interests in the assets of the corporation) are properly resolved. It is also essential that a settlement agreement be reached by all of the shareholders to properly dissolve the corporation and disperse all debts and assets.
Filing the Certificate of Dissolution in Ohio
Once an agreement has been reached to immediately resolve all of the debts and assets of the corporation by the shareholders and directors, the shareholders and directors must agree to deliver a Certificate of Dissolution to the Ohio Secretary of State. This certificate includes the name of the corporation and the effective date of the dissolution.
The shareholders and directors must agree that the corporation shall cease to carry on its business, except and in so far as it may be necessary for the winding up of its business up to the date of the corporation’s dissolution.
When winding up, liquidating, and distributing the corporation’s assets, liabilities, and operations, it is imperative that the shareholders and directors review an accounting of all of the corporation’s assets, liabilities and operations. This should include the time period between the date of previous accounting until the date of dissolution.
Selling Assets, Allocating Profits & Losses
The shareholders and directors, when dissolving and winding up the affairs of the corporation, must sell all of the corporation’s assets and must allocate all profits or losses resulting from such sales to the shareholder’s capital accounts. It is also essential that the shareholders and directors establish reserves as may be reasonably necessary to provide for contingencies or liabilities of the corporation.
The shareholders and directors must also pay all taxes associated with their ownership percentage of the corporation due up to the date of the corporation’s dissolution. The Ohio Secretary of State will not accept the filing of the Certificate of Dissolution without documentation from the Ohio Department of Taxation. The Secretary of State will check and confirm that all taxes have been paid up to the date of the corporation’s dissolution.
Notifying Other Government Agencies
Finally, letters need to be sent to several government agencies, notifying them that the corporation will be cancelling its Articles of Organization with the Ohio Secretary of State (effective of the specified date). The shareholders and directors must send letters to the following government agencies notifying them that the corporation will be dissolving:
a) The Treasurer of the County in which your corporation resides;
b) Ohio Department of Job and Family Services;
c) Ohio Bureau of Workers’ Compensation; and
d) The Ohio Department of Taxation.
Release of Shareholders from Liability
Once the shareholders and directors have reached an agreement and have disbursed and addressed all liabilities, outstanding claims, debts, and obligations in the corporation (as well as their rights, claims and ownership interests in the assets of the corporation), it is essential that a written release be drafted. This release should confirm that the shareholders and directors agree to mutually release each other from any and all claims and liabilities.
Dissolve Ohio Corporation
Need help dissolving an Ohio corporation? Our team at The Law Office of Tom Somos, LLC is here to help you. Feel free to contact our office in Columbus, Ohio for more information.