Administrative Dissolution Without Liquidation
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FAQ
Dissolution is the end of the legal existence of a corporation. It usually occurs after liquidation, which is the process of paying debts and distributing assets.
The difference between the two are: Winding up involves ending all business affairs and includes the closure of the company (including liquidation or dissolution). Liquidation is specifically about selling off company assets in order to pay creditors and then closing the company.
Administrative dissolution is the taking away of the rights, powers, and authority of a domestic corporation, LLC, or other statutory business entity by the state administrator overseeing business entities, due to the entity's failure to comply with certain obligations of the business entity statute.
What are the differences between liquidation and dissolution? Dissolving a company through the process of dissolution often takes place when a company is solvent, but is no longer trading. Liquidation however, occurs due to a company having financial difficulties and therefore being unable to keep up with their debts.
In general, secured creditors have the highest priority followed by priority unsecured creditors. The remaining creditors are often paid prior to equity shareholders.
