Is it time to close your Washington D.C. corporation, but you’re not sure where to start the process?
Dissolving a corporation is a lengthy but manageable endeavor. And every jurisdiction’s procedure looks a bit different. In this guide, we’ll cover the District-specific components of dissolving your Washington D.C. corporation. In no time, you’ll be on your way to whatever’s next.
The Basics of Dissolving a Washington D.C. 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 Washington D.C. Department of Licensing and Consumer Protection 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 DC Treasurer. 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 Washington D.C. corporation. But before you can truly start the process, you’ll need to answer one important question.
Who’s Dissolving the Washington D.C. 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 Department of Licensing and Consumer Protection. So let’s talk about each.
Dissolving a Washington D.C. corporation by the incorporators or initial board of directors
In some cases, a Washington D.C. 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 by Incorporators and Initial Directors form online. Here’s the information required to complete this document:
- Name of your Washington DC corporation
- Date of incorporation
- Affirmation from the signing officer that:
- None of the corporation’s shares have been issued
- The corporation has not commenced business
- No debts remain unpaid
- Net assets of the corporation remaining have been distributed
- A majority of the incorporators or initial directors have authorized the dissolution
- Effective date for the filing
- Signature of an authorized individual
This form costs $220 to submit. Washington D.C. usually processes this paperwork within 15 business days.
Dissolving a Washington D.C. 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.
After that, the corporation can file a slightly different version of the Articles of Dissolution online. Here’s the information required to complete the document:
- Name of your corporation
- Date of dissolution authorization
- Effective date of the dissolution
- Name and signature of an authorized individual
There is a $220 filing fee for this form. Washington D.C. usually processes this paperwork within 15 business days.
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 District of Columbia 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 apply for reinstatement with the Department of Licensing and Consumer Protection. There’s a hefty $300 reinstatement fee, plus a $100 fee and 5% interest rate for each delinquent report. Please note that this procedure only works for administrative dissolutions; voluntary dissolutions have a different procedure.
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 Washington D.C. business name?
After you dissolve your corporation, your business name immediately becomes available for other businesses to use. That’s why we highly recommend being 100% sure you’re done conducting business before filing any dissolution paperwork.
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 voted to dissolve. Then you can file the Articles of Revocation of Dissolution. Find the full District guidelines for this process here.
What if I want to become an LLC instead of closing my business?
Washington D.C. does not have a statutory provision for converting a corporation into an LLC easily. So if you want to operate as an LLC, you’ll have to fully dissolve your corporation, wind it up, and then start fresh as a brand-new LLC. For more information on starting and running an LLC, check out our guide to starting a Washington D.C. LLC.
Do I have to publish a notice that my corporation is dissolving?
Washington D.C. does not explicitly require you to make a newspaper publication regarding the dissolution of your corporation. That said, it’s highly recommended because doing so helps you dispose of unknown claims in a timely fashion. The only explicit requirement is that you notify your stakeholders in writing.
How can I avoid being dissolved because of a registered agent issue?
In Washington D.C., 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 Statement of Change of Registered Office or Registered Agent form online as soon as possible. There’s a $50 fee for this filing.
As long as you avoid a lapse in your agent coverage, your corporation will stay compliant.
How long do Washington D.C. stakeholders have to lay claim to my corporation’s assets?
When you notify your stakeholders that your corporation is dissolving, you actually get to dictate how long they have to make a claim. That said, you must give them at least 120 days; that’s the District’s minimum. You may provide longer than that if you wish. Find the full guidelines for this process here.
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 Utah Corporation
- Dissolve a Vermont Corporation
- Dissolve a Virginia Corporation
- Dissolve a Washington Corporation
- Dissolve a West Virginia Corporation
- Dissolve a Wisconsin Corporation
- Dissolve a Wyoming Corporation