Fate of Assets of a Dissolved Company
- When a company is dissolved, its liabilities are usually extinguished. If the debt was not secured, the creditor will need to apply to restore the company to the register and bring legal proceedings against the restored company to recover any monies owed to it by the company.
Liquidation of Assets
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Liquidation refers to the process of sale or auction of the company’s non-cash assets.
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What happens to assets when you dissolve a corporation? 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.
Managing Company Debts During and After Dissolution
- When a company is dissolved, its debts do not automatically disappear. Creditors can still pursue unpaid debts, and directors and shareholders may be personally liable if the dissolution process is not handled properly.
Dissolving Company Debts
- Can HMRC Chase a Company for Debts After It’s Dissolved?
- What Action Can Creditors Take for Debts After a Company Has Been Dissolved?
Steps for Dissolving a Company
- The first step to begin the process of dissolution is to hold a board meeting and pass a resolution to dissolve the company. Once the shareholders approve the board decisions, you can file articles of dissolution. You must file this document in the same state where your company was incorporated.
What Happens After a Company is Voluntarily Dissolved
- If your corporation was involuntarily dissolved because of an administrative oversight, your state’s laws may allow you to “cure” the deficiency within a specified time period by filing certain documents with the secretary of state’s office and paying fees to reactivate the company.