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You can mail or electronically file Form 966. You must register for an account on the IRS website in order to submit online. If filing by mail, the corporation must mail its completed form to the IRS Service Center along with its income tax return.
Dissolution is the end of the legal existence of a corporation. It usually occurs after liquidation, which is the process of paying debts and distributing assets. There are several methods by which a corporation may be dissolved. The first is voluntary dissolution, which is an elective decision to dissolve the entity.
The first step in dissolving a corporation usually involves having your board of directors vote and adopt a resolution to dissolve the corporation. Generally, you start the dissolution process by holding a meeting of the board of directors to vote on a resolution to approve the dissolution of the corporation.
How To Complete Form 966: A Step-by-Step Guide Step 1: Obtain the form. Step 2: Provide basic information. Step 3: Choose the applicable election. Step 4: Provide shareholder details. Step 5: Sign and date the form. Step 6: Retain a copy. Step 7: Submit the form.
Asset Liquidation: When a corporation decides to sell off its assets and distribute the proceeds among shareholders or stakeholders, Form 966 is required. This is common in mergers, acquisitions, or when a corporation chooses to distribute its assets before dissolving.
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If Form 966 is not filed within 30 days after the adoption of a resolution or plan to dissolve or liquidate, the IRS may impose penalties for late filing. The penalty amount may vary depending on the size of the corporation or LLC.
Updated November 3, 2020: A certified copy of a resolution to dissolve a corporation is an important document to maintain when it comes time to dissolve a company. This form is required by the IRS along with Form 966.
How to Dissolve a Corporation in California Step 1: Shareholders Vote to Dissolve the Corporation. Step 2: Prepare and File a Certificate of Election. Step 3: Board of Directors Provides Written Notice of Corporations Dissolution. Step 4: Pay Taxes, Settle Debts, and Distribute Remaining Assets to Shareholders.