The process of Legally Closing a Corporation in Texas is called Dissolution.  After a Texas Corporation has been Dissolved, it ceases to be Legally Active in the Texas Secretary of State's records and may no longer Legally conduct business in the state of Texas.

A Texas Corporation is created when the TX Secretary of State approves the Formation Documents - Articles of Incorporation.  A record of the Texas Corporation is added to the list of Corporations which have officially registered with the Texas Secretary of State.  Once a Corporation is registered with the Texas Secretary of State, that Corporation immediately has both reporting and tax obligations which incur penalties if the obligations are not met by the required deadlines.

If you've registered a Texas Corporation with the Texas Secretary of State and want to cease business activities you have to let the TX Secretary of State know that you intend to close your company.  Only after the TX Secretary of State has made sure that all of the obligations of the Texas Corporation have been fulfilled will the Secretary of State approve of the closure of the company.

When the Texas Secretary of State approves the closing of a TX Corporation, that Texas Corporation is said to be Dissolved.  The process of Dissolving a Texas Corporation is called Texas Corporation Dissolution.

A Texas Corporation must have paid all tax obligations before the Texas Secretary of State will approve Dissolution of the Texas Corporation. A Good Standing Certificate from the Texas Comptroller must be attached to the Certificate of Termination of the TX Corporation.

As soon as a Texas Corporation is registered with the TX Secretary of State, that Corporation is responsible for recurring obligations of the Texas Secretary of State and the Texas Comptroller of Public Accounts.  If a Texas Corporation does not file its required reports or pay its tax obligations, then that TX Corporation could be responsible for penalties which compound as time goes by.

Unless you Dissolve (Legally Close) your Texas Corporation with the Texas Secretary of State that TX Corporation will be responsible for all recurring fees and penalties until the company has been legally closed.

Texas Corporation Dissolution is one part of a larger process commonly called the "Winding Up" process.

There are things you need to do before you can request approval of Corporation Dissolution from the Texas Secretary of State; and things that you have to do after the TX Secretary of State has approved Dissolution of the Texas Corporation. 

When a Texas Corporation is originally created, the Organizers may create Bylaws that define how the Corporation will be run.  The Bylaws may include pretty much anything that has to do with running the Corporation, including specific requirements which need to be followed before the Corporation may be Legally Closed.  Before you do anything else, you should review the Bylaws for anything that needs to be done before the Business is Legally Closed.

What you have to do both before and after the Texas Corporation is Dissolved largely depends on how much stock, if any, has been issued and how much and what kind of debts and liabilities that the Texas Corporation has.  If the Texas Corporation has not commenced business then the TX Corporation Dissolution process is easier.

1. Hold a Board of Directors meeting and record a resolution to Dissolve the Texas Corporation
   
   If a Board of Directors has been appointed for the Texas Corporation, then the Board is required to adopt a resolution to Dissolve the TX Corporation.  There should be a majority of Board Members who vote Yes to Legally Close the company.  A formal date on which the Corporation will be closed should be specified.  Minutes of the meeting should be recorded and retained in the business records.  If the Board of Directors has not been appointed then the Incorporator(s) have to apply for Dissolution of the Texas Corporation.
   
   We can transcribe and compile any minutes or approvals into a form that is legally recognized by the Texas Secretary of State.
   
   
2. Hold a Shareholder meeting to approve Dissolution of the Texas Corporation
   
   If a Texas Corporation has issued shares of stock then a meeting of the Shareholders (owners) must be held and recorded. A majority of Corporate Shareholders must approve the Dissolution plan.  The approval actions should be documented and kept in the business records.
   
   If no shares have been issued then the Texas Corporation Dissolution process is easier.
   
   
3. File all required tax returns with the Texas Comptroller of Public Accounts
   
   The Texas Secretary of State will not approve the Dissolution of any TX Corporation until that Corporation has fulfilled all its tax obligations with the Texas Comptroller of Public Accounts.
   
   
4. Clear up any business debts
   
   All creditors of a Texas Corporation should be given notice of the pending Corporation Dissolution. Each creditor should be given a mailing address to which they may submit claims as well as a deadline by which claims may be submitted.
   
   While the Texas Secretary of State does not legally require the publication of a Notice of Dissolution of a Texas Corporation, publication is a good way to notify anyone who might have a claim against the Texas Corporation.  Evidence of publication might prove useful down the line if someone makes a claim against the TX Corporation after the Texas Corporation has been dissolved.
   
   
5. Pay all taxes and administrative fees owed by the Texas Corporation
   
   The Texas Secretary of State will definitely not approve the Dissolution of a Texas Corporation until all outstanding taxes and applicable registration and administrative fees have been paid.

1. Distribute all remaining assets of the Texas Corporation
   
   If the Texas Corporation has any remaining assets, these may be divided according to the Shareholders' ownership interests in the TX Corporation. All distributions to Corporate Shareholders must be reported to the IRS.  Refer to the Corporation Bylaws for specific requirements, if any, for asset distribution.
   
   
2. Close all business bank accounts of the Texas Corporation
   
   If there are any business accounts that have been opened for the Texas Corporation then those accounts must be closed.  If any Corporate business accounts are left open there may be liability and obligations of the Dissolved Texas Corporation which could lead to legal problems.
   
   
3. Cancel all local business licenses and permits of the TX Corporation
   
   If the Texas Corporation has obtained any state, regional, county or city business licenses or permits, there may be cancellation requirements associated with those licenses or permits.  Each of those must be cancelled to avoid any reporting or fiscal obligations the Texas Corporation may have.  This includes business registration licenses as well as reseller permits.
   
   
4. File IRS Form 966
   
   A Dissolved Texas Corporations may be required to file IRS Form 966 with the US Internal Revenue Service.  This filing is required within 30 days after the final Dissolution plan is approved.  Filing IRS Form 966 lets the Federal Government know that the Texas Corporation has been legally Dissolved so that it may take the appropriate actions.
   
   
   We can prepare IRS Form 966 for you to file.
   
   
5. Cancel the IRS account associated with the TX Corporation's Federal Tax ID (EIN)
   
   A Federal Tax ID, or Federal Employer Identification Number (EIN), is like a Social Security Number for the Texas Corporation.  Once the IRS links an EIN to a Texas Corporation, that EIN stays with the Texas Corporation even after the Company has been Dissolved by the Texas Secretary of State.
   
   When the IRS processes the final tax return for the Texas Corporation, they automatically make the EIN inactive.  However, the account associated with the EIN is not automatically closed.  Closing the account associated with the EIN lessens the likelihood of any problems with the EIN account, or with the IRS, in the future.
   
   If you should decide to revive the Texas Corporation down the line the IRS will reactivate the old EIN for your new Business.
   
   Before a Texas Corporation can close an EIN account, it must be in Good Standing with the IRS.  The Texas Corporation must have filed all required tax returns and paid any applicable fees and penalties due to the IRS.  The Texas Corporation cannot close its EIN account until the IRS has received payment for any tax amounts the Company may owe.
   
   
   We can prepare the formal documents which you can sign and submit to the IRS in order to close the account associated with your EIN.
   
   
6. Keep Records of all Pertinent Business Documents
   
   In order to avoid problems down the line, you should keep copies of all tax filings, contracts and employment records on file as well as Certified Copies of all company documents filed with the Secretary of State.  This includes your Formation Documents - your original Articles of Incorporation and any Amendments - and all Dissolution douments.

You notify the IRS that your Texas Corporation has been Closed on the final tax return that is filed for your Business. 

If you have employees and file taxes quarterly with IRS Form 941, Employers Quarterly Tax Return, check the appropriate box on that form to let the IRS know that your Corporation has Closed.  If you file yearly taxes do the same on IRS Form 944, Employers Yearly Tax Return. You should also attach a statement to the return showing the name of the person keeping the payroll records and the address where those records will be retained.

When you opened your Texas Corporation you most likely were assigned a Federal Employer Identification Number (EIN).  Once the IRS links an EIN to a Corporation, that EIN stays with the Corporation even after the Company has been Dissolved.  If you don't plan to reopen your Texas Corporation after it has been Closed, you should cancel the EIN account that has been assigned to your Company.

The time it takes to Dissolve a Texas Corporation varies depending on how long it takes to complete the actions that are required in each specific case - holding meetings, closing accounts, distributing assets, etc.

The Texas Secretary of State requires a Tax Clearance Certificate from the TX Comptroller of Public Accounts before it will approve the Dissolution of a Texas Corporation.

The time it takes the TX Comptroller of Public Accounts to process a request for a Tax Clearance Certificate depends on the tax status of the Texas Corporation. In some cases it could take 5-6 weeks to get a Tax Clearance Certificate from the Texas Comptroller of Public Accounts.

Once the initial actions are completed, the Texas Secretary of State usually takes around 3-5 business days to process the Certificate of Termination.

Processing times for Texas Corporation Dissolution filings vary depending on the work load of the Secretary of State's staff.  We've found that normal processing of Texas Dissolution filings takes the state around 3-5 business days.
We are dependent on, and have no control over, the staff and systems of the Texas Secretary of State or Texas Comptroller of Public Accounts. In our experience 3-5 business days is the time it usually takes the Texas Secretary of State to process a Texas Dissolution filing. We get your Texas Corporation Dissolution filing to the TX Secretary of State as soon as possible after we receive your order. Once it is at the state we have no control over the Texas Dissolution approval process.

The total cost to Dissolve a Texas Corporation varies depending on exactly what is required for each specific TX Dissolution.  We charge $249 plus any state fees for our Texas Corporation Dissolution services.

We also offer these Texas Corporation Dissolution services separately.

If there are Foreign Corporations in states other than Texas that are tied to the Domestic Texas Corporation then each of those Foreign Corporations must be Dissolved before the Texas Corporation can be legally Dissolved.

A Texas Corporation company name becomes available for anyone to use when the Texas Corporation is Dissolved by the Texas Secretary of State. There are no Corporation company name protections in Texas once a Texas Corporation has been Dissolved by the Texas Secretary of State.