close an S Corp


J

jkutti2000

I opened an S CORP along with a partner with the intention
of doing export business.

but none of us found the time needed to make anything
click..

What are my legal implications of keeping this S corp open
and how easy/difficult is it to file taxes for a business
with ZERO income or expense..

Should I shut it down.. How easy/difficult is that..

I did receive a Tax ID. plus some documents asknig me to
apply for a Sales TAX id. which I didnot.
 
Last edited by a moderator:
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K

Katie

I opened an S CORP along with a partner with the intention
of doing export business.

but none of us found the time needed to make anything
click..

What are my legal implications of keeping this S corp open
and how easy/difficult is it to file taxes for a business
with ZERO income or expense..

Should I shut it down.. How easy/difficult is that..

I did receive a Tax ID. plus some documents asknig me to
apply for a Sales TAX id. which I didnot.
To close out the corporation, generally you are required to
file a certificate of dissolution or similar document with
the Secretary of State of the state where it is
incorporated. This is not a terribly complicated process,
and you may find the necessary forms on your state's SOS web
site.

To keep the corporation alive you would have to continue
filing income tax returns (and paying any fixed-dollar
minimum tax, e.g., the California $800 minimum tax) and
whatever annual reports are required by the Secretary of
State (which usually also require a nominal fee). If the
corporation does not file the necessary returns or reports
it will usually be suspended. In that case it generally
ceases to exist as a corporation except for certain limited
purposes, such as to change its name or to apply for tax
exempt status. Attempting to do business in the name of a
suspended corporation may give rise to civil and/or criminal
penalties.

If the corporation has no assets, and you did not take
anything out of it that you didn't pay for in one way or
another, and you have no intention of using it in the
future, you may be just as well off to let it die on the
vine. Unless you have obtained something from it that
rendered it insolvent, you generally will not be personally
liable for any unpaid taxes or fees, and there is nothing
there for the state to get from the corporation.

This all depends on the laws and procedures of the state of
incorporation, however.

Katie in San Diego
 
Last edited by a moderator:

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