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The dissolution is initiated by a resolution by the board of directors who submit it at a meeting of the shareholders. The shareholders each vote and if the resolution is approved, the directors have the authorization to proceed with the dissolution process.
It is required to file form 966 within 30 days of closing the corporation. This form can be prepared by the attorneys filing the dissolution documents. However, as this is a requirement of closing, it is important to file with the IRS.
Before a company can be dissolved, shareholders will need to have a vote, and a 50 percent vote of shares is required to dissolve a corporation voluntarily. The voting can occur at a shareholders meeting or simply be done by filing written consent.
Corporation Filing Requirements (Includes S Corporations) You must file Form 966, Corporate Dissolution or Liquidation, if you adopt a resolution or plan to dissolve the corporation or liquidate any of its stock. You must also file your corporation's final income tax return.
There is no direct Form 966 penalty for non-filing or late filing, but by not properly notifying the IRS of a dissolution or liquidation, it may result in collateral damage and other penalties.