If you are shutting down your startup, the filings and emails you send on the way out matter just as much as the ones you sent on the way in. It is not enough to stop operations, close Slack, and turn off Stripe. Until you file the right business dissolution documents, your company still exists in the eyes of the state, the IRS, your bank, and sometimes even your vendors. That is how “dead” startups keep getting franchise tax notices years later.

This article walks through the key documents you need to properly dissolve a US startup. We’ll talk about state forms like Articles or Certificates of Dissolution, IRS paperwork such as Form 966 and final returns, creditor and stakeholder letters, tax clearance proofs, foreign withdrawal forms, and more. 

Think of it as a practical list you can use as a checklist: what each document does, who it goes to, and where it fits in the shutdown sequence, so you can close the company cleanly and move on to your next build without loose ends.

Here’s a clean, high-level view of the documents you’ll work with during a startup shutdown. 

Now, let’s cover each category and document in detail:-

Category 1 - Core Corporate Dissolution Documents 

These are the primary documents every US startup needs to prepare during dissolution, regardless of whether you’re structured as a Delaware C-Corp, S-Corp, or LLC. Each of them serves a specific legal purpose, and missing even one can keep your entity active on state or federal records.

i) Certificate of Dissolution (State-Issued)

Once your dissolution filing is approved, the state issues a Certificate of Dissolution confirming that your startup no longer exists as a legal entity. Banks, payroll providers, payment processors, and even landlords may ask for this as proof that the company has been formally closed. It includes details such as your entity name, formation date, dissolution approval method, and the state seal making it the final confirmation that you’re done.

ii) Articles or Certificate of Dissolution (Filed by the Startup)

This is the document you file with the Secretary of State to formally end the company. It typically includes the entity name, date of incorporation, how dissolution was approved, and who is authorized to sign. 

Each state’s version is slightly different. Delaware requires a simple certificate under Section 275, while New York requires additional officer information and sometimes tax clearance proof. Once approved, this filing is what triggers the state to terminate your entity.

iii) Board or Shareholder Resolution to Dissolve

Corporations must document internal approval before they dissolve. This written resolution records how the decision was made (board vote, shareholder vote, or both), and authorizes officers to sign and file dissolution paperwork. Investors and auditors sometimes request this record years later, so founders should keep it with corporate documents even after the shutdown.

iv) Statement of Dissolution / Statement of Intent to Dissolve

Some states require a preliminary notice that your company has started the wind-up process. States like Minnesota and Washington use this document for LLCs to establish the official start date for winding up. 

It outlines who approved the shutdown, why the company is dissolving, and the effective date for beginning the end-of-business steps. It doesn’t terminate the company on its own; it simply signals that the process has begun.

Category 2 - IRS Documents Required for Dissolving a US Startup

When founders think about shutting down a company, state filings usually come to mind first but the IRS steps are just as important. If you don’t close out your federal obligations properly, your company remains open in IRS systems even after the state dissolves it. 

These are the core IRS documents you must complete during dissolution:-

i) IRS Form 966 (Corporate Dissolution or Liquidation)

https://www.irs.gov/pub/irs-pdf/f966.pdf

Corporations, both C-Corps and S-Corps, must file Form 966 within 30 days of adopting the resolution to dissolve. This form tells the IRS that your corporation has formally approved a shutdown. It includes basic details like the date of the dissolution vote, the corporate structure, and the plan for liquidation. LLCs do not file Form 966 unless they are taxed as corporations.

ii) Final Federal Tax Returns

Every startup must file a final federal tax return for the year it dissolves. What that return looks like depends on how your entity is taxed:

• C-Corp: Form 1120 (marked “final return”)
• S-Corp: Form 1120-S (marked “final return”)
• Multi-member LLC: Form 1065 + final K-1s
• Single-member LLC: Schedule C (or the return of the owner, depending on structure)

If the startup sold assets during winding up, the sale must also be reported usually on Form 4797. These filings close your federal tax accounts and prevent IRS notices from showing up long after the company is gone.

iii) EIN Closure Letter

After all returns are filed and accounts are cleared, you send a letter to the IRS requesting that the business account associated with your EIN be closed. EINs are never truly “canceled,” but the IRS marks the account inactive so it no longer expects filings from your startup. 

This letter includes your company name, EIN, address, reason for closure, and confirmation that all required returns have been submitted.

Category 3 - Documents Needed for Paying Debts, Notifying Creditors, and Winding Up Affairs

Once you’ve initiated dissolution, you need a clear paper trail showing how the company settled debts, communicated with stakeholders, and wrapped up operations. These documents protect the startup, and the founders from future disputes, missing claims, and compliance issues.

i) Dissolution of Business Letter

Startups must formally notify creditors, vendors, partners, employees, banks, and sometimes customers that the business is shutting down. The letter usually includes your company name, EIN, official dissolution date, reason for closure, and instructions for submitting any outstanding claims. 

Some states expect founders to publish a version of this notice in a newspaper and keep an affidavit as proof. Sending these letters by certified mail creates a record you can rely on if a dispute arises later.

ii) Final Payroll and Employment Documents

https://www.irs.gov/pub/irs-pdf/f941.pdf

Even if your team has already been let go, the paperwork must still be completed properly. This includes final paychecks, final W-2s and 1099s, and your last employment tax filings (Forms 941 and 940). Some states require specific termination notices as well. Keeping these records ensures you can close payroll accounts with your provider and with the IRS.

iii) Asset Distribution Records

After debts are paid and obligations cleared, any remaining assets or cash must be distributed according to your cap table or operating agreement. Documentation here matters because investors, auditors, or future co-founders may request proof of how assets were handled. These records can include asset sale summaries, distribution schedules, and allocation agreements for founders and shareholders.

iv) Loan and Contract Termination Letters

Startups often forget how many contracts they signed along the way. The list could include SaaS tools licenses, office leases, bank lines of credit, vendor agreements, and insurance policies. Each one needs to be formally terminated. 

Termination letters document the date the contract ends, any outstanding obligations, and mutual release of further claims. Keeping these letters helps avoid accidental renewals or recurring charges.

Categroy 4 - Additional State-Level Documents and Clearances

Beyond federal filings and internal records, states have their own requirements for dissolving a startup. Some of these documents are mandatory everywhere, while others depend on where your company is registered or where you operated. 

These filings ensure the state acknowledges your shutdown and confirms you don’t owe ongoing taxes or fees:-

i) Tax Clearance Certificate

Several states won’t let you dissolve until you prove you have no outstanding taxes. This is where a tax clearance certificate comes in. States like New York, New Jersey, Illinois, and Pennsylvania require clearances before accepting dissolution paperwork. 

The document is issued by the state’s tax authority and confirms your startup doesn’t owe corporate income tax, sales tax, payroll tax, or franchise tax. Without this certificate, your dissolution filing may be rejected or delayed.

ii) Certificate of Withdrawal (for Foreign-Qualified States)

If your startup registered to operate in states outside its home state, for hiring, sales, or compliance, you need to dissolve in those states as well. This is done by filing a Certificate of Withdrawal or equivalent form. 

Each state treats foreign registration as a separate entity, so even after you dissolve in Delaware, for example, you must withdraw in every additional state individually. Missing this step is one of the most common reasons founders receive unexpected fees after shutting down.

iii) Business License and Permit Cancellation Forms

Cities and counties often require separate business tax registrations or operational permits. These don’t close automatically when you file state dissolution paperwork. Instead, you must cancel them directly with local agencies. This prevents annual renewals or late notices long after the company has stopped operating.

Why Startups Choose Inkle to Manage Dissolution

Managing dissolution documents is one of the most detail-heavy and timing-sensitive parts of shutting down a startup. You’re dealing with state forms, IRS filings, foreign withdrawal paperwork, creditor notices, payroll obligations, tax clearance steps, and a long list of documents that must be completed in the right order. Missing even one requirement can delay the shutdown or trigger penalties months later.

This is where Inkle simplifies everything for founders. Instead of juggling lawyers, accountants, state portals, and spreadsheets, you get one platform that handles every document in the dissolution process from the initial board resolution to the final Certificate of Dissolution. Inkle ensures that forms are filed on time, notices go to the right stakeholders, and every state where you operated is properly closed.

Here’s how Inkle supports founders with dissolution paperwork:

• It prepares and files all dissolution documents in the correct sequence, so you don’t accidentally file something too early or too late.
• It manages multi-state withdrawals, a major blind spot for startups that registered in multiple states for hiring, compliance, or remote workers.
• It organizes creditor notices and proof of delivery, which many founders forget until claims and deadlines get complicated.
• It coordinates final federal and state tax filings, ensuring Form 966, final returns, and payroll forms are handled without you dealing with the IRS directly.
• It maintains one complete dissolution file containing resolutions, filings, approvals, notices, and certificates in a format that’s easy to reference later.
• It reduces the need for multiple advisors, because legal filings, tax steps, and state paperwork are handled in a single workflow.

If you want help preparing and filing dissolution documents, or need support with multi-state closure, feel free to book a demo with Inkle.

Frequently Asked Questions

Which documents officially terminate a US startup with the state?

The key document that legally ends your company is the Articles of Dissolution (LLCs) or Certificate of Dissolution (corporations) filed with the Secretary of State. Once approved, the state issues a State-Issued Certificate of Dissolution, which serves as the final proof that your entity no longer exists.

Do all startups need IRS Form 966 during dissolution?

Only corporations - C-Corps and S-Corps, must file IRS Form 966. It notifies the IRS that shareholders have approved the shutdown. LLCs do not file Form 966 unless they elected to be taxed as a corporation.

Which dissolution documents must be shared with investors?

Most investors expect copies of the board or shareholder resolution, Articles/Certificate of Dissolution, asset distribution records, and the final federal tax return (or at least confirmation that it was filed). These documents support their own tax reporting, especially capital loss filings.

Do I need a tax clearance certificate before filing dissolution documents?

It depends on the state. Some states like New York, New Jersey, Illinois, Pennsylvania, and Texas (for certain entity types) require tax clearance before accepting dissolution paperwork. Other states don’t require it but still expect all taxes to be fully paid before closing the entity.

Which documents must be sent to creditors during the dissolution of a startup?

Creditors, vendors, and banks receive a Dissolution of Business Letter. It includes your shutdown date, instructions for submitting claims, response deadlines, and contact information. Some states require a public notice as well, and founders must keep proof of publication.

What documents do I need to close payroll and employment accounts?

You must file final W-2s, 1099s, quarterly Form 941, annual Form 940, and any state-level payroll tax forms. These documents confirm that payroll is fully closed and allow the IRS and state agencies to deactivate your employment accounts.

How does a startup document asset distribution during dissolution?

Founders need a clear record of how remaining cash or assets were distributed after paying debts. Asset distribution records typically include a distribution schedule, asset sale summaries, and proof of transfers. Investors often request these documents for their personal tax filings.

Do I need separate dissolution documents for other states where my startup was registered?

Yes. If your company was foreign-qualified in multiple states, you must file a Certificate of Withdrawal (or equivalent form) in each state. Dissolving in your home state does not close out-of-state registrations, and failing to file these forms results in ongoing fees and compliance notices.

What documents are required to close the EIN for a dissolved startup?

Once all tax filings are complete, you send an EIN Closure Letter to the IRS. The letter includes your EIN, business name, address, shutdown date, and confirmation that all returns have been filed. This closes the business account associated with your EIN.