The act of dissolving or liquidating a corporation refers to the process by which a company or part of a company is brought to an end, and the assets and property of the company are redistributed. Dissolution technically refers to the last stages of liquidation. Going through this process is generally based on a decision to stop the active business activities of the corporation. Dissolutions can be voluntarily adopted by the shareholders and directors of a corporation. Dissolutions can also be voluntary or compulsory. When compulsatory (sometimes referred to as a creditor’s liquidation), the dissolution is caused by the revocation of the corporate Articles of Incorporation by the state for failure to file the proper reports, pay the proper taxes, or maintain a registered office and agent. Involuntary dissolution can also be caused by the Bankruptcy of the corporation. A voluntary dissolution is sometimes referred to as a shareholders’ liquidation. This process is sometimes used as a convenient method for converting an asset to cash.
Definition of Dissolution of Corporation form.
You can find an example of a Dissolution of Corporation Kit here.