Follow these steps to close your S corp and terminate your company’s S corp election.
- Review your Articles of Incorporation (for corp) or Articles of Organization (for LLC) for any potential dissolution guidelines.
- Dissolve your LLC or corporation with your state. This is typically done through your state’s Secretary of State, so go to your state’s Secretary of State’s site to see if you can dissolve online or if you must snail mail in the dissolution. Example: In North Carolina, you can upload a PDF filing of the Articles of Dissolution online. In other states, you may be required to mail the Articles of Dissolution. Note: if your company has more than one shareholder, be sure to conform to any applicable agreements, Articles of Incorporation/Organization, state statutes; and document your vote to dissolve the company.
- Pay off all company debts, out of the company’s business account, and be certain no outstanding debts remain.
- Cancel all applicable businesses licenses and permits. Contact your local jurisdictions, if applicable, and let them know you’re closing. Example: if you submit an annual business property tax listing form to your county, contact your county and ask what steps you need to take to close your business tax account. Example: if your city or township requires a business license, contact the city or township and let it know you’re closing.
- Snail mail a statement of S corp revocation to the IRS. Click here for more details.
To revoke a Subchapter S election/small business election that was made on Form 2553, submit a statement of revocation to the service center where you file your annual return.The statement should state:
The corporation revokes the election made under Section 1362(a)
Name of the shareholder(s),
Address of the shareholder(s),
Taxpayer identification number of the shareholder(s),
The number of shares of stock owned by the shareholder(s),
The date (or dates) on which the stock was acquired
The date on which the shareholder’s taxable year ends
The name of the S corporation
The S corporation’s EIN
The election to which the shareholder(s) revokes
The statement must be signed by the shareholder(s) under penalties of perjury
Signature and consent of shareholder(s) who collectively own more than 50% of the number of issued and outstanding stock of the corporation, (whether voting or non-voting)
Indication of the effective date of the revocation (or prospective date)
Signature of person authorized to sign return
Due Date of Revocation:
If revoking effective the first day of the tax year, the revocation is due by the 16th day of the third month of the tax year,
If revoking effective any day other than the first day of the tax year, the revocation must be received by IRS by the requested effective date.For example, the S corporation is on a December 31 tax year ending and requests a revocation effective January 1, the revocation is due March 15.
The S corporation is on a December 31 tax year ending and requests a revocation effective February 14, the revocation is due February 14.
6. File final S corp tax returns. Check the “Final return” box on your corporate tax returns.