Many business owners think that once all final tax filings have been made, the IRS will automatically close or discontinue the entity’s EIN, but just as the title of this article implies the EIN for the business is never discontinued, reassigned or reused. Regardless of whether or not an EIN was ever used, the number is PERMANENT. An EIN cannot be canceled by the IRS; however, the business account associated with the EIN may be closed. If the EIN is needed in the future, it will still belong to the business entity even after the account is closed.

To close a business account with the IRS, a written letter is required to be sent to: Internal Revenue Service, Cincinnati, OH 45999.  The letter must state the reason for closing the account and include the EIN, the complete legal name of the entity, and the business address. If a copy of the EIN Assignment Notice is available, be sure to include it with your letter. For entities that are deemed liable for business taxes or have been notified that business tax returns are due, the appropriate tax returns will need to be filed before the EIN account can be closed. To be absolutely sure that all necessary filings have been made to close your business with local, state, and federal tax agencies, Harvard Business Services strongly suggests that you seek the assistance of a qualified tax professional.

When the company was originally filed, a Certificate of Formation/Incorporation was submitted to create the new entity. The company is actually born at the time of filing. I like to think of that document as the birth certificate for the LLC or Corporation. When it comes time to close down the entity, once again a document is filed with the Division of Corporations. The proper document for the closing of a Corporation is called a Certificate of Dissolution, while the filing is called a Certificate of Cancellation for an LLC. You can think of this as the death certificate.

How can we help you close your company?

We make the process of closing your company as simple as possible. All you need to do is call or email us and we’ll take it from there. We can prepare and file all the necessary documentation for you. Before we can proceed with the filing of the documents all franchise taxes must be paid, including the current year. HBS will prepare a Certificate of Cancellation or Certificate of Dissolution for your signature, and forward it to you via fax or email. It must be signed by the Authorized person of the LLC or an appropriate officer of the Corporation. Once signed, simply return it to us by fax or email. The Certificate will be filed with the State of Delaware within 24 hours.

The State typically takes 3-5 business days to return the receipt of filing. As soon as the approved document is available we will forward it to you for your records. We strongly suggest that clients speak with their accountant/tax professional first before proceeding with the cancellation/dissolution. Once the filing is approved it is difficult to undo the filing.

If your company has a bank account you should close the account before filing the Certificate of Cancellation/dissolution. If you have filed taxes with the IRS you will need to file a closing tax return AFTER filing the Certificate of Cancellation/Dissolution and attach a Certified Copy of the Certificate of Cancellation/Dissolution to your final tax return.

Please call us at 1 (800) 345-2677 or email info@delawareinc.com for more information on this subject. We are here to assist you in closing your company, and we’ll get you into a new company right away, if you need one.