Vote on whether to terminate the corporation. Shareholders are required to approve major transactions such as cancelling an incorporation. You will probably need to call a special shareholder’s meeting for the vote. Your corporation's bylaws typically establish how many votes are required to cancel corporate status.
Wind down the business activity. Corporations typically have ongoing responsibilities that must be completed before the corporation can be terminated. Pay all outstanding corporate liabilities with corporate funds and complete all outstanding business orders.
File your final corporate tax return. The corporate tax return is Form 1120. Check the “final return” box in item E of the Form.
Cancel your corporation’s Employer Identification Number (EIN). Send a letter stating your reasons for cancelling your EIN to Internal Revenue Service.
File the appropriate documents to dissolve the corporation in the state where you incorporated. Comply with the corporate dissolution process of the state where you are incorporated. Generally, you must file articles of dissolution with the Secretary of State.
Divide the remaining corporate assets among the shareholders. Be sure that all outstanding corporate liabilities and debts have been paid off first. The assets should be distributed based on the amount of stock owned by each shareholder.