Closing a company in the United States involves more than simply ceasing business operations. A corporation must complete the applicable state dissolution formalities, address its federal tax obligations, and take the necessary steps to close its IRS business account.
For business owners, including non-US residents who have incorporated a company in Wyoming but no longer intend to operate it, understanding these requirements can help ensure an orderly closure and reduce the risk of future compliance issues.
This article explains the key steps involved in dissolving a Wyoming corporation and closing its federal tax account.
1. Approve the Dissolution of the Corporation
The first step is to formally approve the company’s dissolution in accordance with its governing documents and applicable law.
The corporation should document the decision through the appropriate board and shareholder resolutions, as applicable. These resolutions should authorize the dissolution and identify the individuals responsible for completing the winding-up process.
The company should also review its outstanding obligations, including unpaid liabilities, contractual commitments, bank accounts, and any remaining assets. Outstanding liabilities should be addressed, and the remaining assets should be distributed in accordance with applicable legal requirements.
2. File Form 966 with the IRS
A corporation that adopts a resolution or plan to dissolve or liquidate its stock is generally required to file IRS Form 966 – Corporate Dissolution or Liquidation.
The form reports the corporation’s decision to dissolve or liquidate to the Internal Revenue Service (IRS).
Key points:
• Prepare and file Form 966 in accordance with the applicable IRS instructions.
• The form is generally due within 30 days after the adoption of the resolution or plan to dissolve.
• Keep the dissolution resolutions and supporting corporate records available for submission as required by the applicable filing instructions.
The current form and filing instructions are available on the IRS Form 966 page.
3. File Articles of Dissolution with the Wyoming Secretary of State
The corporation must also complete the applicable state-level dissolution filing with the Wyoming Secretary of State.
Wyoming provides different dissolution forms depending on the circumstances of the corporation. For example, the form titled Articles of Dissolution by Incorporators or Initial Directors is intended for specified situations involving corporations that have not issued shares or have not commenced business. The appropriate form should be selected based on the company’s circumstances.
For the applicable form, the company’s details and required declarations must be completed accurately. The relevant form may require confirmation that no debts remain unpaid, that remaining net assets have been distributed where shares were issued, and that the dissolution was properly authorized.
Filing fee:
The Wyoming form for dissolution by incorporators or initial directors specifies a filing fee of USD 60 (subject to change). Fees and requirements should be checked against the applicable form before submission.
Mailing address:
Wyoming Secretary of State
Herschler Building East, Suite 101
122 W 25th Street
Cheyenne, WY 82002-0020
USA
The USD 60 filing fee must be paid by check payable to the Wyoming Secretary of State. Online payment or other electronic payment methods are not available for this mail-in filing. Ensure the check is enclosed with the Articles of Dissolution when submitting the documents by mail.
The cited form states that processing may take up to 15 business days from receipt and that the filing cannot be accepted by email.
Before filing, confirm that the corporation meets the eligibility requirements of the selected form and that it is in active status and good standing with the Wyoming Secretary of State.
Official forms are available through the Wyoming Secretary of State’s Forms page.
4. Request Deactivation of the Company’s EIN
An Employer Identification Number (EIN) is the company’s permanent federal taxpayer identification number. The IRS does not cancel an assigned EIN; however, it can deactivate the EIN and close the associated business account once the applicable requirements have been met.
To request deactivation, the company should send a signed letter to the IRS containing:
• The company’s complete legal name.
• Its EIN.
• Its business address.
• The reason for requesting deactivation.
• A copy of the EIN assignment notice, if available.
IRS mailing address:
Internal Revenue Service
MS 6055
Kansas City, MO 64108
USA
The IRS also lists an alternative address in Ogden, Utah, for these requests. Confirm the current official instructions before mailing.
Importantly, the IRS requires all outstanding tax returns to be filed and taxes owed to be paid before it can deactivate the EIN and close the business account.
Further details are available on the IRS’s official EIN deactivation guidance.
5. File the Final Federal Tax Return
State dissolution and EIN deactivation do not eliminate the corporation’s federal tax filing obligations.
The corporation must file its applicable final federal income tax return for the year in which it closes. The return depends on the company’s federal tax classification.
For example:
• C corporation: Generally files Form 1120 and marks it as a final return.
• S corporation: Generally files Form 1120-S and marks it as a final return, along with the applicable final Schedule K-1 filings.
The corporation may also need to report the sale or distribution of assets, settle outstanding tax liabilities, and complete other applicable information returns.
If the company has employees, final payroll tax returns and related reporting may also be required.
The appropriate final filings should be determined based on the company’s tax classification, activities, ownership, and outstanding obligations.
Refer to the IRS’s Closing a Business guidance for further details.
6. Maintain Records of the Closure
After completing the dissolution and tax filings, the company should retain copies of its resolutions, state dissolution documents, final tax returns, EIN deactivation correspondence, financial statements, and records relating to the settlement of liabilities and distribution of assets.
These records may be needed to respond to future tax enquiries or establish that the company completed the relevant closure formalities.
Important Considerations for Foreign-Owned Companies
Foreign-owned US corporations may have additional tax and reporting considerations. Depending on their ownership structure and activities, these may include information reporting, related-party transactions, withholding obligations.
The absence of business activity or revenue does not automatically eliminate all filing obligations. The company’s filing history and tax classification should therefore be reviewed before closure.
Conclusion
Closing a Wyoming corporation involves coordinating state-level dissolution formalities with federal tax compliance. The principal steps generally include authorizing the dissolution, filing Form 966 where required, submitting the appropriate Articles of Dissolution to the Wyoming Secretary of State, filing the applicable final tax returns, and requesting deactivation of the company’s EIN.
Because the precise requirements depend on the company’s legal structure, tax classification, filing history, and circumstances, a review before initiating the closure can help identify outstanding obligations and ensure the process is completed appropriately.
Need assistance closing your US company?
KL Aggarwal Associates assists businesses with US corporate compliance and closure formalities, including coordination of state dissolution filings, preparation of IRS closure correspondence, and review of applicable final tax filing requirements. Contact our team at mail@klaggarwal.com to discuss your company’s circumstances and the support required.