Legal Steps for Closing a Corporation in Oklahoma
Closing a corporation in Oklahoma involves several legal steps that ensure the process is smooth and compliant with state regulations. Whether the closure is due to financial difficulties, a shift in business strategy, or other reasons, it is crucial to follow the proper procedures to avoid potential legal issues in the future. Below are the essential steps for legally closing a corporation in Oklahoma.
1. Board of Directors Approval
Before taking any actions towards dissolution, the corporation’s board of directors must convene and pass a resolution to dissolve the corporation. This typically requires a formal meeting and a vote, which should be documented in the meeting minutes.
2. Shareholder Approval
Following the board’s approval, the next step is to obtain the consent of the shareholders. Oklahoma law generally requires at least two-thirds of the shareholders to approve the dissolution plan. A meeting should be scheduled, and shareholders should be given proper notice to discuss and vote on the resolution.
3. File Articles of Dissolution
Once the dissolution has been approved by both the board and shareholders, the corporation must file Articles of Dissolution with the Oklahoma Secretary of State. This document officially declares the intent to dissolve the corporation. It must include specific information such as the corporation’s name, the date of dissolution approval, and the reason for dissolution. A filing fee is also required.
4. Notify Creditors
Upon approval of the dissolution, it is essential to notify all creditors of the corporation’s decision to close. This can be achieved through formal written notifications. It is vital to settle any outstanding debts and obligations before the corporation is officially dissolved to avoid personal liability for the corporation’s debts.
5. Wind Up Business Affairs
After notifying creditors, the corporation should begin the winding-up process. This includes liquidating assets, paying off debts, and completing any outstanding contracts. The corporation should also ensure that all tax obligations are settled with the Oklahoma Tax Commission and the Internal Revenue Service (IRS).
6. Final Tax Returns and Compliance
Before completing the dissolution process, the corporation must file final tax returns. This includes both state and federal tax filings. It is advisable to consult with a tax professional to ensure compliance with all tax obligations during the dissolution process.
7. Retain Records
Even after the corporation has been dissolved, it is essential to retain all records for a specific period, generally six years. This includes financial statements, tax returns, and dissolution documents. These records may be necessary for future reference or in case of audits.
8. Confirmation of Dissolution
Once all necessary documents have been filed, and all business activities have been settled, the corporation can confirm its dissolution. The Secretary of State will process the Articles of Dissolution and issue a confirmation, which serves as official proof that the corporation no longer exists.
Closing a corporation in Oklahoma requires careful consideration and adherence to specific legal procedures. By following these steps, business owners can ensure that their corporation is dissolved legally and responsibly, minimizing potential liabilities and complications in the future.