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LegalCornerTM - Corporations F.A.Q.'s |
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Q.What is an involuntary corporate dissolution?
Anything you find in the Articles, Bylaws, Resolutions, or shareholder agreements MAY modify the general corporate law applicable to deadlocks and dissolution. If you do not find anything relevant, the following default rules should apply:
Due to the high cost of a formal court dissolution proceeding, most squabbling shareholders in a small corporation will agree to settle informally, often leaving the corporate shell to become delinquent on franchise taxes and in turn inactive. No lawyer would go out on a limb and recommend this because of potential liability for the former directors for the past due taxes, but the fact is it happens all the time. My advice is also attempt to settle the dispute and wind up and dissolve the corporation properly by filing the required documents and paying any outstanding franchise taxes. This will provide a clean break with the past with no potential outstanding liabilities. Corporation, dissolve a corporation, corporate dissolution, close a corporation, close down a corporation, deadlock. |
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