To dissolve an Arkansas corporation, you file Articles of Dissolution with the Arkansas Secretary of State after the board and shareholders have approved the wind-down. The filing fee is $45 online or $50 on paper, and the form itself is short. The larger job sits on either side of that filing: getting the vote right beforehand, and notifying creditors, closing out taxes, and distributing what’s left afterward. Skip those pieces and directors can end up personally exposed.
Approving the Dissolution
The board of directors starts the process by proposing dissolution and submitting it to the shareholders. The board must recommend the proposal unless a conflict of interest or other special circumstance makes a recommendation inappropriate, in which case it has to explain why it’s staying neutral.1Justia. Arkansas Code Title 4 Business and Commercial Law 4-27-1402 The board can attach conditions to what it submits.
Every shareholder entitled to vote gets notice of the meeting, and the notice has to say that dissolution is on the agenda. A simple majority of votes entitled to be cast approves the proposal, unless the articles of incorporation set a higher threshold or require separate voting groups (for example, preferred shareholders voting apart from common).1Justia. Arkansas Code Title 4 Business and Commercial Law 4-27-1402 Check your own articles before assuming a bare majority is enough.
What the Articles of Dissolution Must Include
Once the shareholders approve, you prepare Articles of Dissolution and deliver them to the Secretary of State. The document has to include:
- The exact legal name of the corporation.
- The date shareholders authorized the dissolution.
- The number of votes entitled to be cast, and either the total votes for and against or a statement that undisputed votes in favor were sufficient.
- If separate voting groups exist, the vote totals broken out for each group.
Those requirements come from the Arkansas Business Corporation Act.2Justia. Arkansas Code 4-27-1403 – Articles of Dissolution The Secretary of State publishes a standard form, DN-10, with each required field laid out.3Arkansas Secretary of State. Articles of Dissolution
Filing Fees and How to Submit
You can file online or mail the paper form. Online costs $45; paper costs $50.4Arkansas Secretary of State. Forms / Fees / Records Requests – Corporations Payment goes to the Arkansas Secretary of State. Dissolution takes effect on the date the Secretary of State processes the filing, unless you write in a later effective date.
What Filing Actually Does
This is the piece most people misread. Filing Articles of Dissolution does not immediately end the corporation. Under Arkansas law, a dissolved corporation continues to exist as a legal entity, but its activity is limited to winding up its affairs.5Justia. Arkansas Code 4-27-1405 – Effect of Dissolution Winding up includes collecting debts owed to the corporation, selling off property that won’t be distributed in kind, paying or making arrangements to pay liabilities, and distributing whatever remains to shareholders based on their interests.
Dissolution does not transfer title to corporate property, change the standards of conduct for directors and officers, or block lawsuits against the corporation. Any suit pending on the effective date continues, and the registered agent keeps its authority.5Justia. Arkansas Code 4-27-1405 – Effect of Dissolution Think of dissolution as shifting the corporation from operating mode into shutdown mode. The entity is still alive for legal purposes until winding up is done.
Notifying Creditors
Handling creditors is where a lot of the personal-liability risk sits. Arkansas gives you two separate procedures.
Creditors You Know About
Send written notice to every creditor you’re aware of. The notice must describe what information a claim needs to include, give a mailing address, and set a deadline of at least 120 days from the notice date. It also has to warn that any claim not received by the deadline will be barred.6Justia. Arkansas Code 4-27-1406 – Known Claims Against Dissolved Corporation
If the corporation rejects a claim, the creditor has 90 days from that rejection to file suit. Miss the window and the claim is gone. Working through this process is the cleanest way to close out known liabilities with finality.
Creditors You Don’t Know About
For creditors the corporation can’t identify, publish a notice one time in a newspaper of general circulation in the county where the corporation’s principal office is or was located. If the corporation never had a principal office in Arkansas, publish in a Pulaski County paper.7Justia. Arkansas Code 4-27-1407 – Unknown Claims Against Dissolved Corporation
The published notice must describe claim requirements, provide a mailing address, and state that claims will be barred unless the creditor files suit within five years of the publication date. That five-year bar also captures creditors who were properly notified under the known-claims procedure but whose claims the corporation never responded to, and creditors whose claims arise from events after the dissolution date.7Justia. Arkansas Code 4-27-1407 – Unknown Claims Against Dissolved Corporation If the corporation has already distributed assets to shareholders by the time a valid claim shows up, each shareholder can be held liable up to the lesser of their share of the claim or the amount they received.
Federal Tax Filings
State paperwork doesn’t cover the IRS. Within 30 days of adopting the resolution to dissolve, the corporation files IRS Form 966 reporting the terms of the plan.8Office of the Law Revision Counsel. 26 USC 6043 – Return Regarding Corporate Dissolution or Liquidation The 30-day clock starts on the shareholder vote date, not the Secretary of State filing date, so Form 966 is usually in progress before the state filing goes in.
The corporation also files a final income tax return for its closing year. C corporations file Form 1120 and S corporations file Form 1120-S, checking the “final return” box at the top. S corporations also mark the “final K-1” box on each shareholder’s Schedule K-1. If the corporation sold business property during winding up, Form 4797 may be needed too.9Internal Revenue Service. Closing a Business
Changing Course: Revoking the Dissolution
If the corporation decides to keep operating, Arkansas allows revocation within 120 days of the dissolution’s effective date.10Justia. Arkansas Code 4-27-1404 – Revocation of Dissolution Revocation generally needs the same level of approval that authorized the dissolution, unless the original authorization gave the board power to revoke on its own. You file articles of revocation of dissolution with the Secretary of State along with a copy of the original Articles of Dissolution. Once effective, the revocation relates back to the dissolution date, and the corporation is treated as though it was never dissolved. After 120 days, the option is gone.
If Your Entity Isn’t a Corporation
Articles of Dissolution apply to corporations. Two adjacent situations trip people up.
LLCs file a Statement of Dissolution (form LL-04), not Articles of Dissolution. The form asks for the LLC’s name, the date its certificate of organization was filed, the reason for dissolution, and an effective date if different from the filing date. The fee is $50.11Arkansas Secretary of State. Statement of Dissolution for Limited Liability Company The creditor-notice rules closely mirror the corporate rules: written notice with a 120-day deadline for known creditors, a single newspaper publication with a five-year bar for unknown creditors, and any known claim the LLC doesn’t answer within 30 days is treated as rejected. Federal filings depend on how the LLC elected to be taxed.
Nonprofit corporations follow a separate chapter of the code with parallel wind-up mechanics but different rules for what happens to remaining assets. A public-benefit or religious nonprofit that hasn’t specified distribution in its articles or bylaws must transfer remaining assets to another organization described under Section 501(c)(3) of the Internal Revenue Code. A mutual-benefit nonprofit in the same position distributes to members, or if there are none, to the people or groups it was organized to serve.12Justia. Arkansas Code 4-33-1406 – Effect of Dissolution Getting the distribution wrong can create tax consequences, so a nonprofit should confirm its plan before filing.