Learn how to complete the Illinois Articles of Dissolution for a profit corporation using Form BCA 12.20, including requirements, steps, signatures, and filing rules.
How to Complete Illinois Articles of Dissolution
Filing the Illinois Articles of Dissolution for a profit corporation is the official step to close a business with the Illinois Secretary of State. This process requires proper authorization, accurate disclosures, and compliance with state law under the Business Corporation Act.
Illinois Articles of Dissolution for Profit Corporation
The Illinois Articles of Dissolution for a profit corporation formally ends a corporation’s legal existence with the Illinois Secretary of State. Filing Form BCA 12.20 confirms that the corporation has properly authorized the dissolution, resolved its obligations, and disclosed required information such as issued shares and paid-in capital.
Requirements Before Filing Articles of Dissolution
- Verify Corporate Records Are Up to Date
Before filing the Illinois Articles of Dissolution, the corporation must confirm that all records on file with the Illinois Secretary of State are accurate. This includes the corporation’s legal name, registered agent information, and share structure.
Illinois Articles of Dissolution for Profit Corporation
- Confirm Authorization Method Under Illinois Law
Illinois requires that dissolution be properly approved based on whether shares have been issued. Dissolution may be authorized by incorporators, the board of directors, or shareholders, depending on the corporation’s status. The chosen method must match the disclosure provided on Form BCA 12.20.
- Review Paid-In Capital and Share Issuance Records
Corporations must disclose the amount of paid-in capital and issued shares as of the execution date. Ensuring these records are accurate is essential for completing the Articles of Dissolution correctly.
- Resolve Debts, Obligations, and Known Claims
Illinois law requires that the corporation begin winding up affairs before submitting the dissolution filing. This includes notifying creditors, paying outstanding debts, and addressing contracts or pending obligations.
Methods of Authorizing Corporate Dissolution
1. Dissolution by Incorporators (Before Shares Issued)
If the corporation never issued shares and has no board of directors, the incorporators may authorize the dissolution.
This method is available only when no organizational meeting has occurred, and no directors have been named or elected. Incorporators sign the dissolution authorization and confirm the corporation has not issued stock or commenced business.
2. Dissolution by Board of Directors (Before Shares Issued)
When directors have been named or elected but shares still have not been issued, the board of directors may approve dissolution. Approval must follow the voting rules in the Articles of Incorporation or the Illinois Business Corporation Act. This method applies only before any shareholders exist.
3. Dissolution by Shareholders
If the corporation has issued shares, dissolution must be authorized by the shareholders after approval by the board of directors.
The corporation must record the vote results, including the number of shares entitled to vote and the votes cast in favor of dissolution. This method is the most common and must comply with all shareholder voting requirements outlined in corporate bylaws and Illinois statutes.
Information Required on Illinois Form BCA 12.20
1. Corporate Name
The corporation must list its exact legal name as recorded with the Illinois Secretary of State. The name must match state records, including punctuation, spacing, and corporate suffixes such as “Inc.” or “Corporation.”
2. Mailing Address for Service of Process
Form BCA 12.20 requires a valid mailing address where legal notices or service of process may be sent after dissolution. This address ensures the corporation can still receive official correspondence while winding up its affairs.
3. Method and Date of Dissolution Authorization
The corporation must identify the method used to approve dissolution by incorporators, directors, or shareholders and provide the exact date of authorization. This allows the state to verify compliance with Illinois Business Corporation Act requirements.
4. Share Issuance and Paid-In Capital Disclosures
If shares were issued, the corporation must disclose its paid-in capital and confirm whether this amount has changed since the last annual report. Illinois uses these disclosures for corporate recordkeeping and final reporting obligations.
Methods of Authorizing Corporate Dissolution
5. Issued Shares at Execution Date
The form requires the number of shares issued and outstanding on the date the Articles of Dissolution are signed. This confirms the corporation’s capital structure at the time dissolution is executed.
6. Paid-In Capital at Execution Date
Paid-in capital must be reported as of the execution date. This figure reflects the value of assets contributed by shareholders in exchange for stock and must align with prior filings unless an amendment was submitted.
Signature and Execution Requirements
- Authorized Signer Must Execute Form BCA 12.20
The Articles of Dissolution must be signed by an authorized corporate officer, typically the president or secretary. If shares have not been issued, an incorporator or director may sign. The signer must clearly print their name and title.
- Date of Execution Must Match Corporate Records
The signature date must align with the date the board, shareholders, or incorporators approved the dissolution. Any mismatch between authorization date and execution date may lead to rejection.
- Include Attestations Required by Illinois Statute
Illinois requires confirmation that all statements in the Articles of Dissolution are accurate. The signer certifies under penalty of perjury that the corporation followed the correct dissolution process.
Post-Filing Responsibilities
- Complete the Winding-Up Process
After filing the Illinois Articles of Dissolution, the corporation must continue settling remaining business matters. This includes paying outstanding liabilities, distributing assets to shareholders, and closing business accounts.
- Maintain Records for Statutory Retention Periods
Illinois requires dissolved corporations to maintain certain corporate records for several years. This ensures documentation is available if legal or tax questions arise after dissolution.
- File Final State and Federal Tax Returns
The corporation must submit final tax returns to the IRS and the Illinois Department of Revenue. These filings confirm that the entity has ceased operations and ensures compliance with tax obligations.
- Notify Stakeholders of the Dissolution
Vendors, creditors, clients, insurers, and contract partners should be informed that the corporation has been dissolved. Clear communication helps prevent future disputes.
Common Mistakes to Avoid
- Using an Incorrect Corporate Name
Form BCA 12.20 requires the exact legal name as recorded with the Illinois Secretary of State. Even minor errors, such as missing punctuation or incorrect abbreviations, can cause rejection.
- Selecting the Wrong Authorization Method
Corporations often mistakenly choose the wrong dissolution approval method, especially when shares were never issued. Illinois requires strict adherence to the correct method, so selecting the wrong option invalidates the filing.
- Inaccurate Paid-In Capital or Share Issuance Numbers
Incorrect financial disclosures on Form BCA 12.20 are a common issue. These numbers must reflect the corporation’s official records on the execution date.
- Missing or Invalid Signatures
Filings are frequently rejected because the authorized signer did not sign properly or the signer’s title was omitted. Only individuals legally empowered to dissolve the corporation may execute the form.
Common Mistakes to Avoid
- Overlooking Post-Dissolution Obligations
Some corporations assume the filing alone completes the dissolution. However, Illinois requires continued winding-up activities, tax filings, and record retention even after the Articles of Dissolution are accepted.
Conclusion
Filing the Illinois Articles of Dissolution requires precise disclosures, proper authorization, and strict adherence to Illinois corporate filing rules. Completing Form BCA 12.20 accurately helps ensure the state accepts the dissolution without delays, allowing the corporation to close its operations cleanly and remain compliant with legal requirements.
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