If you are a shareholder or director of a Delaware corporation, you may one day find it advantageous to dissolve your company. This post will generally discuss the dissolution and winding-up process of a Delaware corporation, and important considerations to be kept in mind when so doing, including the potential liability of shareholders and directors to creditors of the company, and the ability of a dissolved corporation to sue or be sued after its dissolution.
How Does the Dissolution Process Work in a Corporation That Is Not a Joint Venture?
To dissolve a corporation in the state of Delaware, a majority of the corporation’s directors must make a resolution that states the intent of the corporation to dissolve. This resolution must then gain approval by a majority vote from the shareholders. After the shareholders approve the decision, a certificate of dissolution must be filed with the Secretary of State.
Dissolution of a corporation may also be authorized without action of the directors if all the stockholders entitled to vote consent in writing. A certificate of dissolution is then required to be filed with the Secretary of State.
What Are the Requirements To Petition the Court To Dissolve a Joint Venture Corporation?
• The corporation only has two stockholders, each owning 50% of the corporation.
• The stockholders cannot agree on whether to continue to the joint venture.
• A stockholder petitions the Court stating that it desires to discontinue the joint venture and dispose of its assets in a plan to be agreed upon by both stockholders, or, if no plan can be agreed upon, then to dissolve the corporation.