In accordance with N.J.S.A. 14A:12-1, a corporation may be dissolved in any one of the following ways:

a. by filing a Certificate of Dissolution pursuant to section 14A:12-5.1 upon expiration of any period of duration stated in the corporation’s certificate of incorporation;

b. by action of the incorporators or directors pursuant to section 14A:12-2;

c. by action of the shareholders pursuant to section 14A:12-3;

d. by action of the board and the shareholders pursuant to 14A:12-5;

e. by action of a shareholder or shareholders pursuant to section 14A:12-5;

f. by a judgment of the Superior Court in an action brought pursuant to section 14A:12-6 or 14A:12-7;

g. by proclamation of the Secretary of State repealing or revoking a certificate of incorporation for nonpayment of taxes or for failure to file annual reports;*

h. by action of a corporation without assets pursuant to section 14A12-4.1.

The dissolution of a corporation may be accomplished through the Business Gateway site of the NJ Division of Revenue - http://www.state.nj.us/njbgs/

The first step in your dissolution process is the request for a Tax Clearance Certificate. This is Form A-5088 and is required for all for-profit corporations with assets. To effect the dissolution all shareholders shall sign and file in the Office of the Treasurer, the articles of dissolution, Form C-159D.

I would suggest, however, before starting the process that you make sure all corporate income tax returns and taxes have been paid. The tax clearance certificate will not be issued with outstanding taxes. There is an additional form, A-5052-TC which is an estimated final return. Even if all your taxes are filed and paid, you must file an estimated summary final return with your dissolution package.

When you have the estimated final return, you may file all documents together as a package, with the NJ Division of Revenue. All documents, including the Application for Tax Clearance Certificate, Certificate of Dissolution, copy of estimated summary tax return, and check in the sum of $120.00 (plus any sum due on the tax return). If applicable, the Division of Taxation will inform the corporation of any outstanding obligations not reflected on the final return. Any outstanding obligations must be satisfied before the Tax Clearance Certificate will be issued.

The dissolution will be considered filed and effective as of the date the Division of Revenue receives the property completed and executed articles of dissolution, payment for all fees and notice of Tax Clearance from the Division of Taxation. if the filing is rejected for any reason, the date of dissolution will be the date all forms and payments are resubmitted and deemed complete.

REINSTATEMENT

*As set forth above in article g., the Secretary of State may revoke the charter of any corporation that has not filed its’ annual returns and paid the yearly fee.

How many time have you handled a real estate closing where the seller is a corporation and lo and behold the title report comes back showing the charter of the corporation has been revoked for failure to file annual returns.

Reinstating a corporate charter may be accomplished through the same website, http://www.state.nj.us/njbgs/

The reinstatement process is automated and all forms may be completed in electronic form on the online reinstatement process. The fees for reinstatement vary by the type of business involved and the number of outstanding annual returns. The online service will calculate the applicable fees and you will pay the fees as past of the online reinstatement session. The electronic form will advise you the number of years that are delinquent and you simply fill in the proper information. If, in the time between voiding and reinstatement, the registered agent has changed, or the registered office of the corporation, you may change those while completing the reinstatement form. There is, of course, an additional fee for the change.

If the corporate charter has been revoked for some time, the business name may be reserved or taken by another entity. Therefore, as part of the reinstatement process you will be required to check on the availability of the business name.

The above processes are time consuming but not difficult. Usually the hardest part is getting the tax returns prepared in a timely manner by the accountant. Once the forms are all signed, the fees paid and sent in, it is a matter of waiting and calling for status reports.

If you need any additional information with regard to the above guidelines, don’t hesitate to contact me.

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