When It's Time to Close
Whether you're shutting down a business or leaving a state, you need to properly close your entity registrations. Failing to do so means you'll continue to owe annual report fees, franchise taxes, and registered agent costs.
Dissolution: Closing Your Domestic Entity
**Dissolution** terminates the entity in the state where it was originally formed (its "domicile" state).
Steps to Dissolve
4. **Cancel permits and licenses** — Notify state agencies of the closure
5. **Notify creditors** — Most states require notice to known creditors
6. **Wind up affairs** — Settle debts, distribute remaining assets
What Happens If You Don't Dissolve
Withdrawal: Leaving a State
**Withdrawal** (sometimes called "surrender" or "cancellation of authority") ends your foreign qualification in a state where you registered to do business.
Steps to Withdraw
4. **Cancel registered agent** — Only after withdrawal is confirmed
Common Mistake
Many businesses simply stop paying their registered agent and assume they've "left" the state. **This does not end your obligations.** Without a formal withdrawal, you'll continue to owe annual fees and may face penalties.
Dissolution vs Withdrawal: Quick Reference
Important: Dissolve, Then Withdraw
If you're closing a business entirely:
This order matters because some states require proof of foreign entity status to process withdrawals.
How CLS Can Help
We handle dissolution and withdrawal filings in all 50 states. Our team manages the full process including tax clearance coordination, registered agent cancellation, and confirmation tracking. Contact us for assistance, or learn about our entity management services.