If your corporation is considering ending all activity, you may want to consider filing a dissolution. We've created this post outlining the basics behind corporate dissolution to help you gain a basic understanding of your options.
What is a Dissolution?
A dissolution is the statutory procedure that terminates the existence of a domestic corporation.
What are the different types of Dissolutions?
There are 3 different types of dissolutions:
An Administrative Dissolution is the involuntary dissolution of a corporation by an act of the Secretary of State or similar state authority, caused by the corporation's failure to comply with certain statutory requirements. This frequently occurs when corporations fail to file an annual report, to pay franchise taxes or maintain a valid Registered Agent.
A Voluntary Dissolution is an intentional action by shareholders, incorporators or initial directors to dissolve a corporation.
A Judicial Dissolution is an involuntary dissolution ordered by a court of law.
What happens during a Dissolution?
During dissolution, all activities of the corporation are ended, which is frequently called “winding up.” Winding up refers to the discharging of a corporation's liabilities and the distributing of its remaining assets to its shareholders in connection with its dissolution.
What’s required to file a Dissolution?
Dissolutions require an officer, director or member of the company to file a Certificate of Dissolution or Certificate of Cancellation after getting shareholder or member approval. To obtain one, your corporation must be in good standing, with all required taxes paid and all annual reports filed with the state.
If you have any questions regarding dissolutions, don't hesitate to call our incorporation specialists by dialing 1.800.421.2661!