Thinking about shutting down your U.S. startup? Don’t just walk away. If you don’t close it properly, with the state and the IRS, you could face years of surprise tax bills, penalties, and blocked access to financial platforms.
In this guide, we’ll walk you through the key legal steps, tax requirements, and timelines to avoid trouble later.
👉 Many founders find out years later, when they’re raising for their next startup, that they owe thousands because they skipped these steps.
Here’s what every founder needs to complete to properly dissolve a C-Corp or LLC:
C-Corps require a formal board and shareholder vote to approve dissolution. Keep written records, especially if investors are on your cap table.
Submit dissolution documents with the state where your entity is registered.
Don’t forget to cancel local business licenses, permits, and your EIN (with IRS Form 966 if applicable).
Legally, you must inform all known creditors and vendors, giving them time to submit final claims.
If you have remaining funds or IP, distribute them according to your operating agreement or cap table. Keep everything documented.
This is where things go wrong for most startups. Even if your company made no money, you’re required to submit a final tax return.
Depending on your entity:
📅 Deadlines:
Failure to properly dissolve a U.S. entity leads to:
Even if you don’t plan to launch again soon, this can haunt you later.
We’ve helped over 100 LATAM founders close their U.S. startups properly, avoiding fines, clearing tax risk, and doing it fast.
With Lazo, we:
We make sure there are no loose ends so your future fundraising or re-incorporation isn’t affected.
Shutting down a business doesn’t mean failure, it’s part of the startup journey. What matters is doing it right. Don’t let unresolved paperwork follow you into your next venture.
👉 Book a free session with our team, we’ll help you dissolve your entity, file the right documents, and stay penalty-free.