How to Dissolve a Delaware Corporation in 2026: Short Form ($50) vs Standard ($224)

To dissolve a Delaware corporation, the board and stockholders approve a dissolution resolution, you pay franchise tax through the dissolution date with a final annual report, and you file a Certificate of Dissolution with the Division of Corporations. The standard filing is $224; a dormant corporation with no assets usually qualifies for the $50 short form. You then file IRS Form 966 within 30 days and a final Form 1120.

This is the process for the typical Stripe Atlas, Clerky or incorporator-formed C-corp that never raised money or has already wound its business down. Venture-backed companies with creditors, employees and preferred stock follow the same legal steps but need counsel for the liquidation mechanics.

At a glance

Approval: board resolution + majority of outstanding shares (DGCL 275), or unanimous written stockholder consent
State fee: $224 standard, $50 short form
Franchise tax: must be paid through the dissolution date, with a final annual report
Federal: Form 966 within 30 days; final Form 1120 (plus Form 5472 if 25%+ foreign-owned)
After filing: the corporation survives 3 years only to wind up (DGCL 278)

Step 1: Approve the dissolution

Delaware gives you two routes under DGCL Section 275:

Board + stockholders. The board adopts a resolution recommending dissolution, then holders of a majority of the outstanding voting shares approve it at a meeting or by written consent.
Unanimous stockholder consent. If every stockholder signs a written consent to dissolve, no board resolution is required.

For a solo founder who holds 100% of the shares, route 2 is one document. Date it. The adoption date triggers the 30-day clock for IRS Form 966 and is the "date of dissolution authorization" on the certificate.

If the corporation never issued shares or never started business, a different section (DGCL 274) applies: the incorporators or directors can dissolve with a simpler certificate. Check your cap table before assuming this; a founder who received shares on day one has issued shares.

Step 2: True up Delaware franchise tax

Delaware will not accept a Certificate of Dissolution from a corporation with unpaid franchise tax or unfiled annual reports. You must:

File any missing annual reports ($50 each) and pay the franchise tax for those years
File a final annual report for the current year and pay franchise tax through the date of dissolution

The minimum franchise tax is $175 under the authorized shares method (for up to 5,000 authorized shares) or $400 under the assumed par value method. A typical startup with 10,000,000 authorized shares owes the $400 minimum when it uses the assumed par value method, but owes a very large number under the authorized shares method; You can pay the lower of the two, but Delaware only calculates the assumed par value amount if you report your issued shares and total gross assets in the annual franchise tax report. Late filing costs $200 plus 1.5% interest per month.

Check the balance on the Division of Corporations' franchise tax portal with your file number before doing anything else. Back taxes are often the single largest cost of closing a forgotten corporation.

Step 3: Decide: short form or standard certificate

Delaware offers a short form Certificate of Dissolution for $50 if all of the following are true:

The corporation has no assets
It has ceased transacting business
For every year since incorporation it has been required to pay only the minimum franchise tax
All franchise taxes have been paid through the end of the year of dissolution

A dormant Atlas company with an empty bank account and nothing but founder common stock usually qualifies. Close the bank account (after reserving for final tax prep) and transfer any domain names or IP out first, because "no assets" means no assets.

Everything else files the standard Certificate of Dissolution for $224. Both certificates require the names and addresses of the corporation's directors and officers, the date the dissolution was authorized, and a statement that it was authorized under Section 275.

Step 4: File with the Division of Corporations

File by mail or through your registered agent. Standard processing is typically 2 to 3 weeks; expedited service is available at extra cost. The corporation is dissolved on the filing date unless you specify a later effective date.

Once filed, the corporation continues to exist for 3 years under DGCL 278 for winding-up purposes only: paying claims, defending suits, distributing remaining assets. It cannot sell products or sign new customer contracts.

Step 5: File IRS Form 966 within 30 days

Form 966, Corporate Dissolution or Liquidation, is due within 30 days after the dissolution resolution is adopted. Attach a certified copy of the resolution or stockholder consent. It goes to the IRS service center where the corporation files its Form 1120. Full walkthrough: IRS Form 966 explained.

Form 966 does not replace the final tax return and it does not close the EIN. It is an information notice that the corporation is liquidating.

Step 6: File the final Form 1120

File a final Form 1120 for the short tax year ending on the dissolution date, with the "final return" box checked. It is due the 15th day of the 4th month after that short year ends.

If 25% or more of the stock is owned by a non-US person or foreign company, attach a final Form 5472 for each foreign related party. The penalty for a missing 5472 is $25,000.

If the corporation had payroll, file final Forms 941 and 940 and issue final W-2s. If it made payments to contractors, issue final 1099s.

Dormant corporations with no income still file. "Zero activity" is reported on a return, not by silence.

Step 7: Close the EIN and distribute what is left

After the final return, send the IRS an EIN closure letter: how to cancel an EIN. Distribute any remaining cash to stockholders in liquidation, in accordance with the certificate of incorporation (preferred stock first, if any). Keep all records for 7 years.

Common mistakes

Filing with Delaware and forgetting the IRS. The state side is three documents; the IRS side is Form 966, a final 1120 and the EIN letter. Most penalties come from skipping the second half.
Using the authorized shares method by accident. A 10,000,000-share startup can see a five-figure franchise tax bill on the portal. Recalculate under the assumed par value method.
Filing the short form with assets still in the corporation. A domain name or a $50 bank balance technically disqualifies it. Clear everything first.
Dissolving in January instead of December. A certificate filed in early January triggers another year's annual report and a prorated franchise tax. If the decision is made in Q4, file before December 31.

Frequently asked questions

What is the Delaware short form certificate of dissolution?

A $50 filing for corporations with no assets, that have stopped doing business and have only ever owed the minimum franchise tax. Most dormant founder-owned startups qualify.

Do I need stockholder approval?

Yes. Board resolution plus a majority of outstanding shares, or a unanimous written stockholder consent.

Do I pay franchise tax for the year of dissolution?

Yes, through the dissolution date, with a final annual report filed alongside the certificate.

Is Form 966 required?

Yes, within 30 days after the resolution is adopted, with the resolution attached.

How long does a dissolved Delaware corporation exist?

Three years, for winding up only, under DGCL 278.

Close your Delaware corporation in one pass

CloseWise prepares the stockholder consent, calculates the franchise tax true-up, files the right certificate (short form when you qualify), prepares Form 966 and the EIN closure letter, and has the final Form 1120 prepared by a licensed preparer. Start your closure or estimate the cost.