When a corporation is canceled, it denotes that it has been dissolved and is no longer in operation. This can occur for a number of reasons, including as insolvency, voluntary dissolution, and non-payment of taxes or failure to submit required documents. When a corporation is dissolved, it no longer qualifies as a legal person and is no longer able to transact business or sign contracts.
You must submit a Certificate of Dissolution to the Delaware Division of Corporations if you want to dissolve your corporation there. The name of the corporation and the date of dissolution must be included in this document, which must be signed by a majority of the directors or officers. Along with the filing fee, the Certificate of Dissolution must be submitted.
If you don’t dissolve your LLC in Delaware, there may be fines and fees. If you fail to dissolve your LLC on time, you could be hit with late fees, interest charges, and other fines. You can also be responsible for any debts or commitments that the LLC makes after it is dissolved.
Delaware franchise tax can be evaded in a number of ways. If your LLC is eligible, one choice is to submit a tax exemption application. By applying for a reduced tax rate based on the earnings or assets of your LLC, you could also be able to lessen the amount of franchise tax you owe. If your LLC has incurred specific expenses that qualify for a credit, another choice is to file for a tax credit.
Delaware LLCs must pay an annual franchise tax that is calculated depending on the number of shares the company is authorized to issue or the value of its assets. For LLCs with fewer than 3,000 approved shares and more than 3,000 authorized shares, the current cost is $300 and $400, respectively. For some LLCs, the franchise tax burden may be reduced or even eliminated, however there are some exceptions and exemptions that are possible.
In conclusion, dissolution and loss of legal status are the results of cancelling a corporation. You must submit a Certificate of Dissolution to the Delaware Division of Corporations if you want to dissolve your LLC there. If you don’t dissolve your LLC, you risk fines and costs. Delaware franchise tax can be avoided in a number of ways, such as by applying for a tax credit or exemption or by requesting a reduced tax rate depending on the earnings or assets of your LLC. Although Delaware LLCs must pay an annual franchise tax, there are exclusions and exceptions that may allow some LLCs to have their tax obligations reduced or even eliminated.