What is dissolution & wind-up?
Closing a company properly — the state filing, the final returns prepared, the accounts that die clean.
Closing a Delaware company is not one filing, it's a sequence, and the order matters more than the paperwork itself. Delaware will not process a dissolution on an entity that owes back franchise tax or has an unfiled annual report sitting open — the state has to see good standing before it will let the entity go. That single rule is the reason so many founders discover, mid-wind-up, that closing the company actually starts with clearing two or three years of franchise tax they'd stopped paying once the business went quiet, sometimes with penalties and interest stacked on top of what was originally a modest bill.
Once the entity is current, the filing itself is short: a Certificate of Dissolution for a stock corporation, or a Certificate of Cancellation for an LLC, both filed with the Delaware Division of Corporations. What precedes and follows that one document is the actual work — a board or member resolution authorizing the wind-up, a documented process for settling or provisioning for known debts, creditor notice where the statute calls for it, and then the disposal of whatever the company still holds: bank balances, receivables, equipment, IP. Assets get paid out in a fixed order — creditors first, then equity holders — and any liquidating distribution to a shareholder carries its own tax reporting.
Who does what
The dissolution filing is prepared and coordinated by CapEasy; final federal and state returns run through partner CPA firms.
Who does what
| Your CapEasy team | Dissolution & wind-up, the reconciliations and reporting behind it, and the questions list that keeps it honest. |
| Your CPA or enrolled agent | Everything that carries a licence in United States — rendered exactly as written: issue compilation, review or audit reports — those are restricted to licensed cpa firms. |
| You | One conversation with one named person, and the decisions that are genuinely yours. |
Dissolution & wind-up in United States
Delaware will not dissolve an entity that owes back franchise tax or has an unfiled annual report
Good standing is a precondition, not a formality — the Division of Corporations checks the entity's franchise-tax and annual-report history before it will accept a Certificate of Dissolution or Cancellation. A corporation with two unfiled annual reports, or an LLC with a lapsed franchise-tax year, has to clear every one of those gaps first: file the missing reports, pay the back tax, then file to dissolve. We pull that history at the start of every engagement so the real timeline is clear before anyone assumes the state filing is the only step left.
The state filing and the final tax return are two separate obligations, not one event
A Certificate of Dissolution filed with Delaware ends the entity's existence under Delaware law. It does nothing with the IRS or a state revenue department — those close out through a final Form 1120 (C-corp), Form 1065 (multi-member LLC taxed as a partnership), or the closing items on a single-member LLC owner's Schedule C, each marked 'final' and reporting the last year's activity including any gain or loss on distributed assets. We track both obligations on one timeline so the state filing doesn't get treated as the finish line when a return is still owed.
Wind-up follows a fixed distribution priority: creditors first, then equity holders
Delaware's wind-up statute requires known debts and liabilities to be paid or provisioned for before anything goes to shareholders or members — a company can't distribute its remaining cash to owners and leave a vendor invoice unpaid. Creditor notice, where the statute calls for it, has to go out and the response window has to run before the company treats a debt as settled. We document that sequence and the resolution authorizing it as part of the wind-up file; disputed creditor claims or contested priority go to counsel, not through us.
A lapsed franchise-tax filing doesn't close a company — it forfeits it, and the company is still legally alive
Administrative dissolution happens when a company simply stops paying franchise tax or filing its annual report, and Delaware forfeits the charter for nonpayment. That's not a clean close: the entity still exists in a lapsed state, back taxes and penalties keep accruing conceptually against it, and bringing it back later (a Certificate of Revival) costs more than dissolving on purpose would have. We flag this distinction early with any founder who says the company has 'basically already closed' because it stopped filing — it hasn't, on paper, and the state still expects to hear from someone.
What your CPA or enrolled agent receives from us
- A franchise-tax and annual-report gap check for the entity, listing every unfiled year or unpaid balance that has to clear before a dissolution filing can go in.
- The board or member resolution authorizing the wind-up, drafted against a reviewed template and ready for the appropriate vote.
- A schedule of known debts and liabilities with a proposed settlement or provision for each, sequenced ahead of any distribution to equity holders.
- A creditor-notice package prepared to the statute where notice is required, with the response window tracked.
- The completed Certificate of Dissolution (stock corporation) or Certificate of Cancellation (LLC), prepared for filing with the Delaware Division of Corporations.
- An asset-and-distribution schedule showing what the company held, how it was disposed of, and what each equity holder received — the base data the final tax return is built from.


