How to Dissolve a North Dakota Corporation in 2023

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

Who’s Dissolving the North Dakota 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 affects how you file with the Secretary of State. So let’s talk about each.

Dissolving a North Dakota corporation by the incorporators or initial board of directors

In some cases, a North Dakota 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 can file the Articles of Dissolution Prior to Issuance of Shares form online. Here’s the information required to complete this document:

• Name of corporation
• Date of incorporation
• Federal ID number
• Signatures of directors/incorporators
• Contact information
• Credit card information (if applicable)

This form costs $20 to submit. On average, dissolution paperwork can take as much as 30 days to process, but since North Dakota has recently transitioned to online filing, it should take less time.

Dissolving a North Dakota corporation by the shareholders

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

After the vote is obtained, it’ll be time to file the paperwork, both of which can be filed online. You’ll start out by filing a new form, the Corporation Intent to Dissolve. This form essentially alerts the state to your dissolution plans. Here’s the information required for this form:

• Name of corporation
• Federal ID number
• Method of dissolution authorization
• Signature of authorized representative
• Contact information
• Credit card information (if applicable)

There is a $10 fee for this form. After it’s filed, you can file the Articles of Dissolution. Here’s the information required for this document:

• Name of corporation
• Federal ID number
• Effective date of dissolution
• Affirmation that the notice of intent to dissolve has been filed
• Signature of authorized representative
• Contact information
• Credit card information (if applicable)

The Articles of Dissolution costs $20 to file. You can expect processing to take up to 30 days in peak filing times. If you want to streamline your filing process, avoid filing when annual reports are due.

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

What About Administrative Dissolutions?

Sometimes, the state of North Dakota 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 file an application for reinstatement online. There’s a $135 fee for this reinstatement, plus any fees for delinquent reports. You have up to a year to make this application for reinstatement.

Important note: the one-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.