How to Dissolve an Arkansas Corporation in 2023

The Basics of Dissolving an Arkansas Corporation

In general, every dissolution follows the same basic structure, with 5 basic steps. There are, of course, a lot more “nuts and bolts” to the process (read more about them here), but for now, let’s get a bird’s eye view:

• Vote to dissolve the corporation: Corporations are not solo endeavors, and ending them isn’t one individual’s call. First, your board will need to convene and vote on a motion to dissolve the corporation. After that, some corporations will need to have their shareholders vote for the dissolution as well (depending on the corporation’s bylaws).
• File the dissolution paperwork: Once your corporation’s members have decided to dissolve, you’ll reach out to the Arkansas Secretary of State and fill out the appropriate Articles of Dissolution.
• Fulfill your tax obligations: Your corporation will need to pay any taxes due to the IRS and the Arkansas Department of Finance and Administration. This can be a multi-step process as you liquidate assets and pay any creditors.
• Cancel licenses and close accounts: If your corporation maintains any licenses or permits, this is the time to cancel them so you aren’t charged renewal fees. You should also close down accounts with vendors and your bank (once your financial affairs are settled).
• Notify your stakeholders: A dissolving corporation must settle any financial debts, liquidate its assets, and distribute the appropriate funds to its shareholders. Stakeholders must be notified so they can lay claim to their share in a timely fashion.

That’s the gist of dissolving an Arkansas corporation. But before you can truly start the process, you’ll need to answer one important question.

Who’s Dissolving the Arkansas Corporation?

Two key groups can dissolve a corporation: the original incorporators and the initial board of directors or the shareholders. The group initiating the dissolution affects how you file with the Secretary of State. So let’s talk about each.

Dissolving an Arkansas corporation by the incorporators or initial board of directors

In some cases, an Arkansas corporation might decide to dissolve before things really get up and running. More specifically, if the corporation hasn’t issued stock or conducted any business yet, then the incorporators or initial directors will be the ones who vote to dissolve the corporation.

Once the dissolution vote passes, the corporation can file the Articles of Dissolution form. Here’s the information required to complete this form:

• Name of the corporation
• Date the dissolution was authorized
• Date and signature of authorized officer

There is a section to describe a shareholder vote, but corporations in this earlier stage won’t need to fill that part in. This form can also be filed online; if you file electronically, the $50 fee drops by $5. Most filings are processed within 4-7 business days.

Dissolving an Arkansas corporation by the shareholders

In a corporation that has issued shares, the dissolution process looks a tad different. In most cases, the board votes for a motion to dissolve the corporation. Then that motion is brought before the shareholders for approval.

Once that approval is obtained, it’s time to file the Articles of Dissolution (linked above). Here is the information you’ll need to include on the form:

• Name of the corporation
• Date the dissolution was authorized
• Description of the shareholders’ vote, including votes for and against
• Attachment describing different voting groups (if applicable)
• Date
• Signature of authorized officer

The filing fee for this document is $45 if you file online and $50 by mail. Processing speeds range between 4-7 business days.

What About Administrative Dissolutions?

Sometimes, the state of Arkansas may force a corporation to dissolve against its will. Usually, this happens because a corporation hasn’t filed its annual report, paid its taxes, maintained its registered agent, renewed appropriate licensure, or some other clerical error. A corporation may also be dissolved for any activities that are ruled fraudulent or otherwise harmful to the public.

In most cases, these corporations can be restored and resume business. The process can be quite a hassle, but it is manageable. First, a corporation must resolve whatever issue caused its dissolution. A corporation with defunct annual reports, for example, would need to submit the reports and pay any missing fees (plus late fees).

After that, you’ll need to submit an appeal to the Secretary of State. This original document (written by you) should identify your corporation, state when it was dissolved, confirm that the cause of the dissolution has been rectified, and provide a certificate that all tax obligations have been paid. Once this letter is approved, the Secretary of State will issue your corporation a Certificate of Reinstatement.

Please note that you only have two years after your corporation is administratively dissolved to get reinstated. After that point, you would have to create a new corporation entirely. Important note: the two-year window is for administrative dissolutions only. Voluntary dissolutions (as discussed above) have a shorter filing window.

It’s far easier to avoid dissolution entirely; remain compliant with your corporation, and you can skip this step completely.