Dissolution of S corporation

[oceanlovin'ea]

Client called today and told me to do a dissolution of their S corp. It is a single shareholder. He is going to work for a company and that will pay him more than he can pay himself working for the s corp. She said effective 4/30/09.

First of all, I think that the effective date should be 5/31/09 so that all outstanding bills can be taken care of during May. Am I correct with that thought?

I have to dissolution form to file with the state. But I have never do this before. I see in TTB page 18-17 under corporate liquidations. Is liquidation and dissolution the same thing?

S corp has $390 of assets. I have to go back and look for sure but I think it was some office equipment that they bought in 2006 when they started the business. A little money in the checking account, too.

Is there a good reference material that will show me how to do this? This should be an easy one to learn on.

Thanks.

Linda

[erchess]

Partial Answer

As far as I know all S Corps are dissolved by filing the correct form with someone (usually the Secretary of State) in the state where chartered and in any other states where the S Corp registered as a foreign corp.

It is considered prudent to set the date of dissolution with an eye to the paying of any receivables that may be outstanding.

I think that if an S Corp dissolves effective on a day other than the end of its regular taxable year a short year returns will be due and their deadlines will be the normal amounts of time after dissolution date.

Hope this much helps and hope someone else adds to it or corrects it.

[oceanlovin'ea]

effective date

So if the effective date is 5/31/09, it will be a short year and the tax return will be due by the 15th of the third month after close, which would be 8/15.

Or we can just leave it in an inactive state until December and dissolve it then and do the regular year tax return as a final return.

Is that correct?

Linda

[ChEAr$]

First of all

So if the effective date is 5/31/09, it will be a short year and the tax return will be due by the 15th of the third month after close, which would be 8/15.

Or we can just leave it in an inactive state until December and dissolve it then and do the regular year tax return as a final return.

Is that correct?

Linda

Don't get in a pickle practicing law without a license. IOW, YOU can't dissolve the corporation. You can of course fill in the forms and present to client to mail in to
Tallahassee with check as a do it yourself project.

I would say all states are like Alabama, and if you wait till next year to dissolve it,
there might be the 2010 yearly franchise tax or whatever it's called down theah to pay.
$110 up here is payable even if the corporation is still active on January 1st.

So then, in order:

1. Make sure no corporate debts remain unpaid.
2. then fill out paper work for client to sign and mail in himself
3. Wait till 2010 to file final 1120S and whatever FL needs for income tax.

[oceanlovin'ea]

That is what I meant

I would instruct her where to download forms to fill out and mail in to the state. They should dissolve it as of 12/31/09.

I know I can't do it. Just trying to figure out what the steps would be for them. Also for my bookkeeping of the corporation.

I didn't know if there is something I am supposed to do differently in closing out the corporation.

Linda

[ChEAr$]

To be on the safe side,

Have her do it before 12/31/09. it takes time to process and things get lost you know.

[Uncle Sam]

Dissolution of S Corp

And don't forget to send "Final" forms for payroll taxes, sales taxes, and any other compliance tax form that the entity has been filing - with any registration certificates.

[oceanlovin'ea]

thanks

You all are on the ball. Thanks for all the reminders. I think I will make a check list and put in their file so that I can check off each thing I do.

I talked to her and she is very willing to do as was suggested.

Linda