The corporate existence of a corporation registered with the State of California can be ceased in two ways:
Each way of dissolution has its grounds and specific legal procedure. While a corporation may be involuntarily dissolved under a court decree, the voluntary dissolution is carried out by a corporation’s shareholders, as well as in special cases by the Board of Directors. Leaving the topic of involuntary dissolution for a separate discussion, the voluntary dissolution will be addressed within this article.
The Corporations Code of California, chapter 19, sections 1900-1907, covers the legal regulations pertaining to the procedure of voluntary dissolution. These rules help an interested person to comply with the requirements of the law in the process of voluntary dissolution.
In general, the voluntary dissolution may be initiated by:
Shareholders may dissolve their corporation for a variety of reasons. In this regard, they are not accountable to anyone else. The decision to wind up and dissolve the corporation should be made by the vote of shareholders holding shares representing 50% or more of the voting power unless a higher threshold is prescribed for by the articles of incorporation. Whereas, the board of directors may approve to wind up and dissolve a corporation which comes within one of the following descriptions:
Once the resolution on a voluntary dissolution is in place, the corporation steps into the stage known as “winding up”. This is aimed at finalizing the debt-clearance process. It assumes paying outstanding debts and discharging pending liabilities. Afterwards, the corporation resolves the issue of distributing the remaining assets to the shareholders entitled thereto.
The corporation is required to notify its creditors about commencing dissolution enabling them to submit their claims to the corporation. Such notification shall include all the relevant information necessary for sending claims, for instance the mailing address, the deadlines for submission etc.
Further, you need to file a certificate of dissolution with the Secretary of State (SOS). The certificate of dissolution shall include the following information:
The form of the certificate can be found in the official website of SOS. The certificate must be submitted by via email or in person. Thereupon the corporate powers, rights, and privileges of the corporation ceases. The Secretary of State notifies the Franchise Tax Board of the dissolution.
If you need to initiate and finalize the process of a voluntary dissolution of your corporation, we invite you to contact an attorney at KAASS LAW at (310) 943-1171 and speak to our Glendale business attorney to assist with the process.
Truck accidents, often resulting in serious injuries and fatalities, have a profound impact on road safety. Preventing truck accidents is…
In the world of transportation, the trucking industry serves as a backbone for the movement of goods across the country.…
Truck accidents can have horrific results, including serious injuries, fatalities, and substantial legal repercussions. A number of well-known truck accident…
With its ability to move cargo over long distances and maintain the flow of the supply chain, the trucking industry…
Since we share the road with an increasing number of commercial trucks, it becomes imperative to understand the challenges faced…
Truck accidents are not just confined to traffic regulations. They often traverse into the complex territory of criminal liability. Understanding…