Termination of Corporate Status

Question 1

Voluntary dissolution- before stock is issued

Answer 1

Incorporators or initial directors may sign a resolution of dissolution

Question 2

Voluntary dissolution- after stock has been issued

Answer 2

1. Board adopts proposal for dissolution of C, and
2. SH approve or all SH consent to dissolution even without board proposed dissolution

Must have approval of each voting group by more than 2/3 of all votes entitled to be case unless the articles state otherwise

Question 3

Winding up

Answer 3

The dissolving Continues to exist and collect assets, dispose of property not distributed to shareholders, discharge assets among shareholders according to their interests, and perform any other necessary acts to wind up

Question 4

Involuntary dissolution

Answer 4

1. SCC may dissolve a c if finds that has (1) abused its authority, (2) C has failed to keep a registered agent, (3) has failed to file a required document, or (4) has violated federal employment law
2. A SH may pursue involuntary dissolution if
   (1) the SHs are deadlocked,
   (2) Ds are deadlocked and SHs cannot breach the deadlock, C’s business can no longer be conducted to the advantage of the SHs or irreparable injury to the corporation is suffered
   (3) acts of the D’s or those in control of the C are oppressive, illegal, or fraudulent; or
   (4) corporate assets are being wasted

Question 5

Involuntary dissolution by creditors

Answer 5

Creditors may seek dissolution when a claim has been reduced to a judgment, that judgment remains unsatisfied, and C is bankrupt

Question 6

Directors duties post dissolution

Answer 6

The board of a dissolved C must apply C’s assets to discharge creditor claims before making any distribution to shareholders.

Directors will not be personally liable if D complies with the proper procedures

Question 7

Known creditors post dissolution

Answer 7

A dissolved C can dispose itself of known creditors by
1) providing notice of dissolution
2) stating whether the claim is admitted or not admitted
3) provide mailing address where the claim may be sent
4) setting dealing to confirm the claim
5) stating that any claim not admitted will be barred if a confirmation is not received by the stated dealding

Question 8

Unknown creditors post dissolution

Answer 8

May bring an action against a SH of a dissolved C and is entitled to the lesser of the SH’s pro rata share or the amount received in liquidation