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What's the simplest way to kill a Delaware C Corp?

21 点作者 tlhunter超过 2 年前
I&#x27;ve got a Delaware C Corp, based in California, that I started in January of this year (2022). It was to be an online Software as a Service company. Sadly I was only able to get two customers and after several months of lost wages I eventually went back to a regular job.<p>The company never had any employees (except for myself, though I never gave myself salary). Of the two customers, the first paid me under $1,000 USD and the second under $2,000 USD, via check, with no contracts. I also personally deposited $5,000 into the company&#x27;s bank account which then went to things like hosting fees.<p>The company was founded using Stripe Atlas. I registered it in the city I live in, San Francisco. I&#x27;m pretty sure it&#x27;s registered in the US via Stripe Atlas. I tried to register it in California but I was unable to figure out the paperwork (certificate of good standing stuff). The company hasn&#x27;t paid any taxes yet -- which might be another thing that I&#x27;ve screwed up.<p>At this point I&#x27;m wondering: what&#x27;s simplest way to shut down the company and wrap up any liabilities (legal &#x2F; taxes) that it may have? I would be happy to refund the customers if that makes things easier.

8 条评论

brudgers超过 2 年前
The simplest way is to pay a lawyer.<p>It is also the best way.<p>Not only because you also have a potential couldn’t-figure-out-the-paperwork problem with California.<p>But also because C-corps are complex legally and financially.<p>Good luck.<p>[For what it might be worth to people other than the OP, C-corps are really not DIY despite what Stripe sells. Also, most of the time, a C-corp is the worst choice.<p>The exception is when you are about to receive outside investment from investors who require a C-corp.]
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ilaksh超过 2 年前
I think the whole industry around incorporation is a racket at this point. It&#x27;s literally a database. It should not cost hundreds of dollars to put a record in a database, or keep it in there. Or thousands of dollars to tell you how to take it out.<p>I had stupidly incorporated something related to some fantasy idea I never ended up with the funds to pursue. A year later with zero actual activity, I am informed that I owe hundreds in taxes for it by the company that is in charge of the record or something. I tell them I need to dissolve it, they point me to their FAQ that says nothing useful. Or maybe it was selling me another dissolution service for hundreds of dollars. I don&#x27;t remember. But it was actually two layers of companies, the retail and then the record keeping, then Delaware itself, all extracting hundreds in fees, for absolutely nothing to happen. I doubt anyone even searched for my business name in that time.<p>It&#x27;s the type of thing that makes me want to root for the AIs to take over.
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ianhawes超过 2 年前
A general PSA for those finding this later on: Unless you expect to close a round of VC funding within 3-5 months (i.e. you already have investors lined up) you should generally save yourself the hassle and form a Delaware LLC instead.<p>The process of converting a DE LLC to a DE C Corp is far easier than the paperwork involved in properly running a DE C Corp when you&#x27;re bootstrapping.<p>Remember that as a solo founder without investors, you are effectively being double taxed with a C-corp because it pays taxes on its income and then you pay taxes on your income.
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andrewmcwatters超过 2 年前
This isn’t particularly helpful for the OP, so sorry tlhunter, but for anyone else reading, please don’t bother with Stripe Atlas or a Delaware company.<p>Just form your private business with your local corporation commission.<p>You need to understand basic corporate operations to do business, and jumping immediately into all of this extraneous work is completely unnecessary for small private businesses.
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steffan超过 2 年前
You probably shouldn’t be coming to HN for legal advice, which is what you need.<p>In any case, you’ll need to dissolve the Delaware Corp in Delaware and unregister(?) the California foreign Corp. registration. You almost certainly owe taxes to CA and taxes &#x2F; fees to Delaware.<p>I strongly recommend talking to an attorney who specializes in corporate law, at least having a consultation to enumerate the steps necessary.
aficiomaquinas超过 2 年前
In order to surrender the foreign qualification in the state of California you&#x27;ll have to file your last California return, be sure to mark the return as final in the actual form and make sure it&#x27;s correct. Hire a CPA. California franchise tax is paid in advance, so don&#x27;t pay the 800 dollars for next year, otherwise they&#x27;ll make you beg them to give it back, which they&#x27;ll eventually will, after a couple of years, by the time the company will not exist and that payment will be unrecoverable. Once the final Cal return is filed, you&#x27;ll have to file form SURC.<p>You&#x27;ll have to file your final federal tax return, too. Although you might be able to do it yourself with Turbotax, I&#x27;d hire a CPA.<p>You&#x27;ll have to legally dissolve the company with the articles of dissolution and make sure all the previous board meetings and cap table is sound. Then file the dissolution with the Delaware Secretary of State. If you don&#x27;t hire a lawyer to double-check the corporation for you, you&#x27;ll be exposing yourself to liability down the road, which will could be costlier than the lawyer&#x27;s fees. Corporations must liquidate their assets, and that requires filing forms with the IRS, too. After that, you&#x27;ll have to close the bank accounts, vendor accounts, credit cards, etc.
annoyed_eng超过 2 年前
I had a similar situation. I used <a href="https:&#x2F;&#x2F;legalinc.com&#x2F;" rel="nofollow">https:&#x2F;&#x2F;legalinc.com&#x2F;</a> to close my Delaware C Corp. My C Corp was also formed by Stripe Atlas. Process was pretty painless. Cost in my case was ~$800 including this years franchise tax (~$400) which was also due. I believe you will still need to file a tax return for the Corp for this year...
prirun超过 2 年前
A good SF accountant can probably walk you through this if you don&#x27;t want to go the more expensive lawyer route. If a lawyer is needed, an accountant will be able to tell you that.<p>Not a lawyer or accountant, but for $3000 in income, I don&#x27;t think you have a lot to worry about.