INSTRUCTIONS FOR FILING A CERTIFICATE OF TERMINATION OF A DOMESTIC ENTITY OTHER THAN A NONPROFIT CORPORATION

(Form 651)

 

·         Commentary: When the owners, members or governing authority of a domestic filing entity have determined that the existence of the entity should terminate, or there is an occurrence of an event specified in the governing documents requiring the winding up, dissolution or termination of the domestic entity, the entity should follow the procedures for winding up the business and affairs of the entity in the manner provided in chapter 11 of the Texas Business Organizations Code (BOC) and in the BOC title governing the entity type. On completion of the winding up process, a filing entity must file a certificate of termination with the secretary of state.

 

This form should not be used if the domestic entity is a nonprofit corporation or a cooperative association. Form 652, which is available as an electronic filing, should be used to submit a certificate of termination for a domestic nonprofit corporation or a cooperative association.

 

·         Web Form: The web form promulgated by the secretary of state is designed to meet minimum statutory filing requirements and no warranty is made regarding the suitability of this form for any particular purpose. This form and the information provided are not substitutes for the advice of an attorney and it is recommended that the services of an attorney be obtained before preparation of the certificate of termination.

 

·         Execution: Pursuant to section 4.001 of the BOC, the certificate of termination must be signed by a person authorized by the BOC to act on behalf of the entity in regard to the filing instrument. Generally, a governing person or managerial official of the entity signs a filing instrument. Please note that a person commits an offense under section 4.008 of the BOC if the person signs or directs the filing of a filing instrument the person knows is materially false with the intent that the instrument be delivered to the secretary of state for filing. The offense is a Class A misdemeanor unless the person’s intent is to harm or defraud another, in which case the offense is a state jail felony.

 

·         Fee: The statutory fee of $40 must be submitted. Payments for web filings may be made by credit card or client account. Selection of the payment method is performed during the subscriber login process. Fees paid by credit card are subject to a statutorily authorized convenience fee of 2.7% of the total fees.

 

Client accounts must be funded a day in advance of submission of a filing. It is recommended that you use credit card as a payment method unless you have funds in the client account prior to the date of submission of the filing.

 

·         Certificate of Account Status: Please note that additional documentation is required in order to complete this filing. Attach certificate #05-305 from the Comptroller of Public Accounts indicating that all taxes under Title 2 of the Tax Code have been paid and that the entity is in good standing for the purpose of termination. A certificate of account status obtained from the Comptroller’s web site or a printout of the Comptroller’s web page does not satisfy the statutory filing requirements and cannot be used to file the certificate of termination. The appropriate tax certificate must be obtained directly from the Comptroller of Public Accounts.

 

Requests for certificates or questions on tax status should be directed to the Tax Assistance Section, Comptroller of Public Accounts, Austin, Texas 78774-0100; (512) 463-4600 or toll-free (800) 252-1381. You also may contact tax.help@cpa.state.tx.us.

 

·         To file a certificate of termination using SOSDirect:

 

1.      Logon and select the Business Organizations Tab.

2.      In the Change Documents frame below Web Filings, input the filing number, if you know it, for the entity for which you need to file the termination and click on File Document.

3.      If you do not know the file number, click on Find Entity.

a.       On the Find Entity Name Search screen, input the name of the entity for which you need to file the termination and click on Search.

b.      The search results will be returned showing the names of the entities that match or are very similar to your search parameter.

c.       Select the entity for which you need to file the termination by clicking on the radio button in the column entitled "Mark."

d.      If the entity for which you searched does not appear in the search results and you wish to conduct another search, click on New Search.

e.       When the appropriate entity is marked, click on Initiate Change Filing.

4.      After initiating the change filing, the next screen will include a drop down menu of the different types of change filings that may be filed on SOSDirect. Select "Certificate of Termination" and click Continue.

 

·         Governing Persons Screens: The name and address of each governing person of the domestic entity must be provided. The domestic entity must have at least one governing person. The table set forth below describes the governing persons for each entity type that may use this form.

 

Domestic Entity

Governing Person

For-profit Corporation or Professional Corporation

An individual serving on the board of directors. In the case of a close corporation that is managed by its shareholders, provide the name and address of each shareholder.

Professional Association

An individual on the board of directors or executive committee.

Limited Liability Company

A manager, if managers manage the company. If the company is managed by its members, provide each managing-member.

Limited Partnership

A general partner of the partnership.

 

·         To enter the name and address of each governing person, click on Add Person; then enter the name and address on the following screen. When completed, click on Update. A grid will appear with the information that you entered. If you need to enter additional governing persons, you do so by clicking Add Person. If you need to edit the information in the grid, click on the edit button opposite the governing person for which information needs to be edited. When you have completed the entry of the required information, press Continue.

 

·         Nature of Event Requiring Winding Up of the Entity: You must describe the nature of the event giving rise to the winding up of the domestic entity.

 

·         Pursuant to section 11.051 of the BOC, a domestic entity is required to wind up its business and affairs on the occurrence of an event requiring the winding up of the entity. The winding up of an entity is required:

1.      On the expiration of the entity’s period of duration, if not perpetual;

2.      After obtaining the requisite approval of a voluntary decision to wind up the domestic entity;

3.      On the occurrence of an event specified in the governing documents of the entity that requires the winding up, dissolution or termination of the entity;

4.      On the occurrence of an event specified in the Business Organizations Code that requires the winding up or termination of the entity; or

5.      On issuance of a decree by a court requiring the winding up or dissolution of the domestic entity.

 

·         Attachment Screen — Certificate of Account Status: A certificate of termination must be accompanied by a certificate of account status from the Comptroller of Public Accounts indicating that all taxes under Title 2 of the Tax Code have been paid and that the entity is in good standing for the purpose of dissolution/termination. Please note that the Comptroller issues many different types of certificates of account status. Do not attach a certificate or printout obtained from the Comptroller’s web site as this does not meet statutory requirements. You need to attach form #05-305, which is obtained directly from a Comptroller of Public Accounts representative.

 

·         Use the browse button to locate the image of the certificate you have stored on your computer. Attachments must be in TIF, TXT, or PDF file format to be accepted.

 

·         Execution Screen: Pursuant to section 4.001 of the BOC, the certificate of termination must be signed by a person authorized by the BOC to act on behalf of the entity in regard to the filing instrument.

 

·         A certificate of termination filed by a corporation should be signed by an officer (BOC § 20.001).

 

·         A certificate of termination filed by a professional association should be signed by an officer. If the association does not have any living officers, the certificate of termination should be signed by the legal representative of the last surviving officer of the association (BOC § 302.013).

 

·         A certificate of termination filed by a limited liability company should be signed by an authorized manager if the company has managers. If the company does not have managers and is managed by its members, an authorized managing-member must sign the certificate of termination.

 

·         A certificate of termination filed by a limited partnership must be signed by all general partners participating in the winding up of the limited partnership’s business (BOC § 153.553). If no general partners are winding up the limited partnership’s business, the certificate should be signed by all nonpartner liquidators or, if the limited partners are winding up the partnership’s business, by a majority-in-interest of the limited partners. The execution of a certificate by a general partner is an oath or affirmation, under a penalty of perjury, that to the best of the executing party’s knowledge and belief, the facts contained in the certificate are true and correct (BOC § 153.553(c)).

 

·         If the authorized person is a corporation or other legal entity, the document must be signed by an officer or authorized representative of such entity. Please provide the name of the person signing, the person’s title, and, if applicable, the person’s capacity. For example, John Doe, President of ABC Company, Managing-Member. Typing the name in the execution field satisfies the signature requirement.

 

·         Delayed Effective Date: The termination becomes effective when filed by the Secretary of State unless the entity specifies a delayed effective date on the Execution Screen. If a delayed effective date is desired, enter the delayed effective date in the box provided. The date may not be more than ninety (90) days from the date you are submitting the document. If a delayed effective date is selected, please ensure that the tax certificate attached is valid through the delayed effective date.

 

·         Document Display Screen: After entry of the signature and delayed effective date, if any, click Continue. An image of the electronic instrument will appear for your review. This instrument will include all information entered on prior screens as well as any other statements required by law. Read the information carefully. Make sure that you selected the correct entity for the termination and that the person signing has the capacity to sign the document.

 

·         If you need to make changes in the document, click the Edit Filing button at the top of the screen. Please note that secretary of state personnel cannot edit a submitted electronic document. Do not use the back button of your web browser for this purpose. You will be returned to all entry screens as well as the execution screen to correct the desired information.

 

·         When the document is correct in all respects, click the Submit Filing button at the top of the screen. If you wish to retain a copy of the displayed document image for your records, you may use the print function on your web browser.

 

·         The filing may be cancelled at any time prior to submitting by clicking on Cancel Filing.

 

After clicking on the Submit Filing button, you will receive a message confirming receipt of the filing that contains the session ID and the document tracking number of the document transmitted. You may wish to attach this receipt notice to your retained copy. This notice does not indicate that the filing has been approved by the secretary of state.