How to Close a Corporation: 6 Corporate Acts Before the State Accepts the Dissolution

A corporation does not close when its owners decide it should. It closes when the Secretary of State files a certificate saying so, and in both New York and Delaware that filing waits on acts the corporation must complete first: a vote counted the right way, a tax authority satisfied, a document that recites how the decision was made.

The six acts below are the corporate ones. Final payroll, final returns and the IRS account are a separate sequence with its own page; here the subject is the corporation as a creature of state law, and the order in which it must speak before the state will let it stop.

1. In Delaware the Board Speaks First

Delaware's section 275 begins with the directors. The board adopts a resolution to dissolve, and the question then goes to the stockholders. There is an alternative. Dissolution may instead be authorized if "all the stockholders entitled to vote thereon shall consent in writing," which for a closely held company with two or three owners is often the simpler document to produce.

Minutes of that board meeting should exist on paper.

2. The Shareholder Vote Is Counted Against All Outstanding Shares

New York's Business Corporation Law section 1001 places the decision at a meeting of shareholders, and the threshold depends on the corporation's age and its certificate. Newer corporations, and those whose certificates so provide, need "a majority of the votes of all outstanding shares entitled to vote thereon." Older corporations need "two-thirds of the votes of all outstanding shares entitled to vote thereon," unless the certificate has been amended to set a lower proportion, never below a majority.

Delaware's stockholder standard, when the unanimous written consent route is not used, is "a majority of the outstanding stock of the corporation entitled to vote thereon."

The word that does the work in both statutes is outstanding. A vote is not measured against the shareholders who attended the meeting, or the ones who answered the email, but against every voting share in existence, which means that a corporation with a founder who left years ago still holding a block of stock, and no current address for him, faces a problem that begins long before the certificate and that no amount of agreement among the remaining owners can cure, because their agreement, however unanimous among themselves, is counted against a denominator that includes the absent man's shares.

The certificate of incorporation and the stock ledger answer which rule applies. Counsel should read both.

3. A Federal Return Follows the Resolution Within 30 Days

Once the resolution or plan is adopted, the Internal Revenue Code's section 6043(a) asks for a return within 30 days, filed on Form 966. It is the one federal document that belongs among the corporate acts, because its trigger is the vote rather than the tax year.

4. The Tax Authorities Must Agree to Let the Corporation Go

This is the act that decides timing, and the one an owner controls least.

In New York, section 1004 states that the Department of State "shall not file" the certificate of dissolution "unless the consent of the state department of taxation and finance to the dissolution is attached thereto." A corporation with New York City business activity and tax liability also needs "the consent of the commissioner of finance of the city of New York." The state consent is requested from the Tax Department (the Department of State's page lists an automated line and a fax number for the request); the city consent comes from the Department of Finance's Vendor/Tax Clearance Unit at 59 Maiden Lane. The Tax Department reviews for unfiled returns and unpaid taxes before granting consent, and no statute read for this page promises how long that review takes.

Delaware reaches the same place by a different road. Section 277 provides that no corporation shall be dissolved until all franchise taxes due, including those for the entire calendar month in which dissolution becomes effective, have been paid, and until all annual franchise tax reports, including a final one for the year of dissolution, have been filed.

A corporation behind on state taxes, then, cannot finish closing by filing more carefully. It finishes by paying, or by arranging to.

By the time consent arrives, the corporation's bank account may be the last thing still open in its name.

5. The Certificate Recites How the Decision Was Made

New York's certificate of dissolution, under section 1003, states the corporation's name (and original name), the date its certificate of incorporation was filed, "the name and address of each of its officers and directors," "that the corporation elects to dissolve," and "the manner in which the dissolution was authorized." The consent from step four is attached. As of September 2026 the Department of State listed a $60 filing fee, with optional expedited handling at $25 for 24 hours, $75 for same day and $150 for two hours, and it warns filers not to mail the certificate and fee to the Tax Department. On filing, "the corporation is dissolved."

Delaware's certificate, filed with the Secretary of State under section 275, states the name, the date dissolution was authorized, the manner of authorization, and the names and addresses of directors and officers. The fee schedule revised August 1, 2026 lists $224 for a stock corporation's dissolution, plus the taxes required to dissolve, with 24-hour ($100) and same-day ($200) expedite options.

6. Dissolution Opens the Winding Up Rather Than Ending It

A dissolved corporation still has work to do: collecting what it is owed, paying what it owes, and deciding whether to set a deadline for claims. New York's section 1007 lets a dissolved corporation publish a notice requiring claims by a date at least six months after first publication; Delaware's sections 280 through 282 offer a shorter procedure with court-supervised security for contingent claims and a cap on each stockholder's exposure. Both are optional, both apply to the corporation rather than to anyone who signed a personal guaranty, and New York's excepts tax and government claims.

Unpaid Debts at the Filing Date

A corporation that cannot pay its creditors can still be dissolved, but its directors and shareholders should take legal advice before any distribution. Delancey Street is a settlement company for commercial debt, merchant cash advances chief among it, and is not a law firm; its free and confidential review addresses those balances, including ones the owners guaranteed, and it works with independently licensed counsel on legal questions. No creditor is bound to accept a settlement, and a corporation with many creditors and contested assets may need bankruptcy counsel instead.

The certificate itself is brief. Everything on it is a record of something the corporation already did.