7. Dissolution

Question 1

What is required for voluntary dissolution?

Answer 1

Corporate act

Incorporators/Initial Directors

1) Apply for dissolution before shares issued/business commenced (otherwise must may remaining assets after winding-up to SHs)
2) File Articles of dissolution to Secretary of State
3) Pay all corporate debts before dissolution

Question 2

What happens after voluntary dissolution?

Answer 2

1) Dissolution
2) Continue corporate existence
3) Carry on business (as appropriate during winding-up)

Question 3

What is required for judicial dissolution?

Answer 3

By Attorney General

• Corporation fraudulently obtained Articles
• Corporation abused its authority

By SHs

• Directors’ deadlock (SHs cannot break + irreparable injury to Corporation)
• Directors conducted fraud/illegal activity
• Directors misapplied assets
• SHs failed to elect Directors after at least 2 consecutive annual meetings + SHs’ deadlock

By Creditors

1) Insolvent Corporation
2) Unsatisfied judgment/Corporation admitted written notice re Creditors’ claim due