How to Dissolve a Montana Corporation in 2023

The Basics of Dissolving a Montana 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 Montana 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 Montana Department of Revenue. 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 a Montana corporation. But before you can truly start the process, you’ll need to answer one important question.

Who’s Dissolving the Montana Corporation?

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

Dissolving a Montana corporation by the incorporators or initial board of directors

In some cases, a Montana corporation might decide to dissolve before they really get things 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 will need to take the first paperwork step by filing for tax clearance. You’ll apply for it using Form CR-T online. There’s no filing fee for this certificate. In return, you’ll receive a certificate from the Department or Revenue confirming that you’ve paid all your taxes.

Then you can file the Articles of Dissolution for Profit Corporation form from the state’s website, and submitting it will officially dissolve your business. Here’s the information required to complete this form:

• Name of the corporation
• Date the dissolution was authorized
• Who approved the dissolution: incorporators or directors
• Attached tax clearance certificate
• Signature of an authorized officer from the corporation

The tax clearance certificate usually takes 2 weeks for processing. Then you can expect the Articles of Dissolution to be turned around in 10 business days. It costs $15 to submit (and you can get 24-hour turnaround by paying an additional $20).

Dissolving a Montana corporation by the shareholders

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

Once that approval is obtained, the paperwork process very closely mirrors the one mentioned above. A corporation will first need to obtain a tax clearance certificate (free, but roughly 2-week processing). Then the corporation should file the Articles of Dissolution for Profit Corporation. The information included is almost identical, with the exception that the description of the dissolution vote will be longer (and related to the shareholders instead of the directors and incorporators).

The filing fee is still $15 for the Articles of Dissolution. Montana usually processes it within 10 business days.

All told, the paperwork steps for dissolving a corporation are pretty similar; it’s primarily a matter of filling in the proper information on the form.

What About Administrative Dissolutions?

Sometimes, the state of Montana 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 obtain a tax clearance certificate from the Department of Revenue. Once you have that in hand, you can apply directly with the Secretary of State to get reinstatement. In your drafted application, you’ll need to state your name, the date you were dissolved, confirmation that any grounds for dissolution have been remedied, and that your name is still available.

Along with your application, you’ll include your tax clearance certificate, any delinquent annual reports, and the filing fee of $30 plus at least $30 for each delinquent report.

Please note that you have up to five 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 five-year window is for administrative dissolutions only. Voluntary dissolutions (as discussed above) have a much shorter filing window.

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