Is it time to close your Utah corporation, but you’re not sure where to start the process?
Dissolving a corporation is a lengthy but manageable endeavor. And every state’s procedure looks a bit different. In this guide, we’ll cover the state-specific components of dissolving your Utah corporation. In no time, you’ll be on your way to whatever’s next.
The Basics of Dissolving a Utah 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 Utah Division of Corporations 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 Utah 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 Utah corporation. But before you can truly start the process, you’ll need to answer one important question.
Who’s Dissolving the Utah 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 Division of Corporations. So let’s talk about each.
Dissolving a Utah corporation by the incorporators or initial board of directors
In some cases, a Utah 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. Here’s the information required to complete this document:
- Entity number
- Name of the corporation
- Date the dissolution
- Address of the principal office
- Name, signature, and title of an authorized officer
This form doesn’t have a filing fee unless you choose to expedite it (for $75). Utah usually processes standard filings within 5-7 business days.
Dissolving a Utah corporation by the shareholders
In a corporation that has issued shares, the dissolution process looks a little 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, it’s time to file the Articles of Dissolution (After Issuance of Shares) form. Here’s the information required to complete the document:
- Entity number for the corporation
- Confirmation that the corporation is a profit corporation
- Name of the corporation
- Address of the principal office
- Date the dissolution was authorized
- Description of the dissolution vote
- Name, title, and signature of an authorized officer
There is no filing fee for this document unless you choose to expedite for $75. Utah usually processes this paperwork within 5-7 business days.
What About Administrative Dissolutions?
Sometimes, the state of Utah 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).
Corporations are one of the only entity types that cannot file for reinstatement online. That’s because you have to start out by requesting for tax clearance from the Department of Revenue. Once you have it, you’ll be able to start the paperwork steps for reinstatement. The base fee for filing with the Division of Corporations costs $54, plus any delinquent fees.
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.
Frequently Asked Questions
What happens to my Utah business name?
After you dissolve your corporation, Utah briefly protects your business name. For a voluntary dissolution, this name protection lasts for 120 days. Administrative dissolutions have name protection for up to 2 years. After those time periods, your name will become available again for other businesses to use.
Can I change my mind and go back into business?
Yes, but you can’t dawdle. If you voluntarily dissolved your corporation, you have just 120 days to go back into business. To do that, you’ll need approval from whichever group originally approved the dissolution. Then you can draft and file a revocation of your dissolution (include the information listed here) along with a copy of your Articles of Dissolution.
What if I want to become an LLC instead of closing my business?
Utah allows corporations to convert into an LLC if they choose. Of course, you’ll need to vote to convert. Once you have, you can file the Articles of Conversion along with the Certificate of Organization, paying the accompanying fees of $37 and $54 respectively. For more information on starting and running an LLC, check out our guide to starting a Utah LLC.
Do I have to publish a notice that my corporation is dissolving?
In Utah, a newspaper publication isn’t required, but it’s highly recommended. Publishing a notice in a general circulation newspaper in the county where your office is located greatly streamlines the process of dismissing claims. This notice is your best way to notify any stakeholders that you might not be aware of.
How can I avoid being dissolved because of a registered agent issue?
In Utah, you can be administratively dissolved if you let your registered agent coverage lapse. Thankfully, you can avoid this problem easily. If you’ve picked a new agent or your old agent has resigned, simply file the Registration Information Change form as soon as possible. There’s a $15 fee. If your agent resigns, their resignation isn’t effective until 31 days later, giving you plenty of time to appoint a new one.
As long as you avoid a lapse in your agent coverage, your corporation will stay compliant.
How long do Utah stakeholders have to lay claim to my corporation’s assets?
The state has slightly different requirements for known claims and unknown claims against your corporation. The statute for unknown claims is 5-7 years depending on whether you published a newspaper notification. Unknown claims aren’t extremely likely, but you should be aware that this statute could affect your corporation.
Meanwhile, for known claims, you actually get to set out how long your stakeholders have to come forward when you notify them in writing. That said, Utah requires you to give them a minimum of 120 days (starting with the date you send the notice) to make a claim. For more information on this process, check out the state’s Dissolution Articles.
Dissolve a Corporation in all States
We break down the corporation dissolution process in every state. View all of our guides below.
- Dissolve an Alabama Corporation
- Dissolve an Alaska Corporation
- Dissolve an Arizona Corporation
- Dissolve an Arkansas Corporation
- Dissolve a California Corporation
- Dissolve a Colorado Corporation
- Dissolve a Connecticut Corporation
- Dissolve a Delaware Corporation
- Dissolve a Florida Corporation
- Dissolve a Georgia Corporation
- Dissolve a Hawaii Corporation
- Dissolve an Idaho Corporation
- Dissolve an Illinois Corporation
- Dissolve an Indiana Corporation
- Dissolve an Iowa Corporation
- Dissolve a Kansas Corporation
- Dissolve a Kentucky Corporation
- Dissolve a Louisiana Corporation
- Dissolve a Maine Corporation
- Dissolve a Maryland Corporation
- Dissolve a Massachusetts Corporation
- Dissolve a Michigan Corporation
- Dissolve a Minnesota Corporation
- Dissolve a Mississippi Corporation
- Dissolve a Missouri Corporation
- Dissolve a Montana Corporation
- Dissolve a Nebraska Corporation
- Dissolve a Nevada Corporation
- Dissolve a New Hampshire Corporation
- Dissolve a New Jersey Corporation
- Dissolve a New Mexico Corporation
- Dissolve a New York Corporation
- Dissolve a North Carolina Corporation
- Dissolve a North Dakota Corporation
- Dissolve an Ohio Corporation
- Dissolve an Oklahoma Corporation
- Dissolve an Oregon Corporation
- Dissolve a Pennsylvania Corporation
- Dissolve a Rhode Island Corporation
- Dissolve a South Carolina Corporation
- Dissolve a South Dakota Corporation
- Dissolve a Tennessee Corporation
- Dissolve a Texas Corporation
- Dissolve a Vermont Corporation
- Dissolve a Virginia Corporation
- Dissolve a Washington Corporation
- Dissolve a Washington D.C. Corporation
- Dissolve a West Virginia Corporation
- Dissolve a Wisconsin Corporation
- Dissolve a Wyoming Corporation