Process of Dissolving a Corporation
The first step in officially dissolving a corporation is the adoption of a corporate resolution to dissolve by the board of directors. A vote must be taken, and the minutes of the meeting must be recorded and retained in the corporate records. Once the resolution been approved by the board of directors, it must also be approved by a majority (in some cases two-thirds) of the corporation’s shareholders.
Asset Handling during Corporate Dissolution
In most cases of dissolution, a company’s remaining assets are distributed to its shareholders or members after paying off outstanding debts from the liquidation proceeds. The business may be wound up by a court-appointed receiver or trustee until all issues involving claims against it have been resolved.
Reasons for Corporation Dissolution
A corporation in Delaware is simple to establish and preserve. All it takes is a couple of minutes to complete an online order type. When a company is dissolved, it ceases to exist as a legal entity. Trade will stop, the company’s name will be removed from the Companies House register, and it will have no further filing requirements. Company directors may voluntarily dissolve a business if it is unsuccessful or cannot pay its debts. This involves winding up operations, liquidating assets, and repaying debts before dissolving. Companies are dissolved involuntarily if they fail to meet filing obligations. However, a company cannot always be dissolved, such as if it owes money or is subject to legal claims. When dissolved, the assets pass to the Crown. The causes for dissolution include having no debts, easily-paid debts, approaching retirement, or closing an unsuccessful business that has served its purpose.