This is a tutorial of how we shut down our NYC NimbusBase which is a Delaware C-corp after 2 years of operation. We did not use accountants during our years of operations, and used instead (which everyone should use regardless if you have an accountant) as it’s much cheaper, more efficient, and makes less mistakes. startup Quickbooks I think there are many confusion from tech startup founders on legal and tax aspects of a business, I wanted to write a guide for people in the same situation as me. Think of this as an algorithm for shutting down a corporation. First of all, there are 3 entities you are responsible to report to when you are shutting down: State you incorporated in (For most this is Delaware) State you operate in (For us this was New York) IRS, federal government I. Shutting down in as a Delaware corp There are two things you need to do to shut down as a Delaware corporation: Pay up your franchise tax for the previous year and the current year File a dissolution document with the state If you haven’t paid your franchise tax to Delaware for the previous year, you can go to this website to do it. https://delecorp.delaware.gov/eCorp/LoginAnnualReportsCLF An important note is that if you have a lot of shares issued and a early stage asset amount (at shutdown you probably do), the is much better than the for calculating the cost. Authorized Par Value method Authorized shares method The more annoying thing is to pay the the state of Delaware for the current year’s franchise tax which you cannot do online. I handled it by: Calling the Delaware division of corporations at (302) 739–3073, press their departments to reach the one for Franchise tax and press 0 to talk to a real person. They will give you a form with your current year’s franchise tax estimates. The fastest way to get this is for them to send this to you as a tif file in an email. They will only do this in a Authorized share method, so you have to amend it for a much lower payment. You can use to change it to a PDF and then modify it in Acrobat by filling out the gross asset and crossing out their estimate to replace the fee with the Authorized Par value fee. http://converttifftopdf.com/ Take both your modified form and your check for this year’s franchise fee and mail it in with your dissolution form Filing a dissolution form is easy, just get the appropriate form from here: and fill it out and then send it in with your check. http://www.corp.delaware.gov/disso09.shtml Total cost for us: 350 (2014 franchise tax) + 50 (2014 franchise tax filing fee) + 350 (2015 franchise tax) + 50 (2015 franchise tax filing fee) + 204 (dissolution filing fee) = $1004 The above cost serves as a good floor cost for a Delaware dissolution. II. Shutting down in NY state When running our business, our main form to NY State was our quarterly payroll tax form, . Theoretically, we just needed to mention this was a final return on our form. NYS 45 However, since we are shutting down on 1/31/2015 and the form didn’t come out till neat the end of the quarter, you have to wait to do so and then file. III. Informing the IRS With the IRS you need to do 2 things: File taxes for your corporation for the previous year and the current year. Send in a dissolution notice, form 966 When sending in your 940, mark that it is the last one and fill in your last work date Filing your taxes is an annoying tasks since you need to wait till tax season to do this last years. And for your current year, you need wait for one year after. Conclusion There are tons of knowledge on operating and starting a startup, but very little on shutting it down. Accounting and legal are expensive aspects of running a business, and using and doing stuff on our own allowed us to bootstrap more and spend more budget on programmers and product dev. QuickBooks Shutting down your business is tedious but completely do-able for yourself. Please comment if you have anything to add or sees anything wrong with this.