Acquihired or Sold the Assets? How to Close the Company That's Left (2026)

After an acquihire or an asset sale, your original company is still there. The buyer hired the team or bought the assets, not the stock, so the old entity keeps its EIN, its state registration, its stockholders and investors, and every liability the buyer did not take on. It also keeps owing franchise tax and annual returns until it is formally dissolved. Closing it properly means approving the dissolution, reporting the sale, paying the final state tax, providing for creditors, paying investors and stockholders in the right order, and filing the final returns.

This guide assumes the most common case: a Delaware C-corporation. Where an LLC differs, it says so. This is general information, not legal or tax advice; investor documents and taxes for non-US stockholders need your counsel.

At a glance

What is left: the entity, its EIN, its state filings, the bank account holding the proceeds, the cap table and any liabilities the buyer did not assume
Approvals: the board, then holders of a majority of the outstanding stock
Federal forms: Form 8594 for the sale, Form 966 within 30 days of the dissolution plan, the final Form 1120, and Form 1099-DIV for liquidating distributions of $600 or more
State cost: the final franchise tax, then the $224 Delaware Certificate of Dissolution
Payout order: creditors first, then convertible notes, then SAFEs and preferred stock, then common stock, subject to your documents

What is left after the deal

In a merger or stock sale, the company becomes a subsidiary of the buyer and the buyer runs it. In an asset sale or acquihire it does not. What remains:

The company, its EIN and its Delaware registration, including the duty to keep a registered agent
The bank account, usually holding whatever the buyer paid the company
The cap table: common stockholders, preferred investors, SAFE and note holders, and option holders
Contracts and liabilities the buyer did not assume
Payroll and state tax accounts, now without employees, because the team moved to the buyer

What it costs to leave it open

A Delaware corporation owes its annual franchise tax and a $50 annual report by March 1 every year, at least $175 or $400 depending on the method. Late payment adds a $200 penalty and 1.5% interest a month, and after a year unpaid Delaware declares the charter void. If the registered agent resigns and no new one is named within 30 days, Delaware forfeits the charter.

The IRS still expects a Form 1120 every year, whether or not the company has income. A corporation that is at least 25% foreign-owned also files Form 5472, and missing it costs $25,000 per form. A Delaware LLC owes its $400 annual tax instead. More on the cost of walking away: what happens if you don't dissolve.

Step 1: Approve the sale and the dissolution

Delaware requires the sale of all or substantially all of a corporation's assets to be approved by the board and by holders of a majority of the outstanding stock. Dissolving the company takes the same two approvals: a board resolution, then a majority of the outstanding stock entitled to vote. Stockholders can act by written consent instead of a meeting, unless the charter says otherwise; those who did not sign must be notified promptly.

Read the charter before you sign. Many venture-backed charters treat a sale of substantially all assets as a deemed liquidation event, which gives preferred investors rights to the proceeds and sometimes a deadline to dissolve.

Step 2: Report the sale

The corporation reports its gain on the asset sale on its Form 1120, and the stockholders are taxed again when the money is distributed. Both the buyer and the seller generally file Form 8594, the Asset Acquisition Statement, with their return for the year of the sale. If the price changes later, for example through an earnout, a new Form 8594 is filed for that year.

Step 3: File Form 966 within 30 days

When the board and stockholders adopt the plan to dissolve, the 30-day clock for Form 966 starts. It tells the IRS the corporation is liquidating; for a complete liquidation, line 10 is usually section 331. It is not the final return. See IRS Form 966 explained.

Step 4: Pay the final franchise tax and file the certificate

Delaware files a certificate of dissolution only after every tax due through its effective date is paid, including a final annual franchise tax report. Tax keeps accruing until the filing is accepted, so file once the money is ready. The standard Certificate of Dissolution costs $224. The $50 short form is for corporations with no assets, so a company holding sale proceeds rarely qualifies. Details in how to dissolve a Delaware corporation.

Step 5: Provide for creditors before paying out

A dissolved Delaware corporation continues for three years to wind up, but not to run the business. In that time it must pay or provide for its claims before distributing anything. Delaware offers two routes:

The court route (section 280): notify known claimants, publish notice, give them at least 60 days to claim, then ask the Court of Chancery to set security for the rest
The plan route (section 281(b)): adopt a plan of distribution that sets aside enough, reasonably likely to be sufficient, for pending claims and for claims likely to arise within 10 years

Directors who follow either route are protected from personal liability to claimants. Directors who skip both lose that protection. A stockholder who later has to return money owes no more than their share of the claim or what they received, whichever is less.

Step 6: Pay investors and stockholders in the right order

What each holder receives comes from the charter, the SAFEs and any notes, so read them first. The usual order:

Creditors, including taxes, final payroll and anything reserved in Step 5
Convertible notes, which are debt
SAFEs and preferred stock, which rank together. Under Y Combinator's post-money SAFE, a sale of substantially all assets is a liquidity event, paying the greater of the purchase amount or the conversion amount; a dissolution pays the purchase amount.
Common stock, which gets what is left

Report each liquidating distribution of $600 or more on Form 1099-DIV: cash in box 9, other property in box 10. For stockholders, a liquidating distribution is tax-free until it recovers their basis in the stock and is a capital gain after that. Withholding and reporting for stockholders outside the US follow different rules, so plan those with a tax adviser before paying out.

Step 7: File the final returns and close the accounts

Final Form 1120: check the final-return box; it is generally due by the 15th day of the 4th month after the dissolution, with Form 8594 for the year of the sale and Form 5472 if the corporation is 25% or more foreign-owned
Payroll: a final Form 941 or 944 with the closed box checked, a final Form 940, and W-2s for the last employees. Unpaid withheld payroll taxes can fall on the responsible officers personally.
State accounts: close payroll and sales tax registrations in every state where the company registered
EIN: send the EIN closure letter after the final return is filed
Bank: close it last, after the final payments and payouts; see how to close a business bank account

Mistakes that cost money later

Assuming the buyer closed the company. In an asset deal or acquihire, nobody closes it unless you do.
Missing the 30-day Form 966 deadline after the dissolution plan is adopted.
Forgetting the final year of franchise tax. Delaware accrues tax until the dissolution is accepted.
Letting the registered agent lapse. Delaware forfeits the charter, which makes a clean dissolution harder.
Paying out before providing for claims. It removes the directors' protection.
Closing the bank account too early, before escrow, earnout or refund money arrives.
Skipping the final Form 5472 for a foreign-owned company. The $25,000 penalty applies to the final year too.

How long it takes

Form 966 is due within 30 days of the plan, and the court route gives claimants at least 60 days. The final Form 1120 is generally due about three and a half months after dissolution. With investor approvals and payouts, most post-sale wind-downs take a few months. Delaware gives the dissolved company up to three years to finish winding up.

Frequently asked questions

Does my company disappear after an acquihire or asset sale?

No. When the buyer hires the team or buys the assets but not the stock, the original company keeps existing, with its EIN, state registration, stockholders and any liabilities the buyer did not take on. It keeps owing franchise tax and annual returns until it is formally dissolved.

Do we pay Delaware franchise tax for the year we dissolve?

Yes. Delaware files a certificate of dissolution only after all taxes due through its effective date are paid, including a final annual franchise tax report. Tax keeps accruing until the filing is accepted.

Can we use Delaware's $50 short-form dissolution?

Usually not. The short form is for corporations with no assets, and a company that just sold its assets normally still holds the proceeds. The standard Certificate of Dissolution costs $224.

What do SAFE holders get when the company is wound down?

It depends on the documents. Under Y Combinator's post-money SAFE, a sale of substantially all assets counts as a liquidity event, and a dissolution entitles the holder to its purchase amount. SAFEs rank behind debt, alongside preferred stock and ahead of common stock. Check your own SAFEs with counsel.

Who files Form 8594?

Generally both the buyer and the seller, each attached to their income tax return for the year of the sale. A new Form 8594 is filed for any year in which the price changes, for example because of an earnout.

Close what the deal left behind

CloseWise handles the leftover company after a sale: the Delaware filings, Form 966, the final returns with a licensed preparer, the EIN closure and the order of payouts, coordinated with your counsel and investors. Start your closure.