Dissolution & Winding Up

Question 1

Dissolution and Winding Up

Answer 1

Dissolution: A corporation may voluntarily terminate its status.

Winding Up: A dissolved corporation may continue to exist for the limited purpose of winding up its affairs and liquidating its business.

• Distribution
  
  • Upon dissolution, corporate assets must be distributed in the following order:
    
    1. Creditors of the corporation
    2. Shareholders of stock with preferences in liquidation
    3. Other remaining shareholders of stock

Editor’s Note 2: Professional Responsibility is not tested on the UBE.