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How do I dissolve a single shareholder S corporation.

Brooklyn, NY |

I registered an S Corporation a year ago and now the tax authorities say I should make returns or they will dissolve my company and estimate my returns. I have made no money whatsoever, and so I want to dissolve the company, but I do not know what to do. There are no other shareholders, just me. How do I dissolve a single shareholder S corporation.

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Attorney answers 3

Best Answer

If the corporation needs to file all its corporate returns. Without doing so, you can not proceed to liquidate the corporation. Importantly, if the S corp had a loss then it should pass to you via a K-1 (Form 1120S). This loss may be able to offset other income on your individual return. Bottom line here is that you need to file the S returns which may allow losses to you personally and it will set the stage for the dissolution procedure with the state.

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You should file the tax returns by amending your personal returns and make sure they do not assess you with a tax. You can report that the corporation is being dissolved when you file your taxes each year, HOWEVER, you are not allowed to dissolve a coproration in New York if there is an unpaid tax there is no easy way around this, you must file the taxes, but since it's a single person entity you can probably do this by amendeding your prior returns.

Disclaimer: This answer does not constitute legal advice. I am admitted in the States of New York, New Jersey and Massachusetts only and make no attempt to opine on matters of law that are not relevant to those three States. This advice is based on general principles of law that may or may not relate to your specific situation. Facts and laws change and these possible changes will affect the advice provided here. Consult an attorney in your locale before you act on any of this advice. You should not rely on this advice alone and nothing in these communications creates an attorney client relationship.


I suspect that we are mixing tax authorities here. The IRS (Federal tax) does not send notices to the effect that they will dissolve the corporation for failure to pay tax. Moreover, a corporation does not cease to exist if it fails to pay income tax. The tax at issue appears to be New York's "franchise" tax or the tax that states impose on you for the privilege of creating and maintaining a corporation. New York can (and will) dissolve your corporation if you fail to file the appropriate corporate franchise tax form. You can learn more about the corporate franchise tax at the following weblink:

As for dissolution, the first step is to ensure the corporation has paid all its bills. There are basic instructions available on the NYS Department of State website at:

I hope you find these answers helpful. You should understand that dissolution can be a complex process and it may be that your best alternative is to allow the tax dissolution to occur. I cannot offer any opinion on that point without having more facts about your matter.

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